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 CorkerBob CorkerSenate honors Tennessee coach Pat Summitt GOP senator: Something 'very, very good' can come from Brexit vote GOP senators: Brexit vote a wake-up call MORE (R-Tenn.), Jim DeMint (R-S.C.), Ron JohnsonRon JohnsonPollster: Clinton leads in 5 battlegrounds Juan Williams: GOP sounds the sirens over Trump Vulnerable Republican seeks edge on homeland security MORE (R-Wis.), Mark KirkMark KirkSenate panel approves 0M for international climate fund Senator calls for pause in accepting Syrian refugees after Istanbul attack Overnight Healthcare: Blame game over Zika funding MORE (R-Ill.), Pat Leahy (D-Vt.), Joe ManchinJoe ManchinOvernight Finance: Trump threatens NAFTA withdrawal | Senate poised for crucial Puerto Rico vote | Ryan calls for UK trade deal | Senate Dems block Zika funding deal Overnight Energy: Volkswagen reaches .7B settlement over emissions Senators rally for coal miner pension fix MORE (D-W.Va.), Jerry MoranJerry MoranSenate panel approves lifting Cuba travel ban Boost in Afghan visas blocked in Senate Senate contradicts itself on Gitmo MORE (R-Kan.), Bernie SandersBernie SandersCutting corners in a federal campaign is criminal Sanders is only helping Trump by staying in the race 'Feel Bern' PAC comes under scrutiny MORE (I-Vt.), Jeff SessionsJeff SessionsTrump hopes for boost from Brexit vote GOP senators: Brexit vote a wake-up call Sessions warns of 'radical' Clinton immigration policy MORE (R-Ala.) and Richard Shelby (R-Ala.) voted against the package.

Sen. Rand PaulRand PaulTrump: Rivals who don't back me shouldn't be allowed to run for office Trump hires Rand Paul's former digital director: report Trump flexes new digital muscle 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 BoehnerEXCLUSIVE: Pro-Hillary group takes 0K in banned donations Ryan: Benghazi report shows administration's failures Clinton can't escape Benghazi responsibility 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 McConnellMitch McConnell'Never Trump' plots its last stand Dems leery of Planned Parenthood cuts spark Senate scuffle Overnight Finance: Senate sends Puerto Rico bill to Obama | Treasury, lawmakers to meet on tax rules | Obama hits Trump on NAFTA | Fed approves most banks' capital plans 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 ReidDems leery of Planned Parenthood cuts spark Senate scuffle Overnight Finance: Senate sends Puerto Rico bill to Obama | Treasury, lawmakers to meet on tax rules | Obama hits Trump on NAFTA | Fed approves most banks' capital plans Senate passes Puerto Rico debt relief bill 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.