WASHINGTON — The White House backed away from a critical veto threat Friday as top Republicans in Congress served noticed they will extend expiring Social Security payroll tax cuts only if President Barack Obama swiftly decides the fate of a proposed oil pipeline that promises thousands of jobs.
With Republicans talking tough and lawmakers from both parties anxious to leave for the holidays, Obama spokesman Jay Carney declined several times to repeat Obama's earlier statement that he would reject any attempt to link the tax cuts and the Canada-to-Texas pipeline. "There's a process at work. I'm not going to analyze what language would be acceptable and what wouldn't," Carney told reporters.
He made his comments as Republican and Democratic leaders sought a compromise on legislation to renew the tax cuts and long-term jobless benefits that are at the heart of the jobs program that Obama submitted to Congress last fall.
Racing to adjourn for the year, lawmakers moved swiftly to clear separate legislation avoiding a partial government shutdown threatened for midnight — focusing attention on the final disputed issue in a tempestuous year of divided government in an era of high joblessness and public dissatisfaction with Congress.
Obama has said extensions of the tax cuts and unemployment benefits are necessary to help nurture an economic recovery while also sustaining victims of the recession. Republicans injected the pipeline project into the legislation after the president postponed a decision on the long-studied project until after the 2012 elections.
Under the House-passed tax measure the project will go forward unless Obama decides in 60 days that its construction is not in the national interest.
"Let's not just pass a bill that helps people on the benefits side, let's also include something that actually helps the private sector create the jobs Americans need for the long term," Republican leader Mitch McConnell of Kentucky said in Senate-floor remarks that challenged Obama to give ground
In a political jab, he added, "Here's an opportunity for the president to say he's not going to let a few radical environmentalists stand in the way of a project that would create thousands of jobs and make America more secure at the same time."
Obama said on Dec. 7 that "any effort to try to tie Keystone to the payroll tax cut I will reject. So everybody should be on notice."
More recently a veto threat issued Tuesday against the House-passed version of the bill cited the introduction of "ideological issues into what should be a simple debate about cutting taxes for the middle class." Senior administration officials later told reporters that was a reference to the pipeline.
Apart from the pipeline, negotiators for the two parties struggled over other differences as they sought agreement on the last major measure of the year.
Officials said there was widespread agreement to keep the Social Security tax cut in place for 2012, noting that if it lapsed, 160 million Americans could experience a cut in take-home pay at a time when the economy is still struggling to recover from the worst recession in decades. The president had originally sought to expand the cut but has effectively jettisoned that proposal.
The president also is seeking a renewal of the current system under which a maximum of 99 weeks of jobless benefits is available for the long-term unemployed. The House measure cuts that to 79, and officials said the two sides were considering a compromise between the two levels.
Both parties want to avoid a threatened 27 percent cut in payments to doctors who treat Medicare patients, but that, too, was in flux. The House-passed bill provides a two-year reprieve at a cost of about $38 billion over a decade. Officials said it was possible that delay could be cut to a single year, depending on the level of cuts negotiators could agree on elsewhere in the budget to offset the cost.
That same issue — cuts to make sure the bill did not raise federal deficits — lay at the heart of the negotiations.
The cost of the payroll tax extension alone was estimated at $120 billion over a decade, and Obama and Democrats agreed long ago to meet GOP demands that the legislation not raise deficits.
Democrats initially wanted to slap a surtax on million-dollar income earners to cover the cost, over the protests of Republicans. The Democrats eventually relented, but not before attacking GOP senators as protectors of the rich at the expense of the middle class and arranging a pair of test votes that could well provide fodder for Senate races in 2012.
Republicans sought to wield the Keystone pipeline project as a similar sort of issue against Democrats and Obama.
While environmental groups oppose the project, several blue-collar unions support it, as do an unknown number of Democratic lawmakers.
The State Department, in an analysis released this summer, said the project would create up to 6,000 jobs during construction, while developer TransCanada put the total at 20,000 in direct employment.
The 1,700-mile pipeline would carry oil from western Canada to refineries in Texas, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma.
The spending bill would lock in cuts that conservative Republicans won from the White House and Democrats earlier in the year.
Republicans also won their fight to block new federal regulations for light bulb energy efficiency, coal dust in mines and clean water permits for construction of timber roads.
The White House turned back GOP attempts to block limits on greenhouse gases, mountaintop removal mining and hazardous emissions from utility plants, industrial boilers and cement kilns.
After a last-minute veto threat, Republicans abandoned attempts to block an administration policy to ease restrictions on visits to Cuba and on the money sent to relatives on the Communist island nation from family members living in the United States.
Additionally, the legislation bars military and economic aid to Pakistan until the administration certifies that Islamabad is cooperating on counterterrorism, including taking steps to prevent groups such as the Haqqani network from operating in the country.
The provision stems from concerns that the Pakistani government harbors terrorists, and from assertions that some government officials knew that Osama bin Laden had established residence deep inside the country. Bin Laden was killed in May by U.S. commandos who raided his fortified compound in Abattabod.
Associated Press writers Donna Cassata, Alan Fram and Jim Kuhnhenn contributed to this story