WASHINGTON (AP) – President Barack Obama has signed legislation extending a payroll tax cut for two months. The action concludes an end-of-year drama that split Republicans and threatened a tax hike on 160 million Americans.
Obama acted Friday after the House and Senate approved the tax cut extension, which will maintain a pension tax at 4.2 percent. The legislation also extends unemployment insurance for jobless workers and forces Obama to make a decision within 60 days on whether to permit construction of a Canada to Texas oil pipeline opposed by environmental groups.
By signing the bill, Obama capped nearly a week-long standoff with House Republicans who demanded a full-year extension. Under a deal reached Thursday, House and Senate leaders named negotiators to begin working on a longer-term bill.
The developments were a clear win for Obama. The payroll tax cut was the centerpiece of his three-month, campaign-style drive for jobs legislation that seems to have contributed to an uptick in his poll numbers - and taken a toll on those of congressional Republicans.
''I am pleased to say we got this done,'' Obama told reporters at the White House. The president urged Congress to return to work next month ''without drama, without delay,'' and pushed lawmakers to approve a further, one-year extension of the cuts.
Congress passed a two-month payroll tax-cut extension earlier Friday, after House Republicans caved the previous day under mounting political pressure to pass a near-term extension. House Republicans had previously refused to pass the two-month solution favored by Senate Democrates, instead pushing for the one-year extension.
The plan would extend a 2-percentage-point payroll tax cut for two months. Lawmakers plan to negotiate a longer-term extension in the new year.
House Republicans were under fire from their constituents and Republican establishment figures incensed that they would risk losing the tax cut issue to Democrats at the dawn of the 2012 presidential and congressional election year in which Obama is seeking a second term. The measure passed despite lingering grumbling from conservative tea party Republicans. It buys time for negotiations early next year on how to finance a year-long extension of the 2 percentage point payroll tax cut.
It will keep in place a salary boost of about $20 a week for an average worker making $50,000 a year and prevent almost 2 million unemployed people from losing jobless benefits averaging $300 a week.
Passage in the House of the measure took less than a minute. Republican efforts to force a holiday season confrontation with Obama and Senate Democrats had threatened millions of workers. But it backfired badly.
Preventing the tax hike and extending jobless benefits had been embraced by virtually every lawmaker in the House and Senate but had been derailed in a quarrel over demands by House Republicans for immediate negotiations on a long-term extension bill. Senate leaders of both parties had tried to barter such an agreement among themselves a week ago but failed, instead agreeing upon a 60-day measure to buy time for talks next year.
Obama will travel Friday to Hawaii for a delayed Christmas vacation. The White House announced the president's departure plans shortly after the House and the Senate signed off on a deal to extend payroll tax cuts after House Republicans reversed course and dropped their opposition.
source: mb.com.ph
