25 Dec 2011

US payroll tax cut extended

2:10 pm on 25 December 2011

The US Congress has approved a short-term renewal of a payroll tax cut, breaking a lengthy deadlock between President Barack Obama and the Republic-controlled House of Representatives.

Lawmakers held voice votes on the deal, requiring only a few members to be present.

The BBC reports the bill extends the tax cut as well as unemployment insurance for two months and saves about $US1000 a year for an average US income.

Mr Obama signed it into law before leaving for Hawaii for the holidays and urged Congress to work on a longer extension to the package "without drama, without delay".

A joint conference committee will work on a year-long deal after the holiday recess.

The passage of the bill is a rare win for the president, the BBC says.

He and his Democratic allies kept up relentless pressure on House Republicans, finally forcing them to cave in.