U.S. President Barack Obama has signed a two-month extension to a contentious payroll tax bill, ending a political stalemate between Democrats and Republicans. He calls on Congress to do more to extend the tax cut for even longer time.

Barack Obama, U.S. President, said, "We have a lot more work to do. This continues to be a make-or-break moment for the middle class in this country, and we’re going to have to roll up our sleeves together, Democrats and Republicans, to make sure that the economy is growing and to make sure that more jobs are created.We’ve got an economy that is showing some positive signs. We’ve seen many consecutive months of private sector job growth, but it’s not happening as fast as it needs to. And that means that we’ve got to redouble our efforts, working together."

U.S. President Barack Obama speaks to the press after signing into law a two-month payroll tax cut extension in the press briefing room at the White House in Washington December 23, 2011. [Agencies]

The extension of the payroll tax cut marks a resounding victory for President Barack Obama over Republicans who control the House of Representaives. It stands to benefit 160 million American workers, as well as extending unemployment benefits for millions of jobless.

The move boosts the paycheck of the average worker making a 50,000 dollar annual salary by about 20 dollars a week and will prevent almost 2 million unemployed people from losing jobless benefits averaging $300 a week. The measure was passed by voice vote in the House despite lingering grumbling from conservative tea party Republicans.

This has now bought time for negotiations early next year on how to cover the costs of a year-long extension of the two percentage point payroll tax cut, the centerpiece of Obama’s jobs agenda.

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