Obama signs spending bill, averts shutdown

The US Senate passed the spending bill and a two-month payroll tax holiday extension on Saturday.

Last Updated: Dec 18, 2011, 21:00 PM IST

Washington: US President Barack Obama on Sunday
faced a new congressional gridlock over a payroll tax cut
after he signed into law a USD 1 trillion spending bill,
averting a government shutdown.

The US Senate passed the spending bill and a two-month
payroll tax holiday extension on Saturday, punting that problem
down the road, but not for long.

Obama had initially sought a one-year extension for the
tax cut and unemployment benefits.

The compromise tax measure further dented Obama`s
authority by forcing him to revisit a contentious pipeline
plan, and while the legislation passed easily, its short
duration highlighted the inability of feuding lawmakers to
bridge the divide on a more comprehensive deal.

Obama told reporters he was "pleased" with the deal, but
made it clear he was expecting more.

"While this agreement is for two months ... it would be
inexcusable for Congress not to further extend this
middle-class tax cut for the rest of the year" when they
revisit the issue in early 2012, he said at the White House
shortly after the Senate vote.

But Republican Senate Minority Leader Mitch McConnell
said that "in order to achieve something around here, you have
to compromise."

The deal thrusts the contentious Keystone XL pipeline, to
carry oil from Canada`s tar sands to the US Gulf Coast, back
onto the political agenda.

Obama had put off a decision on the project, which pits
environmentalists against labor unions and business interests
in his political base, until after the November 2012 elections
in which he is hoping to secure a second term. The move drew
Republican howls.

Instead, the bill gives him just 60 days to review the
pipeline project, a deadline Obama did not mention during his
brief remarks.

"This bill will stop President Obama`s delaying tactics,"
said Republican Senator Richard Lugar.

"It is absolutely incredible that President Obama wants
to delay a decision until after the 2012 elections apparently
in fear of offending a part of his political base."

The White House`s apparent concession in agreeing to
legislative language requiring Obama to ostensibly reconsider
it within two months will enrage environmentalists who lean
Democratic and campaigned against the project.

Republican Senator Kay Bailey Hutchison acknowledged
"stark" differences between the parties over how to pay for
the tax cut extension, with some lawmakers on both sides of
the aisle furious that the bill slashes inputs to the already
creaky Social Security system.

"We don`t think that we should defund Social Security,"
Republican Senator Mark Kirk said alongside his Democratic
colleague Joe Manchin. Both had voted against the measure.

PTI