House passes tax bill with pipeline provision, fueling clash on spending

Source: Elana Schor • E&E • Posted: Wednesday, December 14, 2011

The House GOP last night edged closer to an explosive end-of-year standoff with Senate Democrats and the White House as it approved a tax-cut package that includes speedy approval of the politically volatile Keystone XL oil pipeline and a rollback of U.S. EPA’s boiler emissions limits.

The comfortable 234-193 margin of victory for Republicans’ payroll tax extension measure, backed by 10 Democrats, belied the arduous battle facing leaders of both parties as they reach for a deal that can satisfy conservatives eager to hamstring President Obama’s environmental policies, liberals seeking a clear path for that agenda and appropriators eager to pass their 2012 spending bill.

That bipartisan omnibus appropriations plan saw its fate tied to the payroll tax and unemployment insurance (UI) bill yesterday, as Senate Democrats withheld their seal of approval for the spending deal to prevent Republicans from adjourning for the year and forcing them to accept provisions fast-tracking the XL line and halting EPA’s so-called boiler MACT rule (Greenwire, Dec. 13).

The omnibus “is not derailed but on a side track right now,” Rep. Jim Moran, the House Democrats’ top appropriator for EPA and the Interior Department, said last night. Earlier yesterday, the Virginian had raised alarms about the strategy to link the omnibus deal — which would give EPA more funding than a continuing resolution (CR) at 2011 levels — to the mercurial politics of the payroll tax fight.

Senate Majority Leader Harry Reid’s (D-Nev.) slowdown of the omnibus is “a little too cute by half,” Moran said, warning that his party’s upper-chamber leader “might lose the whole ball of wax” if he holds up the spending deal for too long. “Payroll tax cuts should be separate from appropriations.”

On that front, at least, House Speaker John Boehner (R-Ohio) agreed. Lamenting that it is “outrageous that Democrats have not signed” the final omnibus deal, Boehner urged the Senate to consider his conference’s payroll tax bill to kickstart negotiations. Upper-chamber Democratic aides promptly pushed for a Senate vote on the House bill late last night and charged Republicans with blocking one.

But the White House made clear last night that it stood behind the conjoinment of the payroll tax-UI fight and the omnibus bill. It would be “simply inexcusable” for lawmakers to “go on vacation before agreeing to prevent a tax hike on 160 million Americans and extending unemployment insurance,” Obama spokesman Jay Carney said in a statement after the House vote.

“It is our expectation that in the eleventh hour Congressional Republicans and Democrats will come to an agreement to protect the middle class and finish their budget work for the year.

Rep. Stephen LaTourette (R-Ohio), a Boehner ally and appropriator, said he expected two votes on the payroll tax and associated energy issues this week. “Today’s vote, and we’re looking at a vote later this week or next week on whatever the Senate comes up with,” LaTourette said. “And that’s what we call legislating.

Amid the slowly slipping veil of secrecy shrouding the omnibus pact, described by Democrats as containing few major GOP riders restricting EPA and Interior policymaking, the payroll tax fight and its linked environmental policy limits gave both parties and their allies an opening to throw rhetorical jabs at the opposition.

Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) held an event with public health advocates yesterday vowing to defend major environmental statutes that she accused the GOP of undercutting: “We’re not going to allow them to be killed under our watch, we’re not going to allow them to be weakened under our watch and we’re not going to allow them to be subverted under our watch.”

House Energy and Commerce Chairman Fred Upton (R-Mich.) focused his floor remarks on the economic and energy-security upsides of the $7 billion Keystone XL line and its near-doubling of U.S. import capacity for Canadian oil sands crude.

“Canada is going to develop this no matter what and that oil is either going to come, a million barrels a day, to the United States, or it’s going to go to a place like China,” Upton said, echoing arguments Republicans on his panel made for months before the Obama administration delayed its review of the project last month. “We want [the oil] here.”

Similarly, interest groups on opposite sides of the debates over Keystone XL and the EPA boiler rule yesterday clamored to support their allies’ agenda.

Natural Resources Defense Council legislative director Scott Slesinger, among many environmentalists who blast the XL line as a harmful incentive for more U.S. consumption of a greenhouse-gas intensive fuel, slammed Republicans for “bowing to tea party ideologues who would put corporate polluters — instead of scientists — in charge of making decisions that affect our health and environment.”

Tom Pyle, president of the oil industry-backed Institute for Energy Research, weighed in to urge Senate passage of the House proposal. “The American people have a right to know why their government would rather send jobs and money to unstable oil regimes than to increase trade with our closest North American ally and create good-paying American jobs,” Pyle said in a statement, referring to the bill’s provision setting a 60-day window for approval of Keystone XL.

As the standoff continued, lawmakers began to confront the need for a fresh CR to keep the government from shutting down when current federal funding expires Friday.

“What this is really about is the brinksmanship that goes on that makes the American people think less of us,” Sen. John McCain (R-Ariz.) told reporters today. “It’s all kabuki theater, and when 11:59 rolls around we’ll have an agreement.”

Asked about the chances of a shutdown come Friday at midnight, McCain held up his hand to form a round zero.

The Democrats voting for the House GOP’s payroll tax-UI bill were Reps. John Barrow of Georgia; Dan Boren of Oklahoma; Tim Walz of Minnesota; Bruce Braley, Leonard Boswell and Dave Loebsack of Iowa; Mike Ross of Arkansas; Dennis Cardoza of California; Joe Donnelly of Indiana; and Jim Matheson of Utah. Fourteen Republicans voted no, largely out of opposition to the payroll tax and UI extensions.