WASHINGTON, Feb. 17 (Reuters) - Congress ended a three-month battle on Friday by passing legislation to extend a tax cut for 160 million workers, a boon for both the economy and President Barack Obama in this election year.

The outcome for Republicans and House Speaker John Boehner (R-Ohio) is far more murky. While Boehner has put behind him a bill that has been nothing but political heartache, nearly 40% of his rank-and-file voted against the measure he advanced by compromising on a core Republican cause — deficit reduction.

In quick bipartisan votes on the bill that also extends long-term jobless benefits, the House passed the measure 293-132, followed by a 60-36 vote in the Democratic-led Senate. A significant number — 91 of the 242 House Republicans — broke ranks with Boehner. Only 14 of 47 Senate Republicans voted yes, but the issue was not seen as a test of leadership of Senate Minority Leader Mitch McConnell (R-Ky.), who voted for the plan.

The bill now goes to Obama, who is expected to sign it into law promptly. Unlike previous tax and spending battles over the last year when lawmakers nearly breached their deadlines, Congress wrapped up its work with time to spare. It had until Feb. 29. when the tax cut and jobless benefits were set to end.

While adding $100 billion to the already high U.S. deficit, the bill aims to further stimulate the economy. A sustained recovery would help Obama's November re-election bid.

Had the payroll tax cut and long-term jobless benefits been allowed to expire on Feb. 29, that would have shaved a 0.7 percentage point off of economic growth this year, according to Moody's Analytics chief economist Mark Zandi.

The votes capped a fever-pitch debate in Congress that began in earnest in November. Democrats argued the legislation would help spur the economy and provide needed cash to struggling middle class families and workers, and to those who have been unable to find jobs amid an 8.3% unemployment rate.

© 2010 Thomson Reuters. Click for Restrictions.

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