WASHINGTON: US President Barack Obama yesterday faced a new congressional gridlock over a payroll tax cut after he signed into law a $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 legislators to bridge the divide on a more comprehensive deal.
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 labour 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.