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WH Wants Payroll Tax Cut Deal Before Signing Spending Bill

Obama administration officials signaled today that President Barack Obama will not sign an omnibus spending bill until a bipartisan agreement on his payroll tax holiday can be worked out.

Although the president will not accept the appropriations measure without a deal on the payroll tax cut extension, one senior administration official said Obama would back a stopgap spending bill if Congress needs more time to reach a deal.

“If they need more time, they should take more time,” he said. “We’re not going to accept a CR that goes into January.”

The payroll tax cuts are set to expire in January, and administration officials warned that 160 million middle-class Americans could see their taxes rise as a result.

They expressed optimism that a deal would be reached, suggesting that Republican lawmakers, like their Democratic counterparts, are unlikely to want taxes raised on the middle class.

“I just don’t think at the end of the day a lot of these guys want to go home and say, ‘All of your taxes have gone up,’” another official said.

He reiterated Obama’s stance that Congress should remain in session until agreement is reached.

“It’s preposterous that we couldn’t get these things done by the end of the year,” the official said. “Can we land the plane? I think we can and we must.”

The two officials also declared “dead on arrival” a payroll tax extension measure the House is expected to vote on this evening.

The White House takes specific exception to a part of the bill that officials said forces the president’s hand on the Keystone XL oil pipeline.

In a bill that extends payroll tax cuts and unemployment insurance, demands that Democrats support, House Republicans inserted language that requires the administration to make a quicker decision on the controversial energy pipeline. But the expedited process might require the State Department to reject the pipeline outright, the officials warned. “The Republicans basically will be forcing a negative answer on Keystone,” one official said.

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