Senate approves two-month extension of payroll tax holiday

Senate approves two-month extension of payroll tax holiday

The Senate on Saturday morning approved a two-month extension of the payroll tax holiday, the centerpiece of President Obama’s jobs agenda, setting up Congress to revisit the contentious issue next year.

The legislation would also extend unemployment benefits and freeze scheduled cuts to doctors’ Medicare reimbursements until March. It was approved by a vote of 89-10.

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Sens. Bob CorkerRobert (Bob) Phillips CorkerTrump to hold Nashville rally amid efforts to boost GOP Senate hopeful Kim Jong Un surprises with savvy power plays Tax reform postmortem reveals lethal dose of crony capitalism MORE (R-Tenn.), Jim DeMint (R-S.C.), Ron JohnsonRonald (Ron) Harold JohnsonContinued efforts to pass 'right to try' legislation should fail GOP, Dem lawmakers come together for McCain documentary House to vote to send 'right to try' bill to Trump’s desk next week MORE (R-Wis.), Mark KirkMark Steven KirkThis week: Trump heads to Capitol Hill Trump attending Senate GOP lunch Tuesday High stakes as Trump heads to Hill MORE (R-Ill.), Pat Leahy (D-Vt.), Joe ManchinJoseph (Joe) ManchinTrump to hold Nashville rally amid efforts to boost GOP Senate hopeful Voters Dems need aren't impressed by anti-waterboarding showboating Overnight Finance: House rejects farm bill in conservative revolt | NAFTA deal remains elusive as talks drag on | Dodd-Frank rollback set for House vote MORE (D-W.Va.), Jerry MoranGerald (Jerry) MoranGOP senator’s defense of Tester counters Trump attacks GOP more confident about W. Va. Senate as Blankenship fades Senators hope Trump's next VA pick will be less controversial MORE (R-Kan.), Bernie SandersBernard (Bernie) SandersHarvard law professor: Impeachment could worsen political dysfunction, polarization Gun control debate shifts to hardening schools after Texas shooting Bernie Sanders: NRA to blame for lack of action on gun control MORE (I-Vt.), Jeff SessionsJefferson (Jeff) Beauregard SessionsStopping Robert Mueller to protect us all Chris Christie compares Mueller investigation to 'Bridgegate' probe Oakland mayor fires back at Trump: ‘It’s my duty to protect my residents’ MORE (R-Ala.) and Richard Shelby (R-Ala.) voted against the package.

Sen. Rand PaulRandal (Rand) Howard PaulKentucky Dems look to vault themselves in deep-red district Overnight Defense: Senate confirms Haspel as CIA chief | Trump offers Kim 'protections' if he gives up nukes | Dem amendments target Trump military parade Hillicon Valley: Lawmakers target Chinese tech giants | Dems move to save top cyber post | Trump gets a new CIA chief | Ryan delays election security briefing | Twitter CEO meets lawmakers MORE (R-Ky.) did not vote. 

The bill now awaits approval next week by the House of Representatives. Senate aides expect House Speaker John BoehnerJohn Andrew BoehnerGOP revolts multiply against retiring Ryan Can Jim Jordan become top House Republican? Tensions on immigration erupt in the House GOP MORE (R-Ohio) to agree to the proposal but he will not do so formally until he has had a chance to consult with members of the House GOP caucus.

Senate Republican Leader Mitch McConnellAddison (Mitch) Mitchell McConnellTrump's plan to claw back spending hits wall in Congress GOP lawmakers want Trump to stop bashing Congress Parkland father calls out Trump, McConnell, Ryan after Santa Fe shooting MORE (R-Ky.) won an important concession by pressing Democrats to include in the bill House-passed language to expedite construction of the Keystone XL oil sands pipeline.

The bill does not extend an array of expiring business tax provisions, which Senate leaders were negotiating as part of a possible deal to extend the payroll tax holiday for a full year.

The legislation is expected to cost around $30 billion and will be offset by increasing the fees that Fannie Mae and Freddie Mac charge mortgage lenders to guarantee repayments of new mortgage loans.


McConnell hailed the inclusion of the Keystone language.

“Here’s the single largest shovel-ready project in America,” McConnell said. “It is literally ready to go, awaiting the permission of the president of the United States.

“Some of the news outlets are calling this pipeline controversial. I have no idea why it could be called controversial,” McConnell added. “The labor unions like it. Many Democrats want it. It strengthens our national security by decreasing the amount of oil we get from unfriendly countries.”

Senate Majority Leader Harry ReidHarry Mason ReidMcConnell not yet ready to change rules for Trump nominees The Hill's Morning Report — Sponsored by CVS Health — Trump’s love-hate relationship with the Senate Trump to press GOP on changing Senate rules MORE (D-Nev.) said he was one of the first members of Congress to oppose the project but he felt it was necessary to grant Republicans a concession to get extended tax relief and unemployment benefits.

“I was responsible for putting it in this bill,” Reid said. “That’s how legislation works. I would  also say that we’re thankful that we’ve worked together to make sure that 160 million people have not a tax increase but a continued tax break. And I’m also thankful that the lifeline for unemployed people is going to continue for at least 60 days."

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The Congressional Budget Office released a score for the bill just before the vote. The budget agency estimated the legislation would reduce the deficit by nearly $3 billion. 

Reid had attempted to postpone the vote until 10 a.m. to give the CBO time to finish its official cost estimate but Sen. Bob Corker (R-Tenn.) objected.

Reid had attempted a last-minute switch of the order of votes by proceeding first to a $915 billion omnibus spending bill, instead of the payroll tax holiday package.

Reid, however, also proposed making passage of the spending legislation contingent on subsequent approval of the payroll tax holiday, evidence that Democrats have used the omnibus as leverage to pressure Republicans to accept extended payroll tax relief. Corker objected to this unusual sequence.

This story was last updated at 10:15 a.m.