The Senate has passed a two-month payroll tax cut extension. The tax-cut package will be making its way to the House next week for a final call. If the tax cut is passed by the House, American families would continue to receive a 2% point cut from Social Security tax and the there would be no need for the purposed millionaire surtax. Read more after the jump.
Julie1205
The Senate on Saturday approved a two-month extension of the payroll tax cut, virtually ensuring another partisan fight early next year over President Obama’s favored tax break while teeing up a separate battle over a controversial pipeline.
The Senate voted 89-10 in support of the package, which will likely be taken up by the House next week.
Lawmakers decided on a two-month extension after they were unable to agree on how to pay for a package that would extend the tax cut through the next election. Democrats originally wanted to use a millionaire surtax to finance the measure but abandoned the call in the face of deepening gridlock on Capitol Hill. The $40 billion two-month package instead uses fee hikes on new mortgages backed by Fannie Mae and Freddie Mac.
Final passage would mean American families would continue to enjoy a 2 percentage point cut from their Social Security tax. In addition, weekly jobless payments averaging about $300 for millions of people who have been out of work for six months or more would be continued.
Democrats hope to use the pressure of an election year to fight for a broader package in two months.
But the bill also puts some election-year pressure on Obama. To the administration’s chagrin, Republicans were able to secure in the legislation a provision that compels Obama to make a decision on the fate of the Canada-to-Texas Keystone pipeline in 60 days. The administration had earlier delayed the project until after the election over environmental and safety concerns, though unions support it and the project could create thousands of jobs.
While administration officials have suggested the GOP pipeline provision could imperil the project, Republicans are hoping that Obama will ultimately clear the way for the pipeline to proceed.
“Here’s the single largest shovel-ready project in America,” Senate Republican Leader Mitch McConnell said on the floor Saturday. “It is literally ready to go with the permission of the president of the United States.”
The legislation is a partial victory at best for Obama, who’s being forced to accept Republican demands for the swift decision on the pipeline and a scaled-back version of his payroll tax cut plan.
The Senate is also supposed to vote Saturday on 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.
In a statement, White House communications director Dan Pfeiffer indicated Obama would sign the payroll tax cut 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.
FOX
