Obama threatens to veto XL pipeline re-boot wrapped in payroll tax-cut package

Neil Munro White House Correspondent
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President Barack Obama said he will reject a GOP bill that would fund an extension of payroll tax cuts because it would also jump-start the approval of the Keystone XL Pipeline, which promises to employ more than 10,000 workers and decrease gasoline prices in the United States.

“Any effort to tie Keystone to the payroll tax cut, I will reject. So everybody can be on notice,” he said, during an afternoon press conference with Canadian prime minister Stephen Harper. The pipeline starts in Canada and is strongly opposed by U.S. environmentalists.

“I don’t expect to have to veto it because I expect they’re going to have enough sense over on Capitol Hill to do the people’s business and not try to load it up with a bunch of politics,” Obama added.

The pipeline is just one element of what he dismissed as “a whole bunch of extraneous issues.”

In November, Obama announced he had deferred a decision on the pipeline until after the 2012 election. Government agencies had already studied construction plan for several years, and were widely expected to approve the multi-billion dollar project.

Environmentalists applauded the surprise delay, saying it increased the prospect that they will donate to his campaign and canvass neighborhoods on his behalf.

GOP officials welcomed the threat on Wednesday. “We are working on a bill to stop a tax hike, protect Social Security, reform unemployment insurance, and create jobs,” said Michael Steel, a spokesman for House Speaker John Boehner. If President Obama wants to veto the bill “over a provision that creates American jobs, that’s a fight we’re ready to have.”

GOP leaders today prodded Obama to reverse his opposition to the XL pipeline.

They have already attached language overriding Obama’s deferral decision to a measure that extends the temporary rollback of Social Security tax payments into 2012.

Obama has repeatedly encouraged lawmakers to approve a one-year extension of the payroll-tax rollback, partly because it would provide the economy with a stimulus worth more than $100 billion during his reelection campaign.

In a speech from the Senate floor today, for example, Senate Majority Leader Mitch McConnell lambasted Obama’s deferral decision, and derided the president’s claim that he represents the intersts of working-class and middle-class Americans.

“The President has said repeatedly that jobs are his top priority, says he wakes up every morning thinking about how he can create jobs,” McConnell said.

“Yet here’s the single greatest shovel-ready project in America, ready to go, and for some reason he’s suddenly not interested. … If this episode tells us anything, it’s that the president is clearly more concerned about getting himself re-elected next year than getting somebody in Nebraska or Kansas or South Dakota or Missouri a job today.”

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