Obama rejects efforts to tie tax cut extension to Keystone pipeline

Demonstrators listen to speakers in Lafayette Park across from the White House in Washington, D.C., November 6, 2011. Thousands of people descended on the White House to join hands with one another in protest against the Keystone XL pipeline. KAREN BLEIER/AFP/Getty Images

President Obama (R) and Prime Minister Stephen Harper of Canada participate in a news conference in the South Court Auditorium, next to the White House December 7, 2011 in Washington, DC.
Photo by Pete Marovich/Getty Images

Updated: 4:51 p.m. ET

President Obama on Wednesday pledged to reject any efforts to tie a payroll tax cut extension to the controversial Keystone XL Oil Pipeline -- or any other "extraneous" issue.

In a joint press conference with Canadian Prime Minister Stephen Harper, Mr. Obama stopped short of threatening to veto a payroll tax cut bill that included measures regarding the Keystone XL pipeline 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." 

"I think it's fair to say that if the payroll tax cut is attached to a whole bunch of extraneous issues not related to making sure that the American people's taxes don't go up on Jan. 1, then it's not something that I'm gonna accept," Mr. Obama said. "And 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."

"Everybody should be on notice," he added. "The payroll tax cut is something that House Republicans as well as Senate Republicans should want to do regardless of any other issues... It shouldn't be held hostage for any other issues that they may be concerned about it."

The president reiterated that he will examine "all the options" and consequences before making a decision on whether or not to approve TransCanada's 1,700-mile underground oil pipeline, and denied that politics were at play in his recent decision to delay a verdict on its fate.

"With respect to the politics, look - this is a big project with big consequences," Mr. Obama said. "We've seen Democrats and Republicans express concerns about it. And it is my job as president of the United States of America to make sure that a process is followed that examines all the options, looks at all the consequences, before a decision is made."

Harper has expressed his disappointment over Mr. Obama's delaying the decision, but said on Wednesday that he was confident Mr. Obama has an "open mind" about the issue.

"I think my position, the position on the government of Canada on this issue is very well known, and of course Barack and I have discussed that on many occasions," Harper told reporters at the press conference. "He's indicated to me as he's indicated to you today that he is following a proper project to eventually take that decision here in the United States and that he has an open mind in regards to what the final decision may or may not be."

"I take that as his answer and you can appreciate that I would not comment on the domestic politics of this issue or any other issue here in the United States," he added.

Republicans have in recent days threatened to include a provision in a bill to extend the payroll tax that would take decision-making power over the pipeline -- which Republicans say would create jobs, but which liberals reject as environmentally unsound -- out of Mr. Obama's hands.

Some top Republicans used the president's summit with the Canadian prime minister as an opportunity to reintroduce the issue.

"Today, the President welcomes Canadian Prime Minister Stephen Harper to the White House, and it's my hope that the Prime Minister convinces President Obama to reverse his recent decision to delay the Keystone XL Pipeline," said Sen. Minority Leader Mitch McConnell, R-Ky., in a statement. "The President has said repeatedly that jobs are his top priority, says he wakes up every morning thinking about how he can create jobs. Yet here's the single greatest shovel-ready project in America, ready to go, and for some reason he's suddenly not interested." 

And House Speaker John Boehner indicated in a statement Wednesday afternoon that Republicans would be willing to put up a fight over the proposed provision.

"We are working on a bill to stop a tax hike, protect Social Security, reform unemployment insurance, and create jobs. If President Obama threatens to veto it over a provision that creates American jobs, that's a fight we're ready to have," said Boehner spokesman Michael Steel in a statement.

Mr. Obama, however, warned Congress that he would not let the pipeline nor any other "extraneous" issues weigh down his much-touted payroll tax cut extension. 

"My warning is not just specific to Keystone," Mr. Obama said. "Efforts to tie a whole bunch of other issues to what's something that they should be doing anyway will be rejected by me."

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