Karl Rove piles on, tells Republicans to cut bait in tax standoff

You know it's bad for Republicans when Karl Rove says it's time to cave and move on.

The former political adviser to President George W. Bush said Wednesday that the famously conservative Wall Street Journal editorial page was right when it said House Republicans should cut their losses and agree with a bipartisan Senate plan to extend for just two months the payroll tax cut enacted last year.

Republicans "have lost the optics on it," Rove told Fox News, "the question now is how do the Republicans get out of it."

Speaker John Boehner and House Republicans on Tuesday blocked a Senate proposal to extend the popular tax cut for two months in an effort to allow lawmaker from both parties more time to hash out a larger compromise on a host of issues that were holding up the payroll tax extension.

Boehner had reportedly backed the plan at first, but many of the most conservative members of parties revolted on Saturday and said they would not accept the Senate plan, vowing to kill it when it came to the House of Representatives.

But that may have been easier said than done. So Boehner came up with a plan to block the Senate bill without actually voting on the extension. Using a procedural move, the House voted to "disagree" with the Senate plan and set up a committee of members from both parties from both the House and Senate to work out a new compromise on legislation.

But most senators had already left Washington for the holidays and the Senate proposal was itself a compromise between Democrats and Republicans, who overwhelmingly supported the short-term legislative option to avoid the most contentious issues and pass the popular tax cut for two months. The Senate bill, which also includes an extension of unemployment benefits and a measure to make sure doctors do not have their Medicare payments cut, passed 89-10. All but seven Republicans voted for it.

The mastermind of Mr. Bush's 2004 re-election effort said the only thing Republicans can do now is "use it for political theater and then vote the two month extension and get out of town."

"The only way to win it is to just stick there and ruin their own Christmases and wait until the president heads off to Hawaii for his, and then lambaste the Democrats for having abdicated their responsibilities to pass a year-long tax cut," Rove said.

The payroll tax affects about 160 million Americans and it was cut a year ago in an effort to stimulate the economy with a little extra cash in people's pockets. Many conservative Republicans are skeptical of the macroeconomic benefits of the payroll tax cut.

Mark Zandi, an influential economist who served as an adviser to the 2008 presidential campaign of Sen. John McCain, has said the economy could fall back into recession if the payroll tax cut is not extended.