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Keystone XL Tax Cut Rider: GOP's Cudgel or Black Eye?

Bungled strategy to fast-track oil sands pipeline likely to give Obama leverage.

Dec 22, 2011
Speaker John Boehner

(Editor's update: On Thursday evening, House Republicans capitulated to mounting pressure from the GOP and President Obama by agreeing to an up-down vote on a measure very similar to the bill the Senate passed last weekend. Briefly, it will allow for a seamless extension of the payroll tax holiday for two months—through February—and still require Obama to give a thumbs up or thumbs down to the controversial Keystone XL pipeline within 60 days.)

WASHINGTON—House Republicans keep trying to give President Obama a political black eye by wielding the 36-inch diameter Keystone XL pipeline as a cudgel just before Christmas.

Instead, they could end up severely maiming only themselves if they persist with end-of-year legislative theatrics at what some are referring to as the "Capitol Hill Playhouse" this week.

"It's quite a sandbox, isn't it?" Pat Parenteau, a Vermont Law School professor who specializes in Congress and environmental issues, told InsideClimate News. "I think their strategy has backfired and that they've roped themselves with this political gambit. This idea that you have to keep introducing ideology into every issue, that will be their undoing."

Parenteau is referring to House Republicans' insistence on gumming up a straightforward bill to extend a payroll tax break for 160 million Americans with language that would force Obama to fast-track approval or denial of the $7 billion, hotly contested pipeline.

At first, Senate Majority Leader Harry Reid, D-Nev., vowed such a proposal would be dead on arrival. And the president—carefully parsing his words—promised to reject it. But that resolve lasted only a few days.

On Saturday, Reid and his fellow senators voted 89-10 to continue the set-to-expire payroll tax cut through February. That compromise gained bipartisan support even though it also gave Obama just 60 days to say yes or no to the 1,702-mile pipeline that could wend its way from the oil sands mines of Alberta to refineries along the Gulf Coast of Texas. Senate leaders assumed the House would follow suit, so both chambers could exit for the holiday break and resume negotiations in January.

Remarkably, Tea Party upstarts in the lower chamber responded by blindsiding House Speaker John Boehner, R-Ohio, over the weekend with a classic snatch-defeat-from-the jaws-of-victory move. On Tuesday, they voted 229-193 not to defeat the bill but to rebuff the Senate. That left Boehner desperately trying to lure departed senators back to Washington to hammer out a deal to stretch the payroll tax cut through the end of 2012.

Reid immediately dismissed that plea.

To save face, many Republicans—including Senate Minority Leader Mitch McConnell, R-Ky.—are now encouraging Boehner to call for an up and down vote on the stopgap measure. They are also prodding Reid to appoint senators to a joint conference committee to handle negotiations when they come back from their holiday break.

Unless Reid bends, Parenteau predicts that House Republicans will ease off on the fulminating and posturing when they realize that disgusted voters are siding with the Democrats and the president on a centerpiece of Obama's jobs package.

"I think they are going to swallow and sign it," he said from his office in South Royalton, Vt. "They will capitulate because they're not going to let these taxes rise in this highly charged political climate. They don't want that hung around their necks."

State Department Balks at Rider Squeeze

Pipeline proponents have been itching to use Keystone XL to bash Obama even before he announced last month that his administration would delay a final decision on the project until after the 2012 presidential election. TransCanada and Nebraska are in the midst of designing a reroute through the Cornhusker State that would avoid the fragile Sandhills and irreplaceable Ogallala Aquifer. State Department officials estimate an environmental analysis of the relocation won't be complete until early 2013.

Rep. Lee Terry of Nebraska and Sen. Richard Lugar of Indiana, both Republicans, have been circulating bills to drastically speed up that schedule. Language from those measures was incorporated into the congressional Keystone XL rider that's now in jeopardy.

But State Department officials have made it clear that they would have to reject the pipeline if Congress insists on setting artificial deadlines.

"Should Congress impose an arbitrary deadline for the permit decision," the State Department wrote in mid-December, "the Department would be unable to make a determination to issue a permit for this project."

When the Keystone XL rider was tacked on to the payroll tax measure, some pipeline opponents worried it would bollix up negotiations for the Nebraska reroute. Others, however, viewed it through the same lens as Democratic Sen. Barbara Boxer.

"By insisting on an expedited review of the Keystone pipeline that will not allow for sufficient consideration of public health and safety concerns, Republicans have effectively killed the project," said the Californian who heads up the Senate Environment and Public Works Committee.

President Has Trump Card

Parenteau doesn't totally agree with Boxer's assessment. But he notes that Obama isn't necessarily boxed in by the 60-day deadline.

"At first, I thought the Republicans were constructing a rope-a-dope strategy, where either way he would alienate a part of his base," he said. Obama would lose union support by killing the pipeline and lose hard-core environmentalists by approving it.

"But now I think he has a trump card to play," Parenteau added.

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