The debate in Congress over extending a payroll-tax cut has prompted an unusual split among Republicans, putting the party on the defensive over its defining issue of taxes.

The divide broke to the surface during a contentious, closed-door meeting of House Republicans on Friday, when Speaker John Boehner (R., Ohio) met stiff resistance after he urged his party to unify behind his plan to extend the payroll-tax break and special unemployment benefits, according to lawmakers who were in the meeting. On Thursday, a majority of Senate Republicans broke from their leaders over the same issue

GOP leaders are wary of ending a popular tax break amid a weak economy, but many of the party’s rank-and-file doubt its effectiveness and are concerned about short-term tinkering with the tax code. The split marks a change from a year in which Republicans were generally united and held the upper hand on budget issues.

The debate centers on a temporary, two-percentage-point cut in the tax wage earners pay to fund Social Security. It was enacted as a part of an anti-recession package last year and expires Dec. 31. Leaders of both parties have proposed an extension, arguing it would be bad economic policy—and bad politics—to allow taxes to go up as the economy struggles.

Continue reading →