GOP embraces showdown over oil pipeline, tax cuts

By Matthew Daly

Associated Press

Published: Tuesday, Dec. 13 2011 12:00 a.m. MST

Speaker of the House John Boehner, R-Ohio, speaks to reporters at the Capitol in Washington, Monday, Dec. 12, 2011. A crucial vote is scheduled in the House Tuesday on a GOP effort to back an extension of the payroll-tax cut and other measures including an provision to speed approval on the Keystone XL oil sands pipeline.

J. Scott Applewhite, Associated Press

Enlarge photo»

WASHINGTON — Sensing a political opening, congressional Republicans are moving toward a high-stakes showdown with President Barack Obama over a plan to link fast-tracked approval of an oil pipeline to a measure renewing a payroll tax cut.

Senate Minority Leader Mitch McConnell, R-Ky., said the proposed Keystone XL pipeline from Canada to Texas will help the president achieve his top priority — creating jobs — without costing a dime of taxpayer money.

"There is no reason this legislation shouldn't have the president's enthusiastic support," McConnell said Monday on the Senate floor. "The only reason for Democrats to oppose this job-creating bill would be to gain some political advantage at a time when every one of them says job creation is a top priority."

The State Department said last month it was postponing a decision on the pipeline until after next year's election. Officials said the delay is needed to study routes that avoid environmentally sensitive areas of Nebraska.

The GOP language would require approval of the pipeline within two months unless Obama declares it is not in the national interest.

The project's developer, Calgary-based TransCanada, says the pipeline could create as many as 20,000 jobs, including 13,000 during construction and 7,000 manufacturing jobs.

Opponents call those figures wildly inflated and say the project could create as few as 2,500 construction job and fewer than 1,000 permanent jobs. The State Department, in an analysis released this summer, said the pipeline would create up to 6,000 jobs during construction, including Keystone employees, contractors and construction and environmental inspection staff.

The State Department has authority over the project because it crosses an international border.

President Barack Obama said Tuesday he would veto the bill if it includes the Keystone provision.

The administration warned Monday that congressional interference in the approval process would likely lead to a rejection of the pipeline.

"Should Congress impose an arbitrary deadline for the permit decision, its actions would not only compromise the process, it would prohibit the department from acting consistently with National Environmental Policy Act requirements by not allowing sufficient time" for the project to be considered, the State Department said in a statement.

In that case, "the department would be unable to make a determination to issue a permit for this project," the statement added.

McConnell and other Republicans dismiss such procedural objections.

"The only thing arbitrary about this decision is the decision by the president to say, 'Well, let's wait until after the next election,'" said House Speaker John Boehner, R-Ohio.

Boehner and other Republicans say many Democrats support the pipeline, noting that 47 House Democrats voted in a favor a bill this summer to speed up the permitting process. GOP lawmakers say the White House opposes the pipeline provision in the tax bill so Democrats can gain political advantage by blaming Republicans for defeating the popular payroll tax cut. The tax bill is expected on the House floor Tuesday.

The two parties generally agree on the bill's fundamentals: preventing the Jan. 1 expiration of payroll tax cuts and extending coverage for the long-term unemployed. Obama has said he will reject the overall bill if it includes language speeding up approval of the Keystone XL pipeline, which would carry oil from western Canada to refineries in Texas.

Obama's veto threat has increased conservative support for the overall measure, with Republicans hoping to use Obama's opposition to portray him as favoring environmentalists over jobs.

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