robin wright. i'm joe johns in for candy crowley, and this is "state of the union." the white house has led a very public campaign for the payroll tax cut extension which would save average and working americans $1,000 in higher taxes next year. after weeks of negotiations, a break-through. the senate yesterday voted to extend the tax cut and unemployment benefits for just two months. the house still has to act. president obama seems satisfied but he let congress know he is not backing off a full-year extension. >> it would be inexcusable for congress not to further extend this middle class tax cut for the rest of the year. it should be a formality and hopefully it is done with as little drama as possible when they get back in january. >> but he made no mention of the keystone pipeline compromise. to get republicans on-board, democrats agreed to a provision which says the president must make a decision within 60 days on extending an oil pipeline from canada to texas. the president had initially threatened to veto any payroll extension bill that included the pipeline. so what changed? some democrats, like senator carl levin, have a theory. "the president is apparently just going to use the option given to him not to let it go forward." so, gene sperling, is the president going to pass on the keystone xl pipeline project? >> look, the president put his essential principle for december was that congress could not go home and allow taxes to go up on 160 million americans or to let millions of americans who are out there pounding the pavement every day for a job see their unemployment benefits cut off. this overwhelming bipartisan vote yesterday met that core principle of the president. you were right that the president did make clear that he was not going to allow congress to tie to that vote something that would mandate or force him to accept the keystone permit when there was not adequate time to do a health and safety environmental review. because nothing in this bill mandates the president to do that. this was, whether wise or not, did not go against his veto threat or his core principle of making sure that we do not see taxes going up on 160 million americans when the economy still needs to strengthen much further. >> are you of the opinion that the president needs more than 60 days to make a decision on that? and is it likely then that the president will say no? >> well, the state department -- the experts at the state department who are authorized for our government to make that very serious and complex review made clear before this legislation was even voted on that if they were only given 60 days to look at the alternative routes in nebraska, and to do the serious environmental and safety and health reviews, that that would be enough time and it would make it almost certainly impossible for them to extend that permit. but i can't add or subtrabt from what the experts at the state department said. >> but likely that he'll say no. >> well again, i just referred back to what the state department said. they said it was very unlikely that 60 days would be enough time for them to be able to guarantee to the american people that an adequate safety and health and environmental review had been done. >> waking up this morning, hearing from people on the house side, they're saying they're not so sure this two-month deal is good enough. they'd like to see a 12-month deal, and i've even been told it is unlikely this bill that has been passed by the senate is going to pass the house. do you feel as though there is time for the white house and the congress to work out a 12-month deal between now and january 1st? >> you know, the president proposed the american jobs act more than 100 days ago. and that was a plan that if fully passed would add 1.3 million to 1.9 million jobs. it had many more additional measures, some with great bipartisan support such as cutting taxes for 6 million small businesses employing 56 million americans. so of course, the president would like more, but here's what was significant about the vote yesterday -- it had 89 votes. the compromise to extend the payroll tax on unemployment for 60 days into next year had 90% support. the only things that get 90% support in the united states senate these days are mom, apple pie and chocolate ice cream. so i really think it is very unlikely that the house would disrupt this compromise, overwhelming compromise, six days before christmas, especially when, as the president said, once congress speaks with such an overwhelming voice of the importance of extending payroll tax relief for 60 million workers, the chances are very small that we would not come to, as the president said, a no-drama compromise to extend it for the full year. and our economy so needs this. this will affect not only those working families, but it will increase jobs by hundreds of thousands. >> the difference between a two-month deal and a 12-month deal apparently was how you pay for it. how close were you with the senate? or the house of representatives on how to pay for a 12-month deal? what's the hold-up? >> i think the majority leader, harry reid, who did a tremendous job in getting this compromise, was working together with the republican leader mitch mcconnell. my understanding is that they'd made a lot of progress, but understanding the importance of what the president said about nobody going home and not coming back until mid-january when taxes would have already gone up on 160 million americans when hundreds and hundreds of thousands of workers would have lost their ui was unacceptable. and i think they realized that if they could come together with an overwhelming bipartisan compromise to extend this for two months, it would, as the president suggested, make it a virtual certainty that we would all work together to extend this unemployment insurance and the tax relief for 160 million working americans, as you said, up to -- averaging $1,000 per family, that this would be extended for the full year. >> can you categorically rule out then that there will be a 12-month deal before the beginning of the year? >> well, this is washington, d.c. don't categorically rule out anything. but as i said, this had 80 -- this compromise in the senate passed 89-10. 