In a surprising change of heart, House Republicans agreed yesterday to extend the $100 billion payroll tax cuts through the end of 2012 without spending cuts to offset the cost. However, the concession may signal a shift in strategy, rather than a cave, on the issue. A December Gallup poll showed that those surveyed trusted Democrats more than Republicans on the payroll tax issue by 41 percent to 34 percent. Republicans can't afford to lose any more traction on this issue during an election year, and their smartest move was to move on.
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Social Security, Medicare, Medicaid, and defense took up 68 percent of the federal budget in 2011, and the number is sure to climb for this year's budget as non-discretionary spending jumps up. As Ezra Klein puts it, "yep, the federal government is still an insurer with a large army."