The House Republicans have decided that there’s no point in trying to extend the payroll tax cut with strings attached, so they’ve basically thrown in the towel on it.
As Brian Beutler explains at TPM, the GOP realized that their policy of trying to kill government spending by cutting off funding was both not working and not popular with the electorate. Having the fight over extending a tax cut with the Republicans on the side of raising taxes in an election year (and the deadline racing toward them like a freight train) was a recipe for disaster. Strangely enough, prudence won out over ideology.
And the Democrats — finally — seemed to get the point that the bully will blink.
PS: Ezra Klein thinks it might be a trap.