Payroll-Tax Agreement Reached

Senate leaders announced Friday that an agreement “in principle” had been reached over extending the payroll tax for two months. Under the Senate agreement, the rate paid by the 160 million workers will remain at 4.2 percent through February, rather than reverting back to 6.2 percent at the start of the new year. The two-month plan will cost around $40 billion. But the deal has some caveats: it will require the White House to decide within 60 days on the controversial Keystone XL pipeline. Republicans had blocked the extension of the payroll tax to force President Obama to make a decision on the pipeline faster, an issue that has divided environmental and union leaders.