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 more than 160 million people will avoid a 2 percentage point payroll tax increase next year.
But the calm, collegial legislative day was deceptive. When lawmakers return in January, they will 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. If no action is taken before Feb. 29, it will rise to 6.2 percent.
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 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 on Friday 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.
"Because of this agreement, every working America will keep their tax cut," Obama said.
"When Congress returns, I urge them to keep working without drama, without delay, to reach an agreement that extends this tax cut as well as unemployment insurance through all of 2012."
Obama said he thought that constituent voices helped break the deadlock.
"You didn't send us to this town to play partisan games and to see who's up and who's down. You sent us here to serve and make your lives a little bit better, to do what's right," he said.
There were few signs that Congress is getting the message.
House Majority Leader Eric Cantor, R-Va., maintained that the two sides are not far apart, but Rep. Chris Van Hollen of Maryland, the top House Budget Committee Democrat, countered, "Just not true. I mean, that's make-believe."
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.
The current two-month package, costing an estimated $33 billion, will be funded by raising fees levied by mortgage giants Fannie Mae and Freddie Mac.
Preserving the Social Security tax break alone for a year will cost an estimated $112 billion.