US Senate passes $1t budget bill, payroll tax cut

However, the relief comes only for two months, setting up a February showdown in the heat of an election campaign.The measure, part of a year-end congressional endgame in which the Senate also approved a $1.0 trillion spending bill to avert a shutdown and fund the government through fiscal year 2012, saw President Barack Obamas authority further dented by forcing him to look again at a contentious pipeline plan.A deal on the measure, which passed easily 89 votes to 10 in the upper chamber of Congress, but its short duration highlighted the inability of feuding lawmakers to bridge the divide on a more comprehensive deal and simply set battle-lines of a new fight over the same issues in the hothouse atmosphere of election year 2012.The House of Representatives could take up the bill on Monday, at the end of a frenetic period of maneuvering between the White House and its Republican foes.Though Obama will achieve his goal of ensuring that US workers do not get a tax hike on January 1, the extension of a payroll tax cut and unemployment benefits will last only two months, not the year he had originally pushed for.In order to achieve something around here, you have to compromise, Senate minority leader Mitch McConnell said minutes before Saturdays vote.The Senate deal also thrusts the contentious Keystone XL pipeline, to carry oil from Canadas tar sands to the US Gulf Coast, back onto the political agenda.Obama had put off a decision on the project, which pits environmentalists against labor unions and business interests in his political base, until after his bid for a second term, drawing Republican howls.Instead the bill would give him just 60 days to review the project, and McConnell said he hopes the president will do the right thing for the country and get this crucial project underway.The fact the White House apparently reluctantly agreed to legislative language requiring Obama to ostensibly reconsider it within two months will enrage environmentalists who lean Democratic and campaigned against the project.Republican Senator Kay Bailey Hutchison acknowledged after the vote that there were stark differences between the parties over how to pay for the tax cut extension, with some lawmakers on both sides of the aisle furious that the payroll tax cut slashes inputs to the already-creaky Social Security system.We dont think that we should defund Social Security, Republican Senator Mark Kirk said alongside his Democratic colleague Joe Manchin.Sniping continued on Saturday, with Representative Debbie Wasserman Schultz saying her fellow Democrats in the House would back the payroll tax cut bill but that the pipeline amendment was a mistake by her rivals.The Republicans have probably killed the Keystone pipeline by forcing the Obama administration into a review of two months rather than one year, she said.The White House put a brave face on the deals outcome, saying Obama had succeeded in forcing Republicans to extend the payroll tax cut in a move designed to stimulate the struggling US economy.Democratic Senate Majority leader Harry Reid said he thought Americans should know that we fought hard to make sure that they get their checks, and their deductions come January 1.But Republicans crowed that they had forced Obama to take up the pipeline project, which they say will create 20,000 jobs, even after he said he would reject any attempt to link it to the payroll tax holiday bill.The agreement requires the State Department to issue a permit for the Keystone project within 60 days unless Obama certifies that it is not in the US national interest.Such a finding would expose Obama to politically explosive Republican charges in an election year that he rejected the creation of 20,000 jobs, at a time of high unemployment.Seeking to stimulate the sluggish recovery, Obama had asked Congress to extend a payroll tax holiday for a year to give workers a $1,500 tax cut next year.Obamas Democratic allies had initially hoped to fund the project by imposing a tax on the countrys wealthiest Americans who earn more than $1 million a year.But they met stiff opposition from Republicans, who control the House, and had to abandon the plan. --AFP