90% compromise. and i think the reason why i think this will go forward is because, what i think everybody understands is that it is not hard for one side to pass a bill. what would give us -- what gives you confidence that the payroll tax cut will be extended for a full year and that 160 million americans will get that tax relief next year when they and our economy need it is the fact that there was a bipartisan compromise. so i think if somebody cares deeply about ensuring that the tax -- payroll tax cut is extended for the year, the best thing they can do to give confidence of that is support this overwhelming bipartisan compromise in the senate. >> the speaker himself of the representatives was saying on another program this morning that he doesn't agree with this two-month extension. it doesn't sound like this is going to be so easy to do. no way to go back to the drawing table. >> well, as i said, of course this president would like a full year. he'd like much more. he'd like to see everyone agree to the full measure of his american jobs act which, as you know, included saving hundreds of thousands of teacher and first responder jobs, including hundreds of thousands of construction workers putting them back to work rebuilding our roads, schools and businesses, giving 6 million small businesses tax relief. we all want move. what we can do to get a win for the economy and jobs and working families is find that bipartisan compromise. so again, by supporting this bipartisan compromise, i think that's the best way to send a clear signal to the american public we are going to put the economy first, jobs first, and politics last for a chance. >> gene sperling, thank you so much for coming in. great to talk to you and happy holidays. hopefully we'll be talking to you again soon. >> thanks for having us. appreciate it. we'll get perspective from the senate with roy blunt and robert menendez after the break. this was the gulf's best tourism season in years. all because so many people came to louisiana... they came to see us in florida... make that alabama... make that mississippi. the best part of the gulf is wherever you choose... and now is a great time to discover it. this year millions of people did. we set all kinds of records. next year we're out to do even better. so come on down to louisiana... florida... alabama... mississippi. we can't wait to see you. brought to you by bp and all of us who call the gulf home. selling fishcakes from the back of his truck, and in 1942, of course, they were sent away. after the war, as a japanese coming back from camp, he started a little store on main street in seattle. of course they needed some money, and bank of america was the only bank who would talk to my father. and we've stayed with bank of america. we have four stores now, three in the pacific northwest and one in oregon. my parents would not believe how popular it is now. nice, huh? yeah. you know what else is nice is all the savings you can get on cruze and traverse over there. oh! that's my beard. [ chuckles ] it's amazing. ♪ [ male announcer ] this holiday, chevy's giving more. now very well qualified lessees can sign and drive a 2012 cruze ls for around $199 a month. ♪ the new spark card from capital one. spark miles gives me the most rewards of any small business credit card. the spark card earns double miles... so we really had to up our game. with spark, the boss earns double miles on every purchase, every day. that's setting the bar pretty high. owning my own business has never been more rewarding. coming through! [ male announcer ] introducing spark the small business credit cards from capital one. get more by choosing unlimited double miles or 2% cash back on every purchase, every day. what's in your wallet? here to talk about the work of the senate and that payroll tax extension, democratic senator robert menendez of new jersey, and senator roy blunt of missouri who was recently elected to the senate republican leadership. senator blunt, start with you. house passage of this payroll tax deal is just not a done deal yet. we're hearing from the speaker of the house on another program saying he's not happy with this two-month extension. did you all in the senate leadership communicate with the house leadership on this or how did all this get messed up? >> well, i don't know. i really don't officially become a member of the senate leadership until we start the year next year. it is my first year in the senate trying to figure the senate out still but i do understand the house pretty well. in fact i had a couple of calls from some of mu buddies in the house this morning saying we don't want it do this, we like the one-year extension that the house voted for and that was bipartisan, too. not as bipartisan as the senate vote but several democrats joined republicans said let's do this for a year, let's include the keystone pipeline, let's pay for it so there is no tax increase. senate also was a paid-for bill, so no tax increase, a paid-for bill, some job creation added to it. i guess we'll just have to work this out. i heard gene sperling say it is washington, anything could happen and it still might, but i think our friend in the house are going to have to work through this. >> so senator menendez, are you playing on coming back to town here? how likely is it that the senate is actually not out of here for the holidays yet? >> well, look. in 24 hours, middle class families in this country went from relief that they had a continuing payroll tax cut and $1,000 in their pockets to seeing republicans in the house, because in their own words, they're itching for a fight with democrats and the white house, to undermine that relief. you know, i'd love to see a year, too, but i want to see a year in which we pay for it in a way that doesn't take money from the middle class to give it to the middle class. i mean in the house version, they take money from middle class families in medicare, they take money from middle class families in health care, they take money from middle class civil servants. so the question is, yeah, i'd love to see a year, too. we had proposals for a year. if they're willing to stop fighting for millionaires and billionaires and finally start fighting for the middle class, we could have a full year extension which we all want. but there's no wonder that the republican -- key republican pollster has said the public doesn't trust you on the middle class. this is the latest example. >> i'd just ask you to respond to that. sfli don't know what republicans in the house are say they're itching for a fight. i think they're saying they wanted the one-year extension. they paid for it. there was no tax on anybody in the senate bill, either. i know bob menendez would love to increase taxes as part of any package but this package in the senate didn't do that. they were both paid for and they both had this huge job creator. the keystone pipeline is a big thing if it could happen. the