Senate OKs budget bill, tax cut extension
Last Updated 11:35 a.m. ET
WASHINGTON - The U.S. Senate passed a $1 trillion-plus year-end budget bill for President Barack Obama's signature as part of a congressional endgame also featuring action on a two-month extension of a cut in the Social Security payroll tax and jobless benefits for the long-term unemployed.
The bipartisan measure passed 67-32, wrapping together the day-to-day budgets for 10 Cabinet departments and military operations in Iraq and Afghanistan. The House passed the bill Friday.
It provides details to a budget pact reached last summer, holding the Pentagon to the smallest increase in recent memory while imposing modest cuts on most domestic agencies.
The Senate also passed legislation Saturday that would extend a Social Security payroll tax cut and jobless benefits for just two months, setting the stage for the next fight until February.
While a partial victory for President Obama's year-end jobs agenda, the measure (which awaits House approval next week) contains a provision demanded by Republicans to pressure the White House into approving construction of a Canada-to-Texas oil pipeline that promises thousands of jobs.
Democratic and Republican leaders opted for the short-term extension after failing to agree on big enough spending cuts to pay for a full-year renewal of the payroll tax cut. The 2 percentage point tax cut affects 160 million taxpayers. The weekly jobless payments average about $300 for millions of people who have been out of work for six months or more.
The measure was approved by an 89-10 vote during a Saturday session.
Keystone pipeline still sticking point in tax talks
GOP attaches pipeline to payroll tax bill
In a statement, White House communications director Dan Pfeiffer indicated Obama would sign the two-month extension 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.
The legislation, would require the president to grant a permit for the pipeline, but allows Mr. Obama to decide not to do so if he determines that the pipeline is "not in the national interest." 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 President 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.
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."
President 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 put the price of the two-month package at between $30 billion and $40 billion said the cost would be covered by raising fees on new mortgages backed by Fannie Mae and Freddie Mac.
The fees, drawn from a Treasury Department housing finance market reform plan, would add several thousand dollars to the 30-year cost of home loans guaranteed by mortgage giants Fannie Mae Freddie and Freddie Mac and the Federal Housing Administration.
A worker making a $100,000 salary would reap a tax cut of about $330 through the short-term payroll tax extension.
A version of the fee that circulated overnight would effectively raise the interest rate on a mortgage by one-tenth of one percentage point, but the still-undetermined final version — awaiting analysis from the Congressional Budget Office — was expected to be lower.
The measure also provides a 60-day reprieve from a scheduled 27 percent cut in the fees paid to doctors who treat Medicare patients.
Officials said that in private talks, the two sides had hoped to reach agreement on the full one-year extension of the payroll tax cut and unemployment benefits that President 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 blunt the measure's impact on the debt.
The State Department, in an analysis released this summer, said the pipeline project would create up to 6,000 jobs during construction, while developer TransCanada put the total at 20,000 in direct employment.
The pipeline would carry oil from western Canada to Texas Gulf Coast refineries, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma.
The spending bill would lock in cuts that conservative Republicans won from the White House and Democrats earlier in the year.
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> Obama would sign the two-month extension measure, saying it had met his test
> of "preventing a tax increase on 160 million hardworking Americans" and
> avoiding damage to the economy recovery.
Interesting. But that's really jumping the gun a bit. Boehner and the House passed a 1 year extension. They haven't agreed to a 2 month extension yet. And they shouldn't. They should amend this Senate bill, or they should get conference committee to work out the differences.
As for the pipeline, there's nothing the Republicans would like more than for Obama to declare that pipeline "not in the national interest." Let's see him defend that in a Presidential debate. Let's see how much the unions will support his campaign when he declares their jobs "not in the national interest."
