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Deadline looms on payroll tax cut

WASHINGTON -- Senate Republican Leader Mitch McConnell predicted Sunday that Congress will renew a popular payroll tax cut, but it remained unclear how lawmakers will resolve deep differences before the Dec. 31 deadline.

While he did not unveil a new deal, McConnell signaled that he and others anticipate having one soon.

"We're going to reach an agreement," he told "Fox News Sunday," noting that there is "bipartisan support" for extending the tax cut.

The 4.2 percent payroll tax that workers pay to fund the Social Security retirement system will return to 6.2 percent in January if Congress doesn't act. That would raise taxes on 160 million Americans an average of about $1,000 per family.

Democrats have led the charge to extend the tax break, raising pressure on Republicans to join in or face possible voter backlash in next November's congressional elections.

The House of Representatives is set to approve a Republican plan as early as Tuesday to extend the tax cut, tying it to a bid to accelerate approval of a TransCanada Corp. pipeline project between the United States and Canada.

Senate Democratic Leader Harry Reid has said the plan would be rejected by his chamber because President Barack Obama opposes the pipeline provision.

Senior congressional aides predict that Reid and the top congressional Republican, House Speaker John Boehner, will soon take the lead in brokering a deal -- just as they did in a budget fight this year to avert a partial government shutdown.

-- Reuters

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