Speaker: Will keep pipeline language in tax bill (AP)

WASHINGTON ? House Republicans will stick to their insistence that a bill extending a payroll tax cut and jobless benefits include language speeding work on a controversial oil pipeline, Speaker John Boehner said Friday.

The remarks by Boehner added a contentious backdrop to negotiations over a compromise payroll tax cut measure. With President Barack Obama and many congressional Democrats opposed to accelerating work on the proposed Keystone XL pipeline, which would run for 1,700 miles from western Canada to Texas, that conflict has been one of the major hurdles to a bipartisan deal on the payroll tax package.

Meanwhile, the House began debating a $1 trillion spending bill that would avert a partial federal shutdown beginning Saturday. That measure, which would finance dozens of federal agencies through next September, would replace a stopgap spending bill that expires at midnight Friday and is sure to pass.

Negotiations on the payroll tax cut legislation between Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., were continuing Friday. Leaders are hoping that Congress will finish that bill and others and end its work for the year in the next few days.

Reid said Friday that bargainers were making good progress in those talks, a sentiment echoed by McConnell.

"The majority leader and I are making significant progress on reaching agreement on a package that will have bipartisan support, I hope," McConnell said. "I think we're going to get to that place."

With those talks under way, House leaders planned to send their members home after finishing their work Friday, with plans to return when the Senate produces a payroll tax cut measure for the House to vote on.

But Boehner, R-Ohio, struck a combative tone following a closed-door meeting Friday morning of House Republicans.

"I guarantee that the Keystone pipeline will be in there when it goes back to the United States Senate," Boehner said.

This year's 4.2 percent payroll tax rate will jump back to its normal 6.2 percent on Jan. 1 unless action is taken by Congress. Few lawmakers want to be blamed for a tax increase that would affect 160 million people.

Extended benefits for long-term jobless people will also expire Jan. 1 without congressional action.

That same day, a 27 percent cut in Medicare reimbursements to doctors would take effect unless lawmakers act, a reduction that could convince some doctors to stop treating Medicare patients.

Even without the Keystone dispute, bargainers had still not reached agreement on how to extend a payroll tax cut through 2012, with major disputes remaining over how to finance the package.

Because of their ongoing disagreements, Senate leaders have prepared a shorter, two-month extension of the payroll tax cut and jobless benefits to give themselves more time to reach an agreement.

The two-month payroll tax cut bill would also delay the Medicare cuts for two months.

Source: http://us.rd.yahoo.com/dailynews/rss/economy/*http%3A//news.yahoo.com/s/ap/20111216/ap_on_go_co/us_congress_rdp

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