2. OIL AND GAS:
Obama threatens to veto House bid to spur Keystone XL
Published:
The White House threatened today to veto a House payroll tax extension plan that is poised for passage tonight, warning its spending cuts -- including a federal pay freeze -- "would inevitably lead to pressure" for green energy spending cuts without specifically citing two environmental policy riders attached to the bill.
The statement of administration policy from the Office of Management and Budget blasts House GOP leaders for crafting the bill to "introduce ideological issues into what should be a simple debate about cutting taxes for the middle class."
That phrase appears to refer to provisions forcing a ruling on the Keystone XL oil pipeline and blocking U.S. EPA rules for industrial boiler emissions, both of which were added to the tax bill to court conservative support, but Senate Minority Leader Mitch McConnell (R-Ky.) noted today that neither rider was mentioned by name in the veto threat.
The House payroll tax bill should get a vote in the Senate, McConnell added, predicting to reporters that upward of five Democrats "who are in the path of the pipeline, plus others who've said this is important," could vote for it.
Yet no red-state Democratic senator has publicly embraced the House bill's language fast-tracking the Canada-to-U.S. XL line, which senior Democrats and environmentalists lambaste as a spur for continued domestic consumption of emissions-intensive oil sands crude. Sens. Ben Nelson (D-Neb.) and Jon Tester (D-Mont.), who both hail the project's job-creation potential, indicated yesterday they would support seeing the pipeline's current review at the State Department run its course through 2013.
Partisan maneuvering over the legislation is reaching a fever pitch today, as Senate Majority Leader Harry Reid (D-Nev.) seeks to hold off on considering a sprawling year-end government funding bill until House Republican leaders agree to engage on a compromise payroll tax bill without the pipeline and boiler riders (see related story).
In addition to the Keystone XL and boiler provisions, the House GOP payroll tax bill would re-up unemployment insurance (UI) benefits sought by the White House. The legislation's cost would be partially offset by a federal pay freeze.
Federal employees may see a silver lining to the White House's veto threat, in which the administration pointed to the reduced spending limits in the House GOP proposal. The White House contends that lowering those caps -- partly through a federal pay freeze -- violates the August debt ceiling deal.
Indeed, some lawmakers were hoping to draw on a pay freeze and retirement restructuring to meet the spending cuts required under the Budget Control Act. Today, Sen. Joe Lieberman (I-Conn.) -- who in the past has voiced support for some of the provisions now in the GOP bill -- said he would "hate to see it used now."
"I wish we'd wait and try to get it in a debt reduction program," he said.
But Reid criticized the double-whammy of the GOP proposal, which would not only freeze salaries through 2013 but also more than double employees' contributions to their pensions.
When asked whether the pay freeze may be part of a compromise, he said no. Budget Chairman Kent Conrad (D-N.D.) echoed those sentiments.
"I think there needs to be a much broader base of pay-fors than just targeting federal employees," he said.
But Sen. Tom Carper (D-Del.) said everything is up for debate.
"It's on the table," Carper said. "It's something we'll debate with them and discuss with them."
Click here to read the statement of administration policy on the payroll tax bill, with its Keystone XL and Boiler MACT language.
Reporter Emily Yehle contributed.