Payroll tax cut extended, but battle resumes after break
The House and Senate approved Friday a two-month extension of the payroll-tax cut, setting up a sequel to the three-month-long battle over one of President Obama's top legislative priorities.
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“And when Congress returns, I urge them to keep working to reach an agreement that will extend this tax cut and unemployment insurance for all of 2012 without drama or delay,” he added.Skip to next paragraph
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In addition to extending expiring provisions, the Senate bill also picks up a key demand of House Republicans to force President Obama to make an early decision on the Keystone XL pipeline, which would stretch from Canada’s oil fields to Texas refineries. The president had opted to put off a decision on the pipeline until after 2012 elections.
In a bid to draw GOP support, the measure also requires the White House to announce a decision on whether to issue a permit for the pipeline no later than 60 days after the bill is signed, unless the president determines that the pipeline does not “serve the national interest” and defend that decision to the Congress in writing.
The pipeline gave Republicans at least one talking point in the wake of a struggle that forced House Republicans to concede on nearly all issues, with the exception of a provision to ease reporting requirements on small businesses.
"With today’s agreement between the speaker and leader Reid, working Americans can breathe a sigh of relief knowing that their taxes will not go up at the end of the year and that the president will have to finally decide on whether to move forward on a pipeline project,” said Senator McConnell, in a statement.
But in a signal of partisan fights to come, he added: “The president’s statements castigating House Republicans have thus amounted to the kind of unhelpful political opportunism Americans are tired of. The president seems to forget that the only reason we are even discussing an extension of temporary measures like the payroll tax cut and unemployment insurance is his own failure to turn our nation’s economy around nearly three years into his administration.”
The next issue will be how to pay for a one-year extension. Democrats have pushed for a surtax on incomes over $1 million, while Republicans oppose increases in tax rates. With a 60 vote threshold in the Senate for any major legislation, Republicans can block a one-year extension of expiring provisions, unless Democrats back down.