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House passes payroll tax cut in victory for Obama

Andrew Taylor

Congress on Friday approved a two-month renewal of payroll tax cuts for 160 million American workers and unemployment benefits for millions, handing President Barack Obama a convincing victory for his jobs agenda. It was a humbling defeat for Republicans

Obama quickly signed the legislation, declaring it was "some good news just in the nick of time for the holidays." But he added that serious and difficult work lay ahead for Congress and the administration after the break for Christmas and New Year's.

Back-to-back voice vote approvals of the measure by the Senate and House capped a retreat by House Republicans who had insisted that a full-year bill was the only way to prevent an immediate tax increase on Jan. 1.

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.

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.

Thursday's decision by the Republican leader of the House, Speaker John Boehner, to cave in to the Senate came after days of criticism from Obama and Democrats. But perhaps more tellingly, Republican stalwarts including strategist Karl Rove and the Wall Street Journal editorial board warned that if the tax cuts were allowed to expire, Republicans would take a political beating that would harm efforts to unseat Obama next year.

House Republican arguments about the legislative process and what the "uncertainty" of a two-month extension would mean for businesses were unpersuasive, and Obama took the offensive.

Friday's House and Senate sessions were remarkable. Both chambers had essentially recessed for the holidays but leaders in both parties orchestrated passage of the short-term agreement under debate rules that would allow any individual member of Congress to derail the pact, at least for a time. None did.

Almost lost in the forgotten in the firestorm is that Republicans had extracted a major victory last week, winning a provision that would require Obama to make a swift decision on whether to approve construction of the Keystone XL oil pipeline, which would bring Canadian oil to the U.S. and create thousands of construction jobs. To block the pipeline, Obama would have to declare it is not in the nation's interest.

Obama wanted to put the decision off until after the 2012 election.

The Associated Press