Senate payroll tax deal requires quick Keystone pipeline choice from Obama

The Senate is slated to vote Saturday on a payroll tax cut extension package that would require a speedy decision from the White House on the proposed Keystone XL pipeline.

The package includes a measure proposed by Sen. Dick Lugar (R-Ind.) that would require President Obama to make a decision within 60 days on the controversial project, which would carry oil sands crude from Alberta to refineries on the Gulf coast. The language allows Obama to reject the project if he determines that it is not in the national interest.

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Republicans lobbied aggressively in recent days for inclusion of the Keystone language, which passed the House earlier this week in a previous version of the payroll tax extension package.

While the Keystone measure does not force Obama to approve the pipeline, it puts the White House in a politically tenuous position.

The administration announced earlier this year that it would delay a final decision on the project until 2013, after the presidential election. Under the Senate's deal, Obama would be forced to decide in the coming months.

The project splits Obama’s key supporters going into the election. While environmental groups strongly oppose the project, some unions have advocated for swift approval.

The package tentatively agreed to by Senate leaders would extend the payroll tax cut for two months. (Read more about the agreement here.)

Senate Democrats and the Obama administration said that the House-passed language will in effect kill the pipeline project.


Environmental groups blasted the package Friday over the Keystone language.

“The Grand Oil Party is stooping to a new low today. Millions of struggling American workers and families are depending on these critical tax cuts to help them through the New Year, and this ploy by Big Oil's cronies in the House is an insult against working families,” the Sierra Club, Natural Resources Defense Council, Labor Network for Sustainability and Public Citizen said in a joint statement.

The groups called on the State Department to reject the pipeline if the package is approved, arguing they won’t have time to adequately review the project.

Lugar, the author of the Keystone language, praised the move.

“This bill will stop President Obama’s delaying tactics. This is a tremendous victory for our security and for creating jobs. It is absolutely incredible that President Obama wants to delay a decision until after the 2012 elections apparently in fear of offending a part of his political base and even risking the ire of construction unions who strongly support the project. It is the largest shovel-ready infrastructure project in the United States,” Lugar said in a statement.