WASHINGTON — President Barack Obama has vowed to veto
a GOP proposal that would attach the controversial Keystone XL pipeline
project to his proposal for a payroll tax cut for working Americans.
Obama’s
opposition Wednesday essentially thwarts House Speaker John A.
Boehner’s effort to use the pipeline as a way to attract votes for the
payroll tax holiday from reluctant GOP lawmakers. The pipeline from
Canada to the Gulf of Mexico is a priority for Republicans, who say it
will create jobs. Critics say it will cause environmental damage, and
the president has postponed a decision on it until after the 2012
election.
“Any effort to try to tie Keystone to
the payroll tax cut I will reject,” Obama told reporters after a meeting
with the prime minister of Canada.
“The payroll
tax cut is something that House Republicans, as well as Senate
Republicans, should want to do regardless of any other issues. The
question is 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 $1,000? So it shouldn’t be held
hostage for any other issues that they may be concerned about.”
The
tax break expires at year’s end and GOP leaders have struggled to
compile a package that could pick up enough Republican votes to pass
Congress.
But Boehner, R-Ohio, was undeterred by
the president’s opposition. Boehner has been working behind closed doors
to overcome a rift among Republicans that has divided the party on one
of its core issues — tax policy. He is working compile a broad
legislative package that would include the payroll tax holiday, an
extension of long-term unemployment benefits that also expire Dec. 31
and other measures.
“We are working on a bill to
stop a tax hike, protect Social Security, reform unemployment insurance,
and create jobs,” said Boehner spokesman Michael Steel. “If President
Obama threatens to veto it over a provision that creates American jobs,
that’s a fight we’re ready to have.”
Republicans
in the Senate have already rejected earlier attempts to approve the tax
break, punting the issue to their colleagues in the GOP-led House. One
of the GOP rank-and-file’s chief concerns has been that the tax break
would reduce the revenue stream to Social Security, even though the
funds would be replenished. The chief actuary for the retirement system
said Wednesday the change would not affect the trust fund.
The
Senate has rejected the Democratic proposal to pay for the tax break by
imposing a surtax on those earning beyond $1 million a year, as well as
a GOP plan to pay for the costs with spending cuts elsewhere in the
budget.
Boehner’s plan is expected to include a
mix of options that have been floated, including a pay freeze on federal
employee salaries, prohibitions on millionaires receiving food stamps
or unemployment benefits and others. He is also expected to attach the
Keystone pipeline provision and another environmental measure that would
rollback regulations on air emissions from boilers in an effort to
attract GOP votes. The package is expected to be unveiled Thursday.
Obama cautioned against loading up the payroll tax break legislation with too many extras that Democrats do not support.
“My
warning is not just specific to Keystone,” Obama said. “Efforts to tie a
whole bunch of other issues to something that they should be doing
anyway will be rejected by me.”
Obama told
Democratic during an earlier closed-door meeting at the White House that
he would stay in Washington until the payroll tax break was renewed.
“Our holiday gift to American families is not going to be a tax increase,” said Sen. Richard Durbin, D-Ill., after the meeting.
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