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Saturday, December 17, 2011

Congress Reaches Deal On Payroll Tax Cut, With Keystone Included

By Susan Duclos

[Update] Senate vote was 89-10 in favor of the bill. (Roll call here)

"Two-month extension, PLUS Keystone. Fully paid for; no tax hikes. Hallelujah."--- GOP Source to Guy Benson, Townhall.

Obama backs away from his veto threat after Republican lawmakers call his bluff and linked the bill that would temporarily extend the payroll tax cut to the Keystone oil sands pipeline, insisting on a speedy decision rather than waiting until after the 2012 elections as Obama previously wanted to do.

“Any effort to try to tie Keystone to the payroll-tax cut, I will reject,” Obama told reporters Wednesday after meeting at the White House with Canadian Prime Minister Stephen Harper.

Keystone is a proposed 1,700 mile oil pipeline which would carry oil from western Canada to Texas Gulf Coast refineries, passing through Montana, South Dakota, Nebraska, Kansas and Oklahoma.

The deal reached between Democratic and Republican lawmakers will extend Social Security payroll tax cuts and jobless benefits for two months while requiring President Barack Obama to accept Republican demands for a swift decision on the fate of an oil pipeline that promises thousands of jobs. (Source- CNBC)

The deal also includes a provision that would give a 60-day reprieve from a scheduled 27 percent cut in the fees paid to doctors who treat Medicare patients.

The problem Obama has with the pipeline is his base is divided, environmentalist which are traditionally Democratic supporters are against it, while some unions, again traditionally Democratic supporters, are for it.

Importantly, Keystone also has bipartisan support as many as 14 Democratic Senators are in favor of it.

The Hill provides quotes some of those Democrats, such as Senate Budget Committee Chairman Kent Conrad (D-N.D.), who states "I personally think the pipeline is absolutely in the national interest. It’ll help us reduce our dependence on foreign energy, at least foreign sources that are hostile to our interests. I, for one, on this side would hope that this could be part of a final package."

Also Senator Mary Landrieu (D-La.) said Thursday "It’s always had more Democratic support than people thought."

Senator Jon Tester (D-Mont.) said on the Senate floor Tuesday: "I am proud to again offer my support for the Keystone XL pipeline and the jobs it will create. We need a quicker decision, based on the merits of this project."

More from The Hill:

Senate Republican aides say Democratic Sens. Claire McCaskill (Mo.), Max Baucus (Mont.), Ben Nelson (Neb.), Mark Begich (Alaska), Joe Manchin (W.Va.), Mark Pryor (Ark.), Kay Hagan (N.C.), Mark Warner (Va.), Debbie Stabenow (Mich.) and Bob Casey (Pa.) also support the Keystone language.

“All the trade unions, everyone’s for it, it creates thousands of jobs,” Manchin said on Fox News earlier this week.

Several Republican senators who are skeptical about the effectiveness of cutting payroll taxes to stimulate the economy say the Keystone pipeline gives them an important reason to vote for it.

Labor leaders have pushed Democratic leaders to concede on the pipeline, which is strongly opposed by environmentalists.

“Throughout America's Heartland, the Keystone Pipeline represents the prospect for 20,000 immediate jobs, and as many as 500,000 indirect jobs via a strong economic multiplier effect,” Mark Ayers, president of the Building and Construction Trades Department of the AFL-CIO, wrote in an opinion piece published by The Huffington Post last month

Obama can still decide against the Keystone pipeline since this bill will prevent him from delaying his decision until after the 2012 Presidential election, but considering the job potential, the support from both sides of the aisle, including unions which are a large Democratic voting bloc, it could be political suicide to bow down to the other portion of his base, the environmentalists.

It is highly doubtful that union workers would run to vote for the Republican candidate in 2012, but highly probable they would be even less enthused about running to booths to vote for Obama and with Republicans already leading in enthusiasm by 61% to 47%, that would not help Democrats in November 2012.

Independents also might not be all that excited to vote for Obama or Democrats if he deliberately kills a proposal that would create thousands upon thousands of jobs.

Allahpundit over at Hot Air gets the last word "Fine — let him make that decision under a media microscope and then spend the next 10 months defending it. Can’t wait for the GOP attack ads showing glum union members sitting around with unused oil equipment."

(Cartoon at the top from Lisa Benson, via Townhall)