Senate Agrees to Extend Payroll Tax Cut for 60 Days Package requires Obama make decision on Keystone XL pipeline quickly By Kate Seamons, Newser Staff Posted Dec 16, 2011 9:11 PM CST 7 comments Comments Senate Majority Leader Harry Reid of Nevada, left, confers with Sen. Chuck Schumer, D-N.Y., as Senate Democrats hold closed-door negotiation on the payroll tax cut extension. (AP Photo/J. Scott Applewhite) (Newser) – It looks like we're getting there. The Senate tonight agreed "in principle" to extend the payroll tax cut through February; they will vote tomorrow, which means the House will do the same next week. Mitch McConnell expressed optimism regarding the deal's fate in the House; if it passes, the payroll tax rate would hold steady at 4.2%, rather than reverting to 6.2%, and benefits for the long-term unemployed would be extended for 60 days as well. In a concession to House Republicans, the package requires President Obama make a swift decision on whether to OK the construction of the Keystone XL oil pipeline. The two-month package comes with a $40 billion price tag, reports the Washington Post, which would be offset with though things like higher fees on lenders Fannie Mae and Freddie Mac.