Obama applauds payroll tax deal but stays mum on Keystone pipeline

President Obama on Saturday applauded a Senate deal to extend the payroll tax holiday for two months but said Congress should do more to avert higher taxes on middle-class families.

Obama also lauded a two-month extension of unemployment benefits, which he called a lifeline for more than two and a half million people who might have otherwise lost them after the begging of next year. 

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But the president did not comment on a Republican provision in the legislation that would expedite consideration of the controversial Keystone XL oil sands pipeline.

“I’m very pleased to see the work that the Senate has done,” Obama said in a 12:30 p.m. press conference. “While this agreement is for two months, it is my expectation, in fact it would be inexcusable, for Congress to not further extend this middle class tax cut for the rest of the year.

“It should be a formality and hopefully it’s done with as little drama as possible when they get back in January,” Obama added.

Obama argued there are plenty of ways to offset the cost a yearlong tax holiday, which Republicans and Democrats have approved last year.

“My preference and the preference of most Americans is that we ask the wealthiest few Americans to pay their fair share and corporations to do without special taxpayer subsidies to cover some of the cost but I think that it’s important to get it done,” Obama said.

He cited estimates by economist that extending the payroll tax break would help the national economic recovery. 

The president said he called Senate Majority Leader Harry Reid (D-Nev.) and Republican Leader Mitch McConnell (R-Ky.) to thank them for their effort and expressed full confidence the House would approve the Senate deal.

A senior administration official told reporters the president met his core objectives entering the end-of-year negotiations.

"One, Congress cannot go home while raising taxes on the American people. Done. Two, we are not going to reopen the budget deal. That did not happen. Third, as it relates to Keystone, we were not going to accept something that dictated an outcome on Keystone. This does not do that," said the official.

Another senior administration official said Republicans imperiled the Keystone pipeline project by trying to speed its approval. 

"We would just refer you back to the State Department's comments on this las week. An expedited process is not going to allow them time to do the proper review. I don't think the State Department could have been any clearer but the Republicans in Congress sort of insisted on pushing forward even though it may result in an outcome that obviously goes against their desires," said the official. 

Democrats expect Obama will kill the Canada-to-Texas oil pipeline in response to the House GOP's provision to speed up the approval process.

Sen. Chuck Schumer (N.Y.), the third-ranking member of the Senate Democratic leadership, noted that Secretary of State Hillary Clinton, whose department has jurisdiction over the project, has said if Congress rushed the approval process, the administration will halt it.

“It doesn’t make much sense,” Schumer told reporters. “The president is totally on board with that strategy.” 

Amie Parnes contributed to this report.

This post was updated at 5 p.m.