The House is scheduled to vote later Tuesday on the measure, which would extend for a year a reduction in the payroll taxes paid by millions of workers from 6.2 to 4.2 percent. But the bill would also require a speedy decision on construction of the controversial Keystone XL oil pipeline.
Obama had previously said he rejected linking the two issues, but he had not said officially that he would veto the measure if it passed.
In a statement, the White House said the House bill “plays politics at the expense of middle-class families, ... breaks the bipartisan agreement on spending cuts that was reached just a few months ago” in the August debt deal and “would inevitably lead to pressure to cut investments in areas like education and clean energy.”
The bill would extend unemployment benefits but reduce the maximum time the long-term unemployed can receive payments, over time, from 99 to 59 weeks. And it would avert scheduled cuts to Medicare reimbursement rates for doctors.
Despite some conservative displeasure with extending the payroll tax cut, House leaders say they are confident that the bill will pass Tuesday. But Democrats in the Senate have said the bill cannot pass there.
In the meantime, the dispute has derailed a compromise that had been brewing on a spending measure to keep the government funded at the end of the week. Without an agreement by the end of the week, Congress would bring Washington to the brink of a government shutdown for the fourth time this year.
At the White House, Press Secretary Jay Carney said Obama and Senate Majority Leader Harry M. Reid (D-Nev.) spoke Tuesday to discuss strategy.
He denied Republican charges that Reid and Obama were holding the spending bill hostage to gain leverage on the payroll tax cut issue.
“They agreed to a course of action here that would ensure on behalf of the American people, on behalf of 160 million Americans who get a pay check, that their taxes don’t go up on January first,” Carney said. “We’re not hiding from that at all. That is this president’s absolute priority and there is no reason that Congress can’t do that and get its work done on a spending bill.”
If both chambers passed the spending bill and the House passed its own payroll tax cut bill Tuesday afternoon, the House could conceivably leave town for the holidays — jamming the Senate and forcing it to take action on the GOP payroll bill or allow the tax cut to expire.
“The president made clear that we should not take as a promise that Republicans are going to not leave town without ensuring that 160 million Americans have this payroll tax cut extended,” Carney said.
Michael Steel, spokesman for House Speaker John A. Boehner (R-Ohio), responded Tuesday afternoon that “the White House threatened to veto its top legislative priority for reasons that The Washington Post has reported are entirely fictitious. In terms of governing, this amounts to legislative malpractice. After the House passes the Middle Class Tax Relief and Job Creation Act, the Democrats who run Washington will have to act. The Senate can take up our bill and amend it, or they can pass their own bill. But they can’t continue to shirk their responsibility to govern. America can’t wait.”
This post has been updated since it was first published.