WASHINGTON — Congress on Friday quickly and quietly approved a two-month extension of the Social Security payroll tax cut, ending a week of rancor and assuring that 160 million people will avoid a 2 percentage point payroll tax increase Jan. 1.
But the calm, collegial legislative day was deceptive. When lawmakers return in January, they'll remain far apart on agreeing to a longer-term deal.
The package approved Friday — a major victory for President Barack Obama and a setback for Republicans in the House of Representatives — will assure that the average employee will avoid paying $80 a month more in Social Security taxes after Jan. 1. The rate for employees will remain at the 2011 level of 4.2 percent. But if no action is taken before Feb. 29, it will rise to 6.2 percent.
Negotiators from each chamber are expected to convene in early January to pursue a compromise. The senators and representatives chosen are staunchly loyal to party leaders and their party lines.
Congress' agreement, reached Thursday after rebellious House Republicans abandoned their bid for a one-year deal before Jan. 1, also continues current payment rates for Medicare physicians, which otherwise would have dropped by 27.4 percent starting Jan. 1, and retains up to 99 weeks of unemployment benefits for long-term jobless workers.
The measure also provides for an expedited review of the Keystone XL pipeline. The 1,700-mile project would bring oil from oil sands in western Canada to the U.S. Gulf Coast. Obama wanted to delay the decision until late 2013 — after November's elections — as environmentalists hold strong reservations. Republicans insisted on including the pipeline decision.
Obama signed the bill into law and praised Congress. He then headed to Hawaii for the Christmas-New Year's holiday, a trip he had planned to begin Dec. 17. His wife and children went to Hawaii last week.