The Senate on Saturday voted to extend the payroll tax cut by two months.
The short-term measure comes after both sides were unable to reach a comprehensive agreement to extend the cut and unemployment benefits for a full year.
The deal, passed in an 89-10 vote, includes a provision to speed up a decision on the Keystone XL pipeline, giving the Obama administration 60 days to make a call on the project.
The House still has to vote on the measure.
The impasse involved how to pay for the programs for a full year, a Democratic source and a Republican source said. However, the two-month extension would be fully paid for, according to the sources.
Senate Majority Leader Harry Reid, D-Nevada, said Democrats supported the proposed two-month deal because "that was the best we could get," as it was important to preserve the payroll tax break -- even temporarily.
Failure to pass the payroll ta x measure -- a major part of President Obama's job creation plan -- would cost working Americans an average of $1,000 in higher taxes next year.
Later Saturday, the Senate will take up a compromise spending bill to get the government funded for the rest of fiscal year 2012, which ends September 30.
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