Republicans bow to Obama on payroll tax extension House Republican leaders have dropped their opposition to extending a federal payroll tax holiday, averting a fight with US President Barack Obama on an issue that threatened to hurt them with voters. House Speaker John Boehner and his top lieutenants announced Monday that they would not longer insist that the $100 billion cost of the extension be offset with spending cuts elsewhere. In a statement, Boehner said House Republicans "will introduce a backup plan that would simply extend the payroll tax holiday for the remainder of the year while the conference negotiations continue" on other issues. Negotiators seeking to reconcile opposing House and Senate versions of the measure have been deadlocked over how to pay for the tax holiday, increasing the chances it would expire Feb 29. The payroll taxes affect salaried workers, so reducing the amounts withheld from paychecks was a key element of the Obama administration's efforts to boost the US economic recovery. A two-month reduction in the payroll tax, to 4.2 percent from 6.2 percent, was agreed in December as part of a tax compromise but only after a bitter fight and a rebellion against it by some House Republicans. Boehner finally passed the bill while House lawmakers were out of town for Christmas, calling it the "right fight at the wrong time." In the wake of the fight, polls have shown public support for Congress falling to all-time lows. A possible hitch in Boehner's latest concession is that it would separate the payroll tax extension from other issues that are included in the current package.