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Unsatisfying Payroll Tax Resolution

The Senate approved an extension of the payroll tax cut, but it's not the Obama victory I'd anticipated. It isn't a defeat either, exactly. But it isn't terribly satisfying.

The extension is only for two months. You might argue that this gives Obama a political issue to clobber Republicans with around the time of the State of the Union address, but I would have thought right now was the moment of maximum leverage. It's reasonable to worry that the GOP will exact further concessions from Obama before renewing the payroll break, because they got a concession this time out that I didn't expect. Even after Obama insisted he'd veto any bill that included language forcing his hand on approval of the Keystone XL pipeline, the Senate included the language in the bill and Obama now says he won't veto it after all. Obama had hoped to delay a decision on Keystone until after the 2012 election. Now he must either approve it or kill it. He'll probably kill it, inviting an unwelcome fight.

Unlike the previous Senate votes on both Democratic and Republican plans to extend the payroll tax cut, this one was supported by a majority of Republicans and a majority of Republican leaders, including minority whip John Kyl of Arizona, who previously was very publicly against the extension. There were only 10 nays, including Democrats Pat Leahy of Vermont and Joe Manchin of West Virginia. The independent Bernie Sanders, who opposed extending the payroll tax cut all along, also voted nay, along with a smattering of Republicans.

The bill still needs to clear the House, but it probably will.