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White House Lays Down Markers on Payroll Tax, Spending

White House Press Secretary Jay Carney effectively gave up Thursday on passing a new tax on millionaires, while openly tying a final deal on an omnibus spending bill to getting a payroll tax cut passed.

Carney told reporters Thursday that an extension of the payroll tax cut is the president’s No. 1 priority, not the millionaire tax.

“The priority here was not the payfor … the priority here is to make sure taxes don’t go up,” he said. Senate Democrats have repeatedly lost votes that attached the payroll tax holiday extension and other things to a new tax on those making more than $1 million a year.

The payroll tax cut extension and the omnibus have become linked this week as each party sought to gain leverage over the other in the payroll tax debate.

“What cannot happen is that Congress takes care of its spending bill but doesn’t take action to make sure Americans’ taxes don’t go up,” Carney added.

Carney also criticized efforts by Republicans to tie the payroll tax bill to a demand for an accelerated review of the Keystone XL pipeline proposal. But he stopped short of saying any pipeline language would result in a veto. He did, however, reiterate the White House’s threat to veto the House Republican bill because it cuts discretionary spending caps agreed to by both sides as part of the debt limit agreement.

“We had a deal and we expect Members of Congress to keep their word on a deal that’s just a few months old,” Carney said.

Separately, Carney also torched the new Medicare proposal by House Budget Chairman Paul Ryan (R-Wis.) and Sen. Ron Wyden (D-Ore.), which would cap Medicare spending.

Carney said the new plan would shift costs to seniors, like Ryan’s earlier plan, and would “end Medicare as we know it” for millions of seniors by undermining traditional Medicare.

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