12/11/2011 10:27 am ET | Updated Dec 11, 2011

Mitch McConnell Wants To Call Obama's Bluff On Payroll Tax Cut (VIDEO)

WASHINGTON -- Senate Minority Leader Mitch McConnell suggested Sunday that President Obama was bluffing when he promised to veto an extension of the payroll tax cut if it included a provision that required the construction of the Keystone pipeline.

"Obviously we'll reach an agreement. The president is posturing here," McConnell said. If Obama vetoed the bill, "He'd have to stand up to the AFL-CIO" said McConnell, noting that some labor unions, including the Teamsters, were in favor of the project. "The president's been talking about creating jobs, all it requires is his sign-off."

"It's a shovel-ready project," McConnell added, tweaking the president by employing language the administration had used to justify the 2009 stimulus.

Earlier this week, the number two Republican in the Senate, Jon Kyl (R-Ariz.), said that there would be no further negotiation regarding the payroll tax cut, and that the bill that comes from the House -- which includes Keystone -- is the one the Senate must pass.

"The package that comes from the House is it," Kyl said. McConnell declined to specifically say whether he agreed with Kyl.

McConnell said that a "significant number of Democrats" both in the Senate and House support the package Obama has promised to veto.

Obama halted the Keystone project after an outpouring of opposition from environmentalists. The project would build a pipeline to the Gulf Coast, where much of the energy would be exported.