Disagreement over Keystone oil pipeline may prevent payroll tax cut from being extended

Republicans have suggested that getting a payroll tax cut extension through Congress is dependent on adding language to the bill that begins the construction of the Keystone XL pipeline. But the Obama administration said Monday that Republicans won't earn sufficient Democratic support using that tactic.

In order to secure passage of a payroll tax cut extension by the Dec. 31 deadline, Republicans have proposed linking the tax cut to the construction of an oil pipeline that stretches between Canada and Texas. (President Barack Obama announced last month that he won't make a decision on the pipeline until 2013. He threatened last week to veto any payroll tax cut that includes add-ons such as the pipeline language.)

(Read about how the payroll tax cut fight affects you.)

Republicans, including Senate Minority Leader Mitch McConnell, mentioned past Democratic approval for the pipeline Monday, as a way to pressure Democrats to support their measure.

"Look: you're either for this pipeline project and the jobs that would come with it or you're not," McConnell said on the Senate floor. "And if you're for it, then there's no reason to oppose it just because it's not offered as a standalone measure--none. It's time to stop the posturing."

The Republican bill extends the payroll tax cut by one year, directs construction of the pipeline, extends unemployment insurance (Democrats have asked for the unemployment insurance extensions), and cuts spending. (Read a summary of the legislation from House Speaker John Boehner's office.)

Democrats say the bill won't win enough support in Congress and have indicated they will accuse Republicans of violating their no-tax pledge if the party fails to support an extension of the temporary payroll tax cut. The House is scheduled to vote Tuesday on the Republican proposal.

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