Senate reaches tentative payroll tax deal
Updated at 9:20 p.m. ET
WASHINGTON - Senate leaders agreed on compromise legislation Friday night to extend Social Security payroll tax cuts and jobless benefits for two months while requiring President Obama to accept Republican demands for a swift decision on the fate of an oil pipeline that promises thousands of jobs.
Senate negotiators agreed to the two-month extension after failing to reach an agreement on extending the tax cut for another year, CBS News Capitol Hill producer John Nolen reports.
A vote is expected Saturday on the measure, the last in a highly contentious year of divided government.
House passage is also required before the measure can reach Mr. Obama's desk.
In a statement, White House communications director Dan Pfeiffer indicated Mr. Obama would sign the 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.
Pipeline still a sticking point in payroll talks
Racing to adjourn for the year, lawmakers moved quickly to clear separate spending legislation avoiding a partial government shutdown threatened for midnight.
House passes $1T budget bill, avoids shutdown
The developments came a few hours after the White House publicly backed away from Mr. 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.
Mr. 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 political allies.
Republican senators leaving a closed-door meeting put the price tag of the two-month package at between $30 billion and $40 billion said the cost would be covered through a fee on mortgages backed by Fannie Mae and Freddie Mac.
The legislation would also provide a 60-day reprieve from a scheduled 27 percent cut in the fees paid to doctors who treat Medicare patients.
Several officials said it would require a decision within 60 days on the pipeline, with the president required to authorize construction unless he determined that would not be in the national interest.
Senators in both parties hastened to claim credit for the deal.
Sen. Richard Lugar issued a statement that said the compromise included legislation he authored "that forces President Obama to make a decision" on the pipeline. The Indiana Republican faces a strong primary challenge next year from a tea party-backed rival.
Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said he had "brokered a final deal by bringing lawmakers from both parties together to support jobs."
Not all Democrats were as upbeat. "Look, this was tough. Harry (Reid) had to negotiate with Boehner and with McConnell," said Sen. Dianne Feinstein, D-Calif., referring to House Speaker John Boehner and Senate Republican Leader Mitch McConnell, the two Republican leaders in Congress.
Officials said that in private talks, the two sides had hoped to reach agreement on the full one-year extension of payroll tax cuts and jobless benefits that Mr. Obama had made the centerpiece of the jobs program he submitted to Congress last fall.
Those efforts failed when the two sides could not agree on enough offsetting cuts to make sure the deficit wouldn't rise.
Reid, in a statement, blamed Republicans, saying they had wanted to "cut Medicare benefits for seniors" and Democrats refused. GOP officials disputed him.
"We'll be back discussing the same issues in a couple of months, but from our point of view, we think the keystone pipeline is a very important job-creating measure in the private sector that doesn't cost the government a penny," said Sen. Mitch McConnell of Kentucky, the Republican leader.
There was no immediate reaction from House Speaker John Boehner. Neither he nor his aides participated in the negotiations, although McConnell said he was optimistic about the measure's chances for final approval.
Hours earlier, McConnell challenged Mr. Obama to give ground.
"Let's not just pass a bill that helps people on the benefits side, let's also include something that actually helps the private sector create the jobs Americans need for the long term," he said.
In a political jab, he added, "Here's an opportunity for the president to say he's not going to let a few radical environmentalists stand in the way of a project that would create thousands of jobs and make America more secure at the same time."
Mr. Obama said on Dec. 7 that "any effort to try to tie Keystone to the payroll tax cut I will reject. So everybody should be on notice."
More recently, a veto threat issued Tuesday against the House-passed version of the bill cited the introduction of "ideological issues into what should be a simple debate about cutting taxes for the middle class." Senior administration officials later told reporters that was a reference to the pipeline.
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Oh...."real tax cuts" like the bush tax cuts that defund all federal revenue? The architect of "supply-side economics" says you're nuts!
Supply-Side Economics, R.I.P.
"supply-side economics (SSE) should declare victory and then go out of existence."