Sorry dan, but payroll taxes have taken care of SS/MC for decades and even provided a huge $3 Trillion surplus, which has been squandered by warmongers in Congress. The national security/defense expenditures come out of the "general fund" which has been supplemented by SS/MC and reduced by ignorant supply side idiocy!
you have cradle to grave benefits from the military that you get more out of then you put in.
luadda
Again you leave out the facts that oil will be sold to anyone at market prices, we will pay the same for a barrel of that oil as Europe, China, S. America. So where's the benefit long term?
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I didn't leave it out. I assumed that everyone knows that a "barrel of oil" is always sold at "market rates" (depending on grade). Doesn't matter where it comes from. What varies the price is the transportation costs to get that oil to the refinery. I never said that it would lower gas prices in the US. The benefit would be jobs in the US. We have refineries that are not running at full capacity. Remember, this oil "ain't stay'n" in the ground, Canada will ship it somewhere to be refined. Why not us? I thought all libs wanted more manufacturing jobs in the US, well here it is. Or are we going to let Canada ship those jobs overseas too?
Refineries and upgraders are huge, expensive projects requiring long-term maintenance. Since processing capacity already exists in the United States, it's more profitable for companies to ship the oil south.
More specifically, the price difference between the raw bitumen taken out of the oilsands and refined oil - called the crack spread - isn't large enough to encourage oil companies to build additional upgraders in Alberta.
The Gulf Coast is by far the leader in refinery capacity, with more than twice the crude oil distillation capacity as any other United States region. (The difference is even greater for downstream processing capacity, because the Gulf Coast has the highest concentration of sophisticated facilities in the world.)
Churches are BIG businesses, second only to the military complex, and then followed by the prison systems, and should therefore be treated as a business.....after all, they are selling a "promise".
"Just think how much money we could save by cutting the size of the federal government in half!"
Just think how much REAL MONEY we could save by cutting back on the national security/defense budget of over $1 Trillion -- and go back to the Clinton years of less than $300 billion for defense!
Might have to cut YOUR government check and make YOU pay for your health care instead of giving you entitlements and socialized medicine, though, dan!
Your choice of words and their connotations belie your motives (i.e. lockstep). Indeed the financial sector has Europe by the shorthairs with ability to raise interests and force political triggers for any entity that currently holds any significant debt balance.
Certainly, there is a second shoe to fall, but not in the way you suggest. A return to supply-side expansion cannot create growth where there is none to be had, so good luck with your winds of political change.
We need to start divercing some of these grab bags and have some real discussion of merit.
For instance, a payroll tax "holiday" seems great to the immediate short term; but further unfinds SS and medicare. Is this truly wahtwe need is to make the programs more insolvent. Personally, i think it's a pretty bad idea, unless you are trying tomake the system require extreme redefinition and/or eliminate it.
Second, the oil pipeline profits and jobs CANNOT be claimed as part of this or any other bill, for the simple reason that it is going in regardless. The only reviewal issue is routing of the pipeline and WHEN it is going in. I swear it is a done deal, whether it start in 2012 or 2013. After all it is in fact supported by both parties (and they have been so heavily lobbied).
Extending unemployment benefits for 2 months is meaningless. In fact all of this kick the can less than a quarter down the road philosophy is what is killing the effectiveness and the perceived effectness of the Fed Govt. Every two months there is another repeat discussion, followed by threatening,posturing and the wringing of hands, then another short-sighted agreement, followed by a bad bill applauded as "the best we could do".
One thing that Govt is supposed to be able to do is plan and look longer term than private industry, as true infrastructure maintenance absolutely depends on it.
This cannot go on, where budget bandaids are the only substantive discussion every few months.
Try again.
luadda
Funny Canada has four refineries right there in Alberta that can refine the tar sand oil. Why do they have to pipe it to the Gulf Coast, unless it's for exporting that oil to S America and Europe.
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DING! DING! DING!
YOU WIN retm-w.
That's EXACTLY where that oil is going...EXPORT.
Any of that money going into your pocket??
NO!
Then why a Repub pushed fast track ledgislation?
Stop struggling and let the Repubs hold you down over the kitchen table,with pants at your ankles...so the oil companies can give you an answer.