Senators racing for the exits after a year of bitter battles passed legislation yesterday that would extend a Social Security payroll tax cut and jobless benefits for just two months, setting the stage for the next fight until February.
While a partial victory for President Barack Obama's year-end jobs agenda, the measure awaiting House approval this week contains a provision demanded by Republicans to pressure the White House into approving construction of a Canada-to-Texas oil pipeline that promises thousands of jobs.
Democratic and GOP leaders opted for the short-term extension after failing to agree on big enough spending cuts to pay for a full-year renewal of the payroll tax cut. The 2 percentage point tax cut affects 160 million taxpayers. The weekly jobless payments average about $300 (Dh1,103) for millions of people who have been out of work for six months or more.
The measure was approved by an 89-10 vote during yesterday's session.
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In a statement, White House communications director Dan Pfeiffer indicated Obama would sign the two-month extension 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.
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 said on December 7 that "any effort to try to tie Keystone to the payroll tax cut I will reject. So everybody should be on notice."
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 allies.
Price of package
Republican senators put the price 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 Fannie Mae and Freddie Mac.
The fees, drawn from a Treasury Department housing finance market reform plan, would add several thousand dollars to the 30-year cost of home loans.