2. CONGRESS:

House vote puts Senate GOP's pipeline push in limbo

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Republican plans to prod President Obama into a quick ruling on the controversial Keystone XL oil pipeline stalled today, caught in a clash over a White House-backed tax cut that has left Congress in a temporary, uneasy state of adjournment.

After weeks of rising to the top of the Republican energy agenda, the $7 billion Canada-to-U.S. pipeline became a footnote to House leaders' push for a yearlong extension of a payroll tax cut prized by Obama. Speaker John Boehner (R-Ohio) vowed Friday that he would attach language fast-tracking Keystone XL to any Senate-passed stopgap tax-cut bill, but the inclusion of that pipeline plan ultimately failed to persuade his conference to back the upper chamber's measure.

The House voted 229-193 to go to conference with the Senate on its two-month payroll tax-cut extension, with seven Republicans joining every Democrat in a vote to accept the stopgap plan and its 60-day window for an Obama decision on the pipeline. As Democrats savaged them for declining to call an up-or-down vote on the Senate bill, House Republicans insisted that they would hold out for payroll tax talks over Christmas week.

Most rank-and-file members are leaving Washington today, but "our negotiators are here, ready and able to work," Boehner told reporters, putting the onus back on Obama to coax Senate Majority Leader Harry Reid (D-Nev.) back to the table.

Reid reiterated today that he had no such plans, inviting Republicans to a political standoff that Obama's party is increasingly confident it can win. "I am happy to continue negotiations on a yearlong deal," he said in a statement, "as soon as" the House passed the stopgap bill that cleared the Senate with 89 votes Saturday.

As the flurry of partisan finger-pointing came to an end, few if any Republicans talked up the Keystone XL provision that Senate Minority Leader Mitch McConnell (R-Ky.) and his conference hailed upon Democrats' concession to it late Friday (E&ENews PM, Dec. 16). Sen. Richard Lugar (R-Ind.), sponsor of the language that would require Obama's State Department to decide on a permit for the 1,700-mile pipeline, yesterday urged Boehner to take up the upper-chamber's bill to no avail.

Asked if his pipeline victory could sink amid House Republican resistance, Lugar told MSNBC yesterday: "I'm very hopeful that that will not occur. I'm hopeful, maybe without basis, the House of Representatives will pass the bill the Senate passed."

Democrats also sought to use the House vote as a boost to Sen. Jon Tester's (D-Mont.) re-election bid against Rep. Denny Rehberg (R-Mont.). Both Montanans support Keystone XL, which environmentalists oppose out of concern for the emissions generated by the oil sands crude it would carry, but Rehberg joined his party leaders today in voting down the Senate bill with Lugar's language attached.

"After accusing some of opposing the Keystone XL pipeline, Congressman Rehberg is now irresponsibly and hypocritically opposing Keystone XL only days after launching those attacks," said Ted Dick, executive director of the Montana Democratic Party, in a statement.

Rehberg fired back, noting that both the House and Senate have passed versions of the pipeline-expediting language that he sponsored in the lower chamber.

"Even while important differences remain in the underlying legislation, one thing most in Congress seem to agree on is that we must move my Keystone XL language forward," the Republican said in a statement.

In limbo

Lugar's prediction that the House would pass the Senate's payroll tax bill could yet come to pass before the lower Social Security tax rate expires on Dec. 31, but House Republicans gave no indication today that they would blink before 2012.

Majority Leader Eric Cantor's (R-Va.) office notified lawmakers that "the House will be in session as necessary to consider a conference report" on the payroll tax-pipeline bill, which is being officially sent back to the Senate for appointment of its conferees.

The Keystone XL provision would come back to life if the House GOP accedes to pass the Senate plan or if Reid agrees to a deal with Republicans such as Rehberg who are intent on keeping the pipeline language alive.

But in the event that neither side gives in before the tax cut expires -- effectively betting on political opponents to pay the price for any resulting public backlash -- oil industry and labor union supporters of the project would remain in limbo until next year.