Senate To Vote On Payroll Tax Compromise

WASHINGTON — Capping a rare day of congressional bipartisanship, Senate leaders agreed on a deal Friday night to extend Social Security payroll tax cuts and jobless benefits for two months.


The agreement, which was hailed by the White House, also forces President Obama to decide within 60 days whether to greenlight a Republican-backed plan for an oil pipeline stretching from Canada to the U.S. Gulf Coast.


"Let's not just pass a bill that helps people on the benefits side, let's also include something that actually helps the private sector create the jobs Americans need for the long term," Senate Republican leader Mitch McConnell of Kentucky said.


The deal was reached hours after the White House publicly pulled back on a threat to veto any bill that lumped together the payroll tax cut extension with a Republican demand for a quick decision on whether to build the 1,700-mile Keystone XL pipeline.


“The President said that Congress cannot go home without preventing a tax increase on 160 million hard-working Americans, and the deal announced tonight meets that test,” White House Communications Director Dan Pfeiffer said.


The Senate is expected to vote on the measure Saturday. It also must pass in the House, where it is likely to face resistance from some Republicans who are opposed to a short-term extension, the New York Times reported.


The pipeline issue puts Obama in the uncomfortable position of having to choose between environmentalists, who are opposed to the proposal, and unions, which largely support it because it will create thousands of jobs.


Republican senators said the two-month package would cost between $30 billion and $40 billion - a pricetag that would be paid for by raising fees on new mortgages backed by Fannie Mae and Freddie Mac.


The legislation is a partial victory at best for President Obama, who's being forced to accept Republican demands for a swift decision on the fate of a Canada-to-Texas oil pipeline that promises thousands of jobs.


Votes were slated for Saturday morning on the measure, along with a final tally to send a $1 trillion-plus catchall spending measure setting the day-to-day budgets of 10 Cabinet agencies. The House of Representatives cleared the spending bill Friday and will return early next week to vote on the payroll tax measure.


In a statement, White House communications director Dan Pfeiffer indicated Obama would sign the measure, saying it had met his test of "preventing a tax increase on 160 million hardworking Americans" and avoiding damage to the economy recovery.


The statement made no mention of the pipeline. One senior administration official said the president would almost certainly refuse to grant a permit. The official was not authorized to speak publicly.


The developments came a few hours after the White House publicly backed away from Obama's threat to veto any bill that linked the payroll tax cut extension with a Republican demand for a speedy decision on the 1,700-mile Keystone XL oil pipeline proposed from Canada to Texas Gulf Coast refineries.


Obama recently announced he was postponing a decision until after the 2012 elections on the much-studied proposal. Environmentalists oppose the project, but several unions support it, and the legislation puts the president in the uncomfortable position of having to choose between customary political allies.


Republican senators leaving a closed-door meeting put the price tag of the two-month package at between $30 billion and $40 billion said the cost would be covered by raising fees on new mortgages backed by public-private mortgage giants Fannie Mae and Freddie Mac.