The standoff in Washington is over. Congress approved a bill to extend the payroll tax holiday and unemployment insurance Friday.

House Speaker John Boehner announced that a deal had been reached Thursday afternoon.

"It may not have been politically the smartest thing in the world. But let me tell you what. I think our members waged a good fight," Boehner said. "We were able able to come to a agreement. We were able to fix what came out of the Senate."

Senate Democrats agreed to immediately appoint members to a committee to resolve the differences that are standing in the way of a year-long extension. Republicans also pushed for language that would ease the processing burden for small businesses.

The tide turned earlier Thursday when Senate Republican Leader Mitch McConnell released a statement urging his House colleagues to pass the two-month extension. Shortly after the President, flanked by every-day Americans, joined McConnell in his call.

"Most importantly, it’s the right thing to do for American families all across the country," President Obama said. "This is not just my view…The Republican leader of the Senate said we should do it."

A compromise may have been reached, and crisis averted, but Democrats say this latest partisan stalemate shines a light on the effect Tea Party republicans are having in Washington. Still, members of the House GOP argue they were simply trying to deliver what the President asked for, a one-year extension, giving more stability to job creators and the economy.