shortest path to more american jobs is more american energy and more jobs that relate to american energy. keystone pipeline's 20,000 of them without a single tax dollar involved. republicans in the house and the senate and apparently a bunch of democrats in the senate as well would like a situation where we get a decision on that and can move forward. >> do you think you've just sort of given the president of the united states a way out if the house were to take this bill, that he could simply say, well, 60 days? not enough time. i'm not going to sign off on this, end of story. >> no, i think he would sign off ton, though a week ago he said he wouldn't sign a bill that wasn't for a year and he wouldn't sign a bill that was for the keystone pipeline. i think the would sign this if it got to his desk and we'll see in the next week whether it gets to his desk or not. i think the house has to deal with it and look at the fact that it was paid for, it extends not just the payroll tax but also the unemployment insurance and there is a doctor issue that's been out there since 1997 that's always been a phony pay-for that would be taken care of as well so that doctors don't have their medicare reimbursement cut back to ten-year-ago levels on january 1st. nobody wants any of these things to happen, so i believe this will be work out in a way that doesn't raise taxes, that hopefully helps create some additional private sector jobs, as well as just spending tax dollars. >> i have to ask you both, you've seen, i'm sure, the polls that talk about congressional approval ratings. they're really at historic lows right now. we have a graphic we can show you. this is a cbs news poll that shows 11% approval of the united states congress right now. and i just asked the staff to go back and look at the approval ratings of the only president who ever resigned his job in disgrace. this is richard nixon's job performance approval ratings -- 24%, actually higher than the united states congress right now which seems to be extraordinary. start with you, senator menendez. why don't people like the congress? >> well, look. people are hurting in the country. and that is very clear. i see it in my state of new jersey as i travel throughout the state, and listen to people who sometimes with tears in their eyes tell me, senator this is the first time in my life that i've been unemployed and for a long period of time and the fundamental american promise has been shaken for them. that's why we as democrats are trying to restore that promise. that's about getting people back to work. that's what the president's job package was about. that's what this payroll tax that we have been leading the fight on and that republicans have largely fought us tooth and nail. i know roy made the comment that i would want to increase taxes. bottom line is i don't want to see a greater pound of flesh being taken out of the middle class. that's what the congress dmosoen so many ways. it will go to the question in the next elections whose side do you stand up for? do you stand up for millionaires and billionaires who got some of the biggest tax cuts? or are you going to stand up for the overwhelming middle class. that's why every economist says to us you need to extend both the payroll tax and the unemployment compensation because not do so, as mark zandi said, would throw us back into recession. the krextension of the payroll x would create a million jobs. that's more than giving a tax break to the millionaires and billionaires. >> i don't know hot 11% are. congress is almost totally dysfunctional right now. all we've done this year and my first year in the senate -- i'm in the minority in the senate -- is barely keep the doors open. of course people are not satisfied with that. i do think the president's obligation to lead has not been met. his numbers are lower than any president in the history of the country at this point in his presidency. they're not nearly as low as the congress but the congress as an institution will not be on the ballot next year. president of the united states will be. >> senator blunt, let me ask you. the question of the tea party in congress, the tea party movement. a lot of controversy there and some people would blame the tea party for at least partially bringing down the numbers of the approval. but you also defeated a tea party supported member of the senate for your leadership position. do you think we're in a zone now where the tea party bubble is about to burst? >> no, i don't think that at all. i think the tea party has brought important issues to the table. i think their concern about fiscal responsibility, about paying the bill is a concern that they keep building that fire under and ron johnson, my opponent in this recent leadership race, is a great member of the senate. i look forward to working with him. i think that the focus on where are the private sector jobs and why is the federal government spending so much money was the focus of the tea party in 2010. it will be a big focus of voters in this election as well and the tea party will continue to drive that message. >> senator blunt, senator menendez, good to see you both again. hope to talk to you again soon. coming up -- jon huntsman on his conservative credentials and his strategy in new hampshire. fore! no matter what small business you are in, managing expenses seems to... get in the way. not anymore. ink, the small business card from chase introduces jot an on-the-go expense app made exclusively for ink customers. custom categorize your expenses anywhere. save time and get back to what you love. the latest innovation. only for ink customers. learn more at chase.com/ink 8% every 10 years.age 40, we can start losing muscle -- wow. wow. but you can help fight muscle loss with exercise and ensure muscle health. i've got revigor. what's revigor? it's the amino acid metabolite, hmb to help rebuild muscle and strength naturally lost over time. [ female announcer ] ensure muscle health has revigor and protein to help protect, preserve, and promote muscle health. keeps you from getting soft. [ major nutrition ] ensure. nutrition in charge! your new progresso rich & hearty steak burger soup. [ dad ] i love this new soup. it's his two favorite things in one... burgers and soup. did you hear him honey? burgers and soup. love you. they're cute. [ male announcer ] progresso. you gotta taste this soup. jon huntsman is pinning all his presidential hopes on new hampshire. he moved his campaign headquarters there a few months ago and he's held well over 100 events. and while the latest new hampshire po