US House approves bill to renew payroll tax cut

The US House of Representatives Tuesday passed a payroll tax cut plan which is linked with the speedy approval of an oil pipeline from Canada, a bill that the White House threatened to veto.

The vote, at 234-193, saw 10 Democrats joining 224 Republicans in backing the bill. The bill also includes a provision that could speed up the approval of the 7 billion US dollar Canada-to-Texas Keystone XL oil pipeline within two months. Obama has delayed a decision on the pipeline until 2013 amid an outcry from environmentalists, a key constituency.

Republicans said that the legislation would create thousands of jobs and would extend benefits for the long-term unemployed.

“The American people want jobs,” House Speaker and Republican John Boehner said. “This is as close to a shovel-ready project as you’re ever going to see. This is exactly the description of the kind of jobs plans that the president says he wants to enact.”

However, Democrats argued that the pipeline provision should not be attached to the tax bill.

They did not want to consider the oil pipeline project in the short term due to environmental concerns.

“They (Republicans) are using the pipeline as a smokescreen and an excuse,” House Minority Leader and Democrat Nancy Pelosi said.

It is believed that the bill will not pass the Democratic-run Senate.

US President Barack Obama threatened Tuesday to veto the bill should it arrive at his desk, arguing that the bill is protecting the rich at the expense of the middle class.

A statement released by the White House said the administration “strongly opposes” the bill, adding that the legislation “plays politics”.

To extend the payroll tax cut for the middle class is a major part of Obama’s job act announced in early September this year. Democrats want to give money to middle-class families while collecting some revenue from the rich.

However, Republicans opposed raising taxes on the rich. They proposed their provisions and bundled the oil pipeline project with the payroll tax cut plan.

Analysts said the political battle over the bill will continue in the coming days.