US president welcomes deal worked out by divided lawmakers to extend a payroll tax cut and avoid a federal shutdown.

The US Senate passed bill to fund most federal agencies for 10 months and avert government shutdown [Reuters]

US President Barack Obama has signed into law a spending bill that Congress approved to keep the government running, the White House said.

Earlier on Saturday, the Senate had passed the $915 billion bill to fund most federal activities through next September and avert a government shutdown. It had cleared the House of Representatives on Friday.

A number of government agencies, including the Department of Defense, Environmental Protection Agency and Labor Department, faced the possibility of shutting down this weekend without the legislation to replenish their funding.

“This is spending money that also benefits families and businesses and the entire economy, and [the jobless aid is] a

lifeline that would have been lost for more than 2.5 million people in the first two months of next year if Congress had not acted,” Obama said on Saturday in brief remarks at the White House.

He urged Congress to move quickly when it returns from its winter recess to extend the tax cut for a full year, saying it would be “inexcusable” to allow the reduction to lapse.

“It should be a formality and hopefully it’s done with as little drama as possible when they get back in January,” Obama said.

Taxpayer ‘victory’

The bipartisan omnibus bill, including the $915bn bill approved by the House plus another $26.5bn for overseas contingency operations mainly for the military, “represents a victory for compromise, a victory for American taxpayers, and a victory for the appropriations process”, Daniel Inouye, chairman of the Senate Appropriations Committee, said.

Saturday also saw the Senate approve a two-month extension of a payroll tax cut and jobless benefits, a move aimed at preventing public buildings and government agencies from going dark after running out of money.

Al Jazeera’s Tom Ackerman, reporting from Washington, said it was this element of the deal that was most critical for economic improvement.

“Had that [payroll tax cut and unemployment] not been extended, economic growth in the US would have come to a halt. That kind of money, pumped into the economy, is important,” Ackerman said.

“The Senate passed that [bill], however, the House, dominated by Republicans, has yet to approve the deal,” he added.

The move came after days of heated negotiations to break the impasse, one driven by pre-positioning for President Barack Obama’s 2012 re-election bid and deep antipathy between his Democratic Party and their rival Republicans.

The root of the stalemate lay in brinkmanship by both parties over a White House push for a id=mce_marker,500 tax cut for 160 million workers and a Republican bid to force Obama to reconsider delaying a decision on a Canada-US pipeline plan.