In case you do not immediately associate payroll taxes with transcontinental pipelines, allow me to connect the dots. They are connected in Congress with language designed to force the Obama White House to approve the controversial Keystone XL pipeline project within a 60-day time frame. The project is a poker chip being played by Republicans in the name of jobs and economic stimulation. The question is whether or not the pipeline is in the national interest. The national interest is a card the president is holding to his chest.
“We will make changes,” Speaker Boehner said of the payroll tax cut bill. “I will guarantee you the Keystone pipeline will be in the bill when it goes back to the Senate.” At that the Speaker is true to his word. The House passed its version of the bill. So did the Senate. Senate Minority Leader Mitch McConnell said the Senate requires Obama to grant a permit for the Keystone pipeline unless he determines that the project is not in the national interest. The Republican controlled House must now sign off on the Senate plan.
Last week President Obama said that he would reject “any effort” to tie the tax cut to the pipeline project. It is unlikely that the State Department can complete the necessary reviews in 60 days. If forced to do so, the department indicated it would reject the project by not granting the requisite Presidential Permits. Such permits are required because the pipeline project crosses the US border.
The Keystone pipeline deal is between the Canadian company TransCanada and ConocoPhillips. ConocoPhillips, headquartered in Houston, Texas, is the second-largest refiner in the United States and is the world’s fourth largest non-government controlled refiner. The nearly 2-thousand mile pipeline would transect Montana, South Dakota, Nebraska, Kansas and Oklahoma to its refineries in Texas.
The Republican argument is that the project would produce jobs and money. TransCanada says that the project would create 20-thousand jobs in the United States. However, the State Department concludes that the real number may be closer to 6000 jobs. An independent study conducted by Cornell University finds that while Keystone XL might result in no more than 4700 temporary construction jobs, that number would be reduced by higher oil prices in the Midwest resulting in reduced national employment.