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Obama warns Congress against any add-ons to payroll tax cut

President Obama warned Congress on Wednesday not to tie approval of a payroll tax cut to other sensitive measures such as the Keystone Pipeline project, which his administration delayed last month.

Speaking at a brief news conference after a meeting with Canadian Prime Minister Stephen Harper, Obama said he would block any attempt by Congress to attach the payroll tax cut provision to another legislative measure.

“Any effort to try to tie Keystone to the payroll tax cut, I will reject,” Obama said. “Everybody should be on notice. The reason is because the payroll tax cut is something House Republicans and Senate Republicans should want to do regardless of any other issues.”

The tax cut “shouldn’t be held hostage to any other issues they may be concerned about,” Obama said. “My warning is not just related to Keystone. Efforts to tie a bunch of other issues to something they should do anyway will be rejected — by me.”

The warning came after Republican leaders pressed Obama to approve the pipeline, which would carry oil from Canada along a 1,700-mile path through the United States. The project is backed by many businesses and labor unions but opposed by environmentalists. The Obama administration last month delayed a decision on the project, citing the need for a supplemental environmental review in the face of protests over the pipeline’s ecological impact in Nebraska.

The federal review will not be complete until after the 2013 election, opening the president to charges that the delay was political.

House Speaker John A. Boehner (Ohio) was among the Republican leaders who demanded Wednesday that Obama approve the pipeline. After Obama’s threat to block a bill tying the project to the payroll tax cut, Boehner spokesman Brendan Buck suggested in a statement that a bill that includes a payroll tax cut along with other measures — most likely the Keystone Pipeline — was forthcoming.

“We are working on a bill to stop a tax hike, protect Social Security, reform unemployment insurance and create jobs,” Buck said. “If President Obama threatens to veto it over a provision that creates American jobs, that’s a fight we’re ready to have.”

Obama has been prodding Congress to approve an extension and expansion of a payroll tax cut that is due to expire at the end of the year, costing working families $1,000 next year. Republican leaders, while generally supporting the tax cut, have balked at the proposal from Obama and Senate Democrats to raise taxes on the wealthy to pay for it. Moreover, they must contend with opposition from some conservatives who see extending the payroll tax cut as a short-term gimmick.

House GOP leaders have been preparing to add a Keystone provision to a payroll tax cut to lure votes from their restive rank and file. Boehner said Wednesday that “good conversations” were ongoing among Republicans about a GOP payroll tax cut bill.

“We’re continuing to talk to our members,” Boehner said. “We talked to them last week. We continue to work on this. And we expect before the week’s over, we’ll talk to our members again. I think it’s important for us to have these deliberations with our colleagues before we introduce a bill.”

At the news conference with Harper, who supports the Keystone project, Obama said he told his Canadian counterpart that “it is important to make sure all questions regarding the project are understood, especially the impact on the health and safety of the American people.”

Republicans, some Democrats and labor unions have supported the pipeline, saying it could create thousands of jobs. But environmentalists have raised concerns about its potential impact on Nebraska’s sensitive Sandhills section.

The Keystone project and payroll tax overshadowed an announcement from Obama and Harper of two new bilateral agreement aimed at easing cross-border trade and improving security.

When Obama allowed one question from the U.S. media, a reporter asked him about criticism that he is playing politics with Keystone.

“This is a big project with big consequences,” Obama replied. “We’ve seen Democrats and Republicans express concern about it. My job as president is to make sure the process that is followed examines all options and all consequences before a decision is made.”

David Nakamura covers the White House. He has previously covered sports, education and city government and reported from Afghanistan, Pakistan and Japan.

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