After a lot of finger pointing from both parties, Republican leaders in the House have agreed to approve a two-month extension of a payroll tax cut, in exchange for a committment from Democrats in the Senate to work out a longer term deal.

Here is the statement issued by Speaker John Boehner:

"Senator Reid and I have reached an agreement that will ensure taxes do not increase for working families on January 1 while ensuring that a complex new reporting burden is not unintentionally imposed on small business job creators.  Under the terms of our agreement, a new bill will be approved by the House that reflects the bipartisan agreement in the Senate along with new language that allows job creators to process and withhold payroll taxation under the same accounting structure that is currently in place.  The Senate will join the House in immediately appointing conferees, with instructions to reach agreement in the weeks ahead on a full-year payroll tax extension.  We will ask the House and Senate to approve this agreement by unanimous consent before Christmas.  I thank our Members – particularly those who have remained here in the Capitol with the holidays approaching – for their efforts to enact a full-year extension of the payroll tax cut for working families."

Here is the statement from Senate Majority Leader Harry Reid:

“I am grateful that the voices of reason have prevailed and Speaker Boehner has agreed to pass the Senate’s bipartisan compromise. Year-long extensions of the payroll tax cut, unemployment insurance and Medicare payments for physicians has always been our goal, and Democrats will not rest until we have passed them. But there remain important differences between the parties on how to implement these policies, and it is critical that we protect middle-class families from a tax increase while we work them out. “I look forward to appointing members of my caucus to continue negotiations towards a year-long agreement. Two months is not a long time, and I expect the negotiators to work expeditiously to forge year-long extensions of these critical policies.”