Democrats warn against tying Keystone XL to payroll tax cut extension

Senate Democrats are blasting a House Republican plan to link swift approval of the controversial Keystone XL pipeline with legislation to extend payroll tax breaks.

In a letter to Senate Majority Leader Harry Reid, D-Nev., five Democrats called the GOP tactic “completely inappropriate.”

“Based on our serious concerns about this pipeline project and the very real need to further examine its impacts, we strongly oppose the inclusion of provisions that require approval of this pipeline in an arbitrary timeframe in any legislative package moving forward in the Senate,” the group said.

The missive was spearheaded by Sen. Bernie Sanders, an independent from Vermont who caucuses with Democrats. The other four letter authors were Sens. Ron Wyden of Oregon, Sheldon Whitehouse of Rhode Island, Patrick Leahy of Vermont and Frank Lautenberg of New Jersey.

House Speaker John Boehner, R-Ohio, floated the idea of tying Keystone XL to a payroll tax cut bill last week in a bid to win over fiscal conservatives who are wary of the tax package but support the proposed 1,700-mile pipeline.

The strategy also could give a boost to the pipeline measure, by giving it a chance of passage in the Senate on the back of a tax package popular with Democrats in that chamber.

The Obama administration’s State Department recently decided to delay a final verdict on whether the $7 billion project is in the national interest until early 2013, enough time to conduct an environmental analysis of an alternative route being considered by TransCanada and Nebraska policymakers.

The Republican pipeline bill would strip President Barack Obama and his State Department of the power to permit or reject the project and instead put that decision in the hands of the Federal Energy Regulatory Commission.

The measure would give the independent agency 30 days to issue an initial permit for TransCanada’s proposed pipeline, except in some limited instances. FERC also would have 30 days to approve any new pipeline route designed to navigate around environmentally sensitive areas in Nebraska once the agency concludes an environmental review of the alternative path.

The Democratic senators who wrote Reid insisted that the GOP proposal amounted to “a legislative rubber stamp approval for the Keystone XL pipeline,” because it would “eliminate (a) supplemental environmental study, require approval of the project within an arbitrary 30-day time frame and shift the approval authority to the Federal Energy Regulatory Commission.”

The letter was delivered late Tuesday, on the eve of a meeting between Obama and Canadian Prime Minister Stephen Harper at which the pipeline was expected to come up.

The proposed Keystone XL pipeline would link oil sands development in Alberta, Canada with a key pipeline terminal at Cushing, Okla. From there, it would run to Gulf Coast refineries.

Pipeline proponents say it would allow the U.S. to get more of the oil it needs from a friendly North American ally instead of the Middle East, while simultaneously providing new transportation opportunities for currently land-locked oil produced in western states.

Environmentalists argue the pipeline would expand the marketplace and demand for oil sands crude that produces more greenhouse gas emissions over its entire life cycle — from production to combustion — than alternatives.

Environmental activists who oppose the pipeline were protesting outside the Canadian embassy in Washington, D.C.

In a joint statement today, American Petroleum Institute President Jack Gerard and Mark Ayers, the head of the AFL-CIO’s Building and Construction Trades Department, stressed that the U.S. and Canada would both benefit from the pipeline’s construction.

“The United States and Canada share the strongest partnership between any two nations in the world,” Gerard and Ayers said. “The Keystone XL pipeline would not only benefit from that history of collaboration but also strengthen it by allowing us to share our energy resources in a more effective, efficient and environmentally sound manner.”

On the Senate floor today, Minority Leader Mitch McConnell, R-Ky., accused Obama of delaying “the single greatest shovel-ready project in America” for political reasons.

Other Republicans also heaped criticism on the administration today.

Sen. John Cornyn, R-Texas, insisted that it “defies common sense” for Obama to “kick the decision until after the election . . . at a time when unemployment remains high and many of his political supporters — organized labor to be sure — say they want him to approve this project and they want these jobs created now.”

Cornyn said he backed the House GOP plan to bundle the pipeline bill with a payroll tax holiday bill and an extension of unemployment insurance benefits, especially with just a few weeks remaining on the calendar before lawmakers head home for holiday recess.

“It would be important, if those are going to pass, to package them with things that are actually going to create jobs and deliver energy that we sorely need in the United States,” Cornyn said.

Update: President Barack Obama today threatened to veto any legislation that links speedy approval of the controversial Keystone XL pipeline to a payroll tax cut extension.

“Any effort to try to tie Keystone to the payroll tax cut I will reject,” Obama said after meeting with Canadian Prime Minister Stephen Harper. “Everybody should be on notice.”

“The payroll tax cut is something that House Republicans — as well as Senate Republicans — should want to do regardless of any other issues,” Obama added.

Letter to Majority Leader Reid on Keystone XL