The fact is that Obama initially proposed cutting the 6.2% payroll tax on BOTH employees and employers to 3.1% for a minimum of 1 year. The Republicans balked and have refused to consider cutting the employer tax while only supporting a continuation of the 4.2% tax on employees. Why? Because it might improve the economy and hurt their chances in 2012.
The 2 month extension was agreed to by both GOP and Democrats in the Senate because they couldn't reach agreement on a 1 year plan.