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Senate negotiators reach deal on payroll tax cut extension

WASHINGTON -- Senate negotiators reached a deal Friday on a two-month extension of the payroll tax holiday, unemployment benefits and Medicare payments to doctors.

The deal, if approved by Congress, would require President Barack Obama to make a decision within 60 days whether to permit the construction of the Keystone XL pipeline, which would transfer oil from Canada oil sands to Gulf of Mexico refineries. The White House has resisted being forced into expediting a decision.

Key provisions of the deal:

  • Lasts for two months and costs about $40 billion.
  • Extends the payroll tax holiday at the current 4.2 percent.
  • Slight reform to unemployment benefits, but a Democratic Senate aide said the changes were "not nearly as draconian as the GOP wanted originally."
  • Fends off a 28 percent cut in Medicare payments to doctors.
  • Pays for the extensions through higher transaction fees when folks use Fannie Mae or Freddie Mac.
  • Requires Obama to decide whether the pipeline is in the national interest.

Republicans liked the deal because of the mechanism for paying for it and because of the Keystone provision.

State Department warns GOP on pipeline fast-track attempt

Sen. Marco Rubio, R-Fla., told NBC News on Friday night that he will vote for the bill, saying, "It’s the best they can do … Look I’m always in favor of longer-term permanent solutions, but this is as far we could get on their side. On the other hand, I think we have a pretty stable solution when it comes to the issue of the pipeline, and hopefully the president will make the right decision that it's in our national interest.”

The Senate will vote on the bill Saturday and is expected to pass it. The House could vote on it as early as Monday. The House could always do something called "unanimous consent" when the chair passes something if nobody disagrees. But a House GOP leadership aide told NBC News: "We have not signed off on anything -- and will not until we talk to our members."

It's expected that House Speaker John Boehner will let his members go on the record on this bill and the House will be called back into session to vote on it.

Senate Minority Leader Mitch McConnell of Kentucky acknowledged that the same fights would resurface.

“So we’ll be back discussing the same issues in a couple of months, but from our point of view we think the Keystone pipeline is a very important job-creating measure,” he told NBC News.