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Payroll tax deal passes Congress in rare win for Obama Payroll tax deal passes Congress in rare win for Obama
(40 minutes later)
The US Congress has approved a short-term renewal of a payroll tax cut, a day after House Republicans caved in to overwhelming pressure on the issue.The US Congress has approved a short-term renewal of a payroll tax cut, a day after House Republicans caved in to overwhelming pressure on the issue.
The bill extends the tax cut as well as unemployment insurance for two months.The bill extends the tax cut as well as unemployment insurance for two months.
Lawmakers held voice votes on the deal, requiring only a few members to be present.Lawmakers held voice votes on the deal, requiring only a few members to be present.
A joint conference committee will work on a year-long deal, after the holiday recess. The bill now goes to President Barack Obama to sign into law. A joint conference committee will work on a year-long deal after the holiday recess. The bill now goes to President Barack Obama to sign into law.
Mr Obama will make a statement at 12:15 EST (17:15 GMT), before going on a family holiday to Hawaii he had postponed because of the impasse. He is due make a statement, before going on a family holiday to Hawaii he had postponed because of the impasse.
Tea Party revolt
After Republicans and Democrats passed the bill in the Senate last Saturday, John Boehner, the Republican Speaker of the House of Representatives, put the deal to members of his party.After Republicans and Democrats passed the bill in the Senate last Saturday, John Boehner, the Republican Speaker of the House of Representatives, put the deal to members of his party.
But that conference call last weekend prompted a revolt from Tea Party-backed lawmakers, prompting this week's political showdown.But that conference call last weekend prompted a revolt from Tea Party-backed lawmakers, prompting this week's political showdown.
The president and his Democratic allies kept up relentless pressure on the House Republicans.The president and his Democratic allies kept up relentless pressure on the House Republicans.
But perhaps most tellingly, Mr Boehner and his caucus was pilloried by fellow Republican lawmakers, Bush White House strategist Karl Rove and even the conservative editorial of the Wall Street Journal. But perhaps most tellingly, Mr Boehner and his caucus were pilloried by fellow Republican lawmakers, Bush White House strategist Karl Rove and even the conservative editorial board of the Wall Street Journal.
On Thursday, the embattled House Speaker told members of his party they would make a U-turn, during a muted conference call where they could not ask questions.On Thursday, the embattled House Speaker told members of his party they would make a U-turn, during a muted conference call where they could not ask questions.
It was a rare retreat for Republicans, who since gaining control of the House in 2010's mid-term elections have wrung a string of concessions from the White House.It was a rare retreat for Republicans, who since gaining control of the House in 2010's mid-term elections have wrung a string of concessions from the White House.
Under the compromise, House Republicans came away with face-saving language to make the package more small-business friendly.Under the compromise, House Republicans came away with face-saving language to make the package more small-business friendly.
Last week, Republicans also forced Mr Obama under the deal to make a politically awkward decision on the controversial Keystone XL oil pipeline within 60 days. Last week, Republicans also forced Mr Obama under the deal to make a politically awkward decision within 60 days on a controversial oil pipeline from Canada to the US Gulf.
Conservatives were initially sceptical about extending the payroll tax break, which economists say will aid US economic recovery.Conservatives were initially sceptical about extending the payroll tax break, which economists say will aid US economic recovery.
But as Republicans demurred over the $120bn (£76bn) cost of the plan, Democrats accused them of backing tax cuts only for the wealthiest Americans.But as Republicans demurred over the $120bn (£76bn) cost of the plan, Democrats accused them of backing tax cuts only for the wealthiest Americans.
Correspondents say Republicans lost the public relations battle and the party realised it would have faced blame for an effective tax rise on US workers in a general election year.Correspondents say Republicans lost the public relations battle and the party realised it would have faced blame for an effective tax rise on US workers in a general election year.
After the Senate vote on Friday, Mr Harry Reid told reporters he wanted the new year to be turning point for Congress. After the Senate vote on Friday, Harry Reid told reporters he wanted the new year to be turning point for Congress.
"I hope this Congress has had a had very good learning experience, especially the newer members," Mr Reid said in a press conference. "The American people need this institution to work effectively," he added. "I hope this Congress has had a very good learning experience, especially those who are newer to this body," Mr Reid said in a press conference. "The American people need this institution to work effectively," he added.
Senate and House Democrat leaders named their own appointees on Friday to a conference committee tasked with extending the compromise to a full-year version, as part of the Thursday deal. Senate and House Democrat leaders named their own appointees on Friday to a conference committee tasked with extending the compromise to a full-year version, as part of the deal.