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"Groundhog Day II": New payroll tax fight ahead

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The White House ended the year with a big political victory when House Republicans caved in and agreed to pass a two-month extension of the payroll tax cut and jobless benefits.

But how long will the political aftershocks be felt by congressional Republicans and the GOP presidential candidates?

Major Garret, congressional correspondent for the National Journal, told "Early Show on Saturday Morning" co-anchor Russ Mitchell what this comes down to is that, "House Republicans have to figure out a way to legislate. They wrote a good bill, a year-long extension of the payroll tax cut and they paid for it, with off-setting spending cuts. They liked that bill and wanted to fight for it. But what they failed to realize is the president was never going to sign it. Senate Democrats and Senate Republicans didn't think much of it, either. You can write a bill and be proud of it, but you have to understand and formulate a strategy for the next step. They never did.

"They're going to have to learn these lessons, learn them rapidly, because this debate's going to come back in just two months."

"It's Christmas Eve," Garrett continued, "but we're going to be experiencing 'Groundhog Day' on this entire payroll tax issue. The White House is going to fight again for a millionaire's surtax, just as it did before, to finance this payroll tax cut extension. Republicans are going to oppose that and offer up spending cuts.

"I had a long talk yesterday with (Rep.) Chris Van Hollen, Democrat from Maryland, who's going to be on the committee where this is all going to be sorted out. Democrats are already drawing a lot of very hard bargaining positions against many of the suggested House Republican spending cuts. And here's big divide - not just among House Republicans, but Senate Republicans, because they think, if they do the politics right there year, they could win the majority of the United States Senate. That's why so many Senate Republicans broke from the House Republicans [this week, on the payroll tax issue]. So, unless House Republicans and Senate Republicans work that out and understand how to coordinate their politics, they're going to remain divided on this issue."

President Obama, Garrett pointed out, is hoping the political points he scored by winning a popular tax break for 160 million workers will re-energize a base that needs to be re-energized. "The energy simply hasn't been there in this calendar year," Garrett observed.

As for the GOP presidential hopefuls, Newt Gingrich says he's upset by the attack ads some rivals have aired in Iowa - and his feelings are even hurt. Does Garret think those statements will resonate with Iowa voters?

"They resonate for the people who are attacking Newt Gingrich," Garret says, because they know [the attack ad strategy is] working. It may resonate with Iowa voters who tend not to like and tend not to reward, quote/unquote, negative politics, but the reality is Newt Gingrich rose very quickly in Iowa and is now falling very quickly, and he doesn't have the organization to back himself up. So, when he says his feelings are hurt, what he really means is his poll numbers are hurt.

"And if Mitt Romney wins Iowa, he'll very, very much strengthen his approach for [getting] the Republican nomination. If Ron Paul wins, and I wouldn't rule that out, then he goes to New Hampshire. And if Romney wins there, then he re-strengthens and re-solidifies what has always been true - that he is the frontrunner, at least nominally, until somebody knocks him off."