Obama Rejects GOP Bid to Tie Payroll Tax Cut to Keystone Pipeline Approval

Dec 7, 2011 5:17pm

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President Obama warned congressional Republicans today that he will reject any attempt to tie a payroll tax cut extension to approval of the controversial Keystone XL oil pipeline, which supporters say would create thousands of new jobs.

“Any effort to tie Keystone to the payroll tax cut, I will reject. So everybody can be on notice,” Obama said during a press conference with Canadian Prime Minister Stephen Harper.  Last month, the administration postponed a decision on the pipeline to allow for an extended environmental review that’s expected to last until after the 2012 campaign.

“The payroll tax cut is something that House Republicans and Senate Republicans should want to do regardless of any other issues,” Obama added. “The question’s going to be, are they willing to vote against a proposal that ensures that Americans, at a time when the recovery is still fragile, don’t see their taxes go up by a thousand dollars?  So it shouldn’t be held hostage for any other issues that they may be concerned about.”

But Republicans insist Obama is playing politics with a project that has strong bipartisan support, including from labor unions, and which would help boost the lagging economy.  Harper has also publicly pressured the administration to approve the deal.

” While it might make for inconvenient politics for the President, the administration is out of excuses and running out of time. Prime Minister Harper has made clear that if this project is not approved, American competitors, such as China, will gain from our loss,” House Speaker John Boehner said in a statement before Obama’s remarks. “This project is good for the economy, and it’s good for America’s energy security.”

Boehner spokesman Brendan Buck responded to Obama’s veto threat by suggesting the House GOP bill addressing the payroll tax cut and pipeline issues should be a point of common ground. “If President Obama threatens to veto it over a provision that creates American jobs, that’s a fight we’re ready to have,” he said in a statement.

Obama denied that politics played a role in the project’s delay, saying a “big project with big consequences” deserves thorough review, which the State Department is conducting.

Harper said he discussed the issue during a meeting with Obama today and that he accepts that  Obama is “following a proper process to eventually make the decision here in the United States and that he has an open mind in regard to what the final decision may or may not be.”

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