Obama rejects bid to tie pipeline to tax row
WASHINGTON — President Barack Obama Wednesday warned he would reject any bid by Republicans to make his plans for a payroll tax cut conditional on his prompt backing for a contentious US-Canada oil pipeline.
As he met Canadian Prime Minister Stephen Harper, who supports the Keystone XL project, Obama staked out a tough stand on the latest pre-election year spat with congressional Republicans.
His intervention came after some Republicans in the House of Representatives suggested they may not approve any extension of a payroll tax cut that Obama is pushing unless he makes a swift decision on Keystone.
“First of all, any effort to try to tie Keystone to the payroll tax cut, I will reject,” Obama said as he stood beside Harper at a press conference.
“So, everybody should be on notice. And the reason is because the payroll tax cut is something that House Republicans, as well as Senate Republicans, should want to do regardless of any other issues,” he said.
“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.”
Democrats and Republicans are generally in agreement on passing an extension to a cut in 6.2 percent payroll taxes that fund the social security retirement system, but are far apart on exactly how to pay for the reductions.
Democrats want to hike income taxes on the richest Americans but Republicans are calling for a freeze in hiring of federal workers and oppose more burdens on wealthy citizens who they say create jobs.
Obama says the plans will offer working Americans a $1,500 pay rise next year, and warn everyone will pay an extra $1,000 in taxes if the extension is not passed.
Supporters say the plan to bring oil from Canada’s tar sands to the United States is the ultimate shovel-ready job creation project and could spur the hiring of thousands of workers.
Environmental activists fear an accident along the 1,700-mile (2,700-kilometer) pipeline extension would be disastrous for aquifers in central US Great Plains states.
Others oppose the multibillion-dollar project because exploiting the tar sands requires energy that generates a large volume of greenhouse gases that scientists blame for global warming.
The Obama administration has ordered an extra environmental assessment of a possible new route through Nebraska, which could delay a final decision until after next November’s election.
That move prompted Obama’s opponents to accuse him of dodging a difficult issue to avoid angering sections of his Democratic political base vote.
Republicans welcomed Obama’s threat of a new confrontation over the pipeline, in a frenetic period of political wrangling between the White House and Congress ahead of the Christmas and New Year holidays.
“We are working on a bill to stop a tax hike, protect Social Security, reform unemployment insurance, and create jobs,” said Brendan Buck, a spokesman for House Speaker John Boehner.
“If President Obama threatens to veto it over a provision that creates American jobs, that’s a fight we’re ready to have.”
Harper’s government had pressed Obama to approve the pipeline, which would stretch through Montana, South Dakota, Nebraska, Kansas and Oklahoma before ending up in Texas.
Canada, the pipeline’s lead company TransCanada, and Obama’s Republican opponents say the $7 billion project would provide the United States with a stable source of energy from an ally and create thousands of jobs.
“While it might make for inconvenient politics for the President, the administration is out of excuses and running out of time,” Boehner said.
“Prime Minister Harper has made clear that if this project is not approved, American competitors, such as China, will gain from our loss.”
In its long-awaited environmental impact statement on the project, the State Department said in August that the pipeline would be safer than most current oil transportation systems. But it later decided more study was needed.
Environmental campaigners praised Obama’s tough talk.
“I’m glad to see President Obama stand up to Prime Minister Harper and the oil industry’s friends in Congress by affirming his commitment to a rigorous review and by pledging to veto legislation that would rush a decision,” said Kim Huynh, dirty fuels campaigner at Friends of the Earth US.