House Republicans this week are rolling toward a new high-stakes confrontation with President Obama over a bid to link fast-tracked approval of the Keystone XL oil pipeline and a slowdown in U.S. EPA rules for industrial boilers to a White House-backed economic aid package.

The dynamics of the latest partisan standoff resemble those that drove the government to the brink of a shutdown in April and again in September. In both cases, Republicans seeking leverage over a president whose environmental policies they lambaste as a drag on the economy are aiming to link regulatory easing language to legislation that Democratic leaders view as must-pass.

In the case of the payroll tax cuts, as with the earlier government-funding fights, the crucial question is whether the White House or House Republicans will blink first. The GOP could clear an extension of the Social Security tax relief and unemployment insurance (UI) benefits by stripping the energy provisions to win Democratic votes, but many Republicans do not view the tax cuts as economically beneficial and could be willing to pay the political price for letting them expire.

Obama, for his part, bolstered Democratic confidence in pushing back at the Keystone XL provision by blasting it at a news conference last week. The president "has said he will veto it," House Minority Leader Nancy Pelosi (D-Calif.) told reporters Thursday. "It is a nonstarter."

But Republicans appear to be betting that Obama might budge on what was in fact a less-than-full veto threat.

"I don't expect to have to veto it," the president told reporters, holding out hope that the GOP would pursue a clean payroll tax-cut and UI extension (E&ENews PM, Dec. 7).

"The president says he'll veto this," Sen. Mike Johanns (R-Neb.), a critic-turned-backer of Keystone XL following a rerouting compromise in his home state, said last week. "I'm not sure if he will or he won't."

Bolstering Republicans' case are the 47 House Democrats who voted alongside them in favor of a July plan to force a State Department approval of Keystone XL within 60 days. Those members of Obama's party may now see their votes considered in play for the new tax package, despite Senate Majority Leader Harry Reid's (D-Nev.) avowal Friday that it would have no future in his chamber (E&ENews PM, Dec. 9).

Reid's House counterpart, Minority Leader Nancy Pelosi (D-Calif.), echoed that criticism Friday, telling reporters that the pipeline provision is "a poison pill designed to sink the payroll tax cut." Pelosi also dismissed the prospect that Obama's remarks last week stopped short of a full veto threat.

Senate Environment and Public Works Chairwoman Barbara Boxer of California was among the senior Democrats calling on the House GOP on Friday to drop both the boiler MACT and Keystone XL provisions from their tax-cut extension plan.

"If there is one thing all Americans are united on it is their negative feelings about attaching unrelated matters to must-pass legislation that is needed to protect the economy," Boxer said in a statement. "The House Republicans need to acknowledge that they should be serving the people, not the polluters."

The House GOP payroll tax plan, set for Rules Committee consideration today, also includes a pay freeze for federal workers through fiscal 2013. Its Keystone XL language does not shift jurisdiction over a permit for the pipeline from State to the Federal Energy Regulatory Commission, as Rep. Lee Terry (R-Neb.) formally proposed in separate legislation offered earlier this month (E&E Daily, Dec. 1).

That Terry legislation has already received a hearing in the Energy and Commerce Committee. A competing version from Rep. Denny Rehberg (R-Mont.) that would also keep State in charge of a fast-tracked permit for the pipeline is also moving forward with two subpanels of the House Foreign Affairs Committee set to mark it up Thursday.

Schedule: The Rules Committee meeting on the House GOP payroll tax bill is today at 5 p.m. in H-313, Capitol building.

Schedule: The Terrorism, Nonproliferation, and Trade subpanel markup of Rehberg's Keystone XL bill is Thursday at 9:30 a.m. in 2172 Rayburn.

Schedule: The Western Hemisphere subpanel markup of Rehberg's Keystone XL bill is Thursday at 11 a.m. in 2172 Rayburn.