WASHINGTON — Senate leaders reached a deal Friday that would extend the payroll tax cut and long-term unemployment benefits for two months and require an expedited decision on the proposed oil pipeline that would run through Oklahoma.
The Senate is scheduled to vote on the deal Saturday. House members, who left town Friday, would have to consider it next week.
After long negotiations, Republicans and Democrats could not come to an agreement on how to extend the payroll tax cut — which gave the average family an extra $1,000 in 2011 — for another year. The impasse came over ways to cover the loss of funds to the Social Security system because of the tax cut.
Though the two-month agreement leaves in doubt whether more than 160 million workers will enjoy more take-home pay for all of 2012, it was a big win for Republicans who wanted to force a decision before 2013 on the proposed Keystone XL pipeline.
House and Senate Republican leaders insisted on Friday that any legislation to extend the payroll tax cut and federal unemployment benefits include a requirement that the Obama administration make a decision within 60 days on the pipeline, which would carry crude from Alberta, Canada, to the Texas Gulf Coast.
The House passed a bill on Tuesday that included the pipeline issue, along with a yearlong extension of the tax cut, an extension of unemployment benefits and a “doc fix” to ensure physicians treating Medicare patients didn't have their payments cut.
House Speaker John Boehner said Friday that the House would stand by its position on the pipeline if the Senate altered its bill.
“I will guarantee you that the Keystone pipeline will be (in the bill) when it goes back to the United States Senate,” Boehner told reporters.
And Senate Republican leader Mitch McConnell, of Kentucky, said he wouldn't be able to support any package of tax cuts and unemployment benefits unless it required a fast-track decision on the pipeline.
The 1,700 pipeline would connect to a major terminal in Cushing, OK, where a lack of capacity has slowed crude deliveries to Gulf Coast refineries.
The U.S. State Department, which must approve the cross-border pipeline, was expected to make a decision this month, but it announced a delay until 2013 to address concerns by property owners and others in Nebraska.
Republicans decried the delay as political since it would push the decision past the 2012 elections.
President Barack Obama said last week that he would reject any bill to extend the payroll tax cut and unemployment benefits if the pipeline was included as an issue.
White House spokesman Jay Carney on Friday wouldn't rule out accepting the provisions.
The Keystone provisions don't require the State Department to approve the deal, and the president still could determine that it's not in the national interest.
That would satisfy many environmental groups that backed the president in 2008, though it would be frustrating for unions that are pushing for the pipeline construction jobs.