The U.S. Senate has passed a compromise measure that extends payroll tax cuts for American workers for another two months.

Lawmakers in the upper house of Congress overwhelmingly passed the legislation by a vote of 89 to 10, a day after Republicans and Democrats reached an agreement on the measure. 
President Barack Obama had pressed Congress to extend the cuts, saying that otherwise, 160 million Americans would face a tax increase next year at a time when they can least afford it.  However, the bill falls short of the president's request for a one-year extension.

The measure now goes to the House of Representatives, where lawmakers could vote on it as early as Monday.  If approved, it will go to the president for his signature.

The Senate deal also contains a provision, forcing Obama to make a final decision within 60 days on the construction of an oil pipeline from Canada to the U.S. Gulf coast.  Many Democrats and environmentalists have campaigned against the measure.

Later Saturday, the Senate is expected to take up its version of a $1 trillion deal to fund government agencies until October 2012 and avoid a partial government shutdown.

The House of Representatives voted 296 to 121 Friday in favor of the bill to fund the government.

A shutdown would have forced government agencies to halt non-essential operations, and put tens of thousands federal employees on unpaid furlough.

Republican House Speaker John Boehner said Friday that the bill was put together in collaboration with lawmakers from both major parties. 

Former House Speaker Nancy Pelosi, leader of the minority Democrats in the House, accused Republicans of political posturing and delaying tactics that caused the last-minute negotiations on such important legislation.