"During the George W. Bush years, however, I think SSE became distorted into something that is, frankly, nuts -- the ideas that there is no economic problem that cannot be cured with more and bigger tax cuts, that all tax cuts are equally beneficial, and that all tax cuts raise revenue."
"These incorrect ideas led to the enactment of many tax cuts that had no meaningful effect on economic performance. Many were just give-aways to favored Republican constituencies, little different, substantively, from government spending. What, after all, is the difference between a direct spending program and a refundable tax credit?"
"The supply-siders are to a large extent responsible for this mess, myself included. We opened Pandora's Box when we got the Republican Party to abandon the balanced budget as its signature economic policy and adopt tax cuts as its raison d'etre. In particular, the idea that tax cuts will 'starve the beast' and automatically shrink the size of government is extremely pernicious."
"Indeed, by destroying the balanced budget constraint, starve-the-beast theory actually opened the flood gates of spending. As I explained in a recent column, a key reason why deficits restrained spending in the past is because they led to politically unpopular tax increases. But if, as Republicans now maintain, taxes must never be increased at any time for any reason then there is never any political cost to raising spending and cutting taxes at the same time, as the Bush 43 administration and a Republican Congress did year after year."
http://capitalgainsandgames.com/blog/bruce-bartlett/1168/supply-side-economics-rip
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Go ahead rob, and argue against the architect of "supply side economics," and his lucid and candid expose showing why the bush tax cuts were so wrong 10 years ago, and why they should have ended a long time ago, or better yet, never been passed by the GOP Congress!
Must you parrot all the ridiculous fox/rush propaganda?
Ron Paul is a libertarian, hardly a liberal, and is definitely the most honest of all the GOP 2012 candidates, so apparently you don't like the truth, and live for the lies and deceptions of the fox political network!
Fox News Viewers Know Less Than People Who Don't Watch Any News
http://publicmind.fdu.edu/2011/knowless/
we are being played like suckers
1.) be temporary
2.) Many of these jobs will be given to Canadians, because this is the Trans Canada Pipeline and company based in Canada
3.) and the number of jobs is relatively small and will do very little to pay back $15 trillion in debts
Now if far right wing extremists are iwlling to add a Oil transfer tax to this pipeline that wil be used ot pay down our nations debt as well as Pay back all those Social Security IOU's then we have a place to begin rela negotiations.
But if this Pipeline goes through as it is being discussed right now the only real long term benefactors will be the Oil companies. With very very little long term benefit to America or Americans.
All that oil goes to the market and gets sold at market prices. It will do so very little to reduce the cost of oil or gas for us.
You fox/rush parrots are entirely too funny and highly hypocritical, doing nothing but despicably attacking ALL UNIONS for years, and now in order to support BIG OIL's need for higher profits, are singing the praises of union workers that would possibly be building this pipeline!
What a bunch of delusional hypocrites!
NO, the fox political network must politicize and propagandize any news before they allow their pundits to report it!
Fox Wildly Inflates The Number Of Jobs Keystone XL Pipeline Might Create
Fox News has claimed that TransCanada's proposed Keystone XL pipeline would create somewhere between 50,000 and a million jobs. In fact, even TransCanada acknowledges that the total jobs created would be far fewer, and an independent report has found that the project could actually destroy more jobs than it creates through higher fuel costs and environmental damage.
NO, it's an EXPORT pipeline!
Why are you fox/rush parrots so misinformed about how many temporary jobs the Keystone EXPORT pipeline will create, and especially so misinformed about Valero refining the low-quality tar sands oil into diesel for tax-free EXPORT for higher profits?
You say privately funded.... yet we are subsidizing and giving tax credits to these companies.
It's certainly not free to taxpayers, no matter what Rush told you.
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
You mean kind of like subsidizing someone that can afford a $40k + Volt (GE comes to mind) with a $7500 tax credit? That's not free to tax payers either. Have you bought yours yet?
WE WILL HAVE SOME CONTROL OF IT.