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US Republicans tap pipeline feud for tax dispute
by Staff Writers
Washington (AFP) Dec 8, 2011

Top US Republican lawmakers on Thursday tied extending a payroll tax cut, as sought by President Barack Obama, to his prompt approval of the controversial US-Canada pipeline known as Keystone XL.

"The president says that the American people can't wait on jobs. Well, guess what? We agree wholeheartedly with the president," Republican House Speaker John Boehner told reporters. "This is a no-brainer."

Obama has vowed to veto any legislation tying the payroll tax cut extension he says is needed to avert a tax hike on middle-class Americans to the pipeline, which he has delayed until after the November 2012 elections.

The president and his Republican foes have been battling over the best way to revive the ailing US economy, the top issue on voters' minds amid historically high unemployment and fears Europe's debt crisis could reach into US markets.

"The Keystone Pipeline project will put tens of thousands of Americans to work immediately. It has bipartisan support in the House and the Senate," said Boehner, who indicated lawmakers would vote on the measure next week.

The House Republican bill would also extend unemployment benefits -- though by less than the White House wants, increasing the likelihood that it would die in the Democratic-held Senate even if divided Republicans rally behind it.

"While I don't do vote totals," Boehner said, "I feel confident about our ability to move ahead."

Democrats and Republicans are generally in agreement on passing an extension to a cut in payroll taxes that fund the social security retirement system, but are far apart on exactly how to pay for the reductions.

Democrats want to hike income taxes on the richest Americans but Republicans are calling for a freeze in hiring of federal workers and oppose more burdens on wealthy citizens who they say create jobs.

Obama says the plans will offer working Americans a $1,500 pay rise next year, and warn everyone will pay an extra $1,000 in taxes if the extension is not passed.

Supporters of the pipeline say the plan to bring oil from Canada's tar sands to the United States is the ultimate shovel-ready job creation project and could spur the hiring of thousands of workers.

Environmental activists fear an accident along the 1,700-mile (2,700-kilometer) pipeline extension would be disastrous for aquifers in central US Great Plains states.

Others oppose the multibillion-dollar project because exploiting the tar sands requires energy that generates a large volume of greenhouse gases that scientists blame for global warming.

The Obama administration has ordered an extra environmental assessment of a possible new route through Nebraska, which could delay a final decision until after next November's election.

That move prompted Obama's opponents to accuse him of dodging a difficult issue to avoid angering sections of his Democratic political base.

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Oil industry says crude far from depleted
Doha (AFP) Dec 8, 2011
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