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Posted at 01:48 PM ET, 12/16/2011

Keystone pipeline emerges as main sticking point in payroll tax talks

The endgame of congressional talks aimed at a deal on extending the payroll tax cut came into clearer focus Friday as lawmakers narrowed their sights on a measure that would force a decision on the Keystone XL oil sands pipeline. It’s a provision that Republicans have insisted must be part of a final deal but which the White House has said it would reject.


House Speaker John Boehner (R-Ohio) and Senate Minority Leader Mitch McConnell (R-Ky.). (Karen Bleier/AFP/Getty Images)

Hours after House Speaker John Boehner (R-Ohio) told Republican rank-and-file members in a closed-door meeting that he would continue to press for the House-passed pipeline provision to be part of the payroll tax package, Senate Minority Leader Mitch McConnell (R-Ky.) said that he would not back any deal that doesn’t include the measure.

“The House of Representatives has been quite clear that they’re not going to support a package that does not include the pipeline,” McConnell said in remarks on the Senate floor. “Frankly, I will not be able to support a package that doesn’t include the pipeline.”

McConnell cited remarks by several congressional Democrats in favor of the pipeline and called it “an opportunity for the president to say he’s not going to let a few radical environmentalists stand in the way of a project that would create thousands of jobs and make America more secure at the same time.”

Another top Senate Republican tweeted Friday afternoon that Keystone must be included in the deal.

“Keystone XL pipeline WILL be part of final tax package,” Sen. John Cornyn (R-Texas), the chairman of the National Republican Senatorial Committee, said via Twitter.

McConnell and Senate Majority Leader Harry Reid (D-Nev.) were holding talks Friday to work on the details of a package that would include an extension of the one-year payroll tax cut, unemployment benefits and the “doc fix,” which is typically renewed by Congress and would prevent a drop in reimbursements for doctors who see Medicare patients.

Boehner earlier Friday addressed speculation that a two-month deal on extending those provisions past their Dec. 31 expiration date might be in the works, telling reporters that if such a short-term package were to reach the House, the chamber would amend it to include the Keystone provision.

But by Friday afternoon, the chances of a short-term extension appeared to wane as rank-and-file House members of both parties indicated that they would not back such a move.

“The conference won’t [support it],” Rep. Mike Simpson (R-Idaho) said of a two-month deal. “We need to resolve this.”

Rep. Steven C. LaTourette (R-Ohio), too, said that the current impasse “needs to be solved.”

“That’s what it looks like to me -- it’d look like we couldn’t do anything so we just kicked the can down the road to February,” he said.

On the Democratic side, Rep. Gerald E. Connolly (D-Va.) said he would find a short-term extension distasteful.

“We’ve got to decide this -- and we should not leave until we do,” he said.

House Minority Leader Nancy Pelosi (D-Calif.) declined to comment on the payroll tax negotiations until Reid and McConnell announce a deal.

”Right now, the two leaders in the Senate -- Majority Leader Reid and Minority Leader McConnell -- are working on what that bill might look like,” Pelosi said. “When we see it, I’ll have a comment on it. I had hoped that it would be finished around now so that we could be written up and voted upon one way or another tomorrow. But, again, until I see the bill I’m not going to comment on it.”

Connolly said that he believes Republican estimates of jobs that could be created by the Keystone project have been inflated. He added that he’s troubled by refusal to add amendments requiring that oil pumped through the pipeline remain in the U.S. for domestic consumption, rather than be shipped overseas.

But he also suggested that Democrats may have to accept the language, given that it puts the onus for a final call on the project to their own president.

“The whole premise of the pipeline is false and deliberately so,” he said. “It’s a high price, but it may be the price to get on with the payroll tax, the employment insurance and the SGR doc fix. Those are very important issues that we’ve got to address before we leave here.”

He called the Keystone debate an example of Republican “hostage-taking.”

“I just think it is absolutely toxic to our politics. It’s not how we ought to be doing business,” he said.

This story has been updated.

By and  |  01:48 PM ET, 12/16/2011

 
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