Keystone Cops


The Keystone pipeline as been in the headlines lately as part of the “bargain” that the Republican Senators struck to pass an extension of the payroll tax holiday, unemployment benefits, and the current level of Medicare payments for physicians.

The Keystone pipeline is a project intended to cary crude oil extracted from tar sands in Canada to oil refineries in Texas.

The reason that the pipeline has been delayed is because it’s initial construction path took it through environmentally sensitive areas in Nebraska. Specifically, any oil spill in that area would threaten one of the largest supplies of underground water in the country. This aquifer supplies water to much of the upper Midwest.

Here’s what said about the current status.

The president issued a statement supporting the delay, which the State Department announced Nov. 10, citing the need for an “in-depth assessment of potential alternative routes in Nebraska.” On Nov. 14 the developer announced it would change the route of the pipeline to avoid Nebraska’s sensitive Sandhills area, and said it was confident the project would ultimately be approved. On Nov. 15, Nebraska Gov. Dave Heineman (a Republican) praised the State Department’s action and called the re-routing a “common sense solution.”

The Nebraska governor recently signed two bills that enacted the compromise agreed upon with the pipeline builder to move the route, and approved up to $2 million in state funding for an environmental study of alternate routes.

So what is it that the Republicans want?

There is a deal in place with the Republican governor of Nebraska to find a route that doesn’t put the Ogallala Aquifer at risk. Nebraska has agreed to foot the bill for the study. The pipeline company has agreed to change the route pending the outcome of the study. The study of alternate routes should take about a year.

It appears that the Republicans are attempting to force President Obama into a public declaration of his position on this project. If he approves the project, he will upset environmentalists. If he cancels the project he will upset economic voters who are interested in jobs growth. Right now he can remain on the fence and I think has a strong defense for letting Nebraska work this out.

The President has already said publicly that he would veto any legislation requiring him to approve the Keystone pipeline project before the planned environmental study is done. The current proposed language in the payroll tax extension passed by the Senate gives him an easy out. He simply has to declare that it is not in the national interest to approve the project today.

I think that this proves how desperate the Republicans are becoming to develop substantive issues that they can use in the 2012 election.

Paul Begala recently published an interesting analysis in Newsweek.

 I cannot think of a time when the economy declined but the president was not blamed—but this may be the first. If the Republicans were smart, they would do on taxes what they did on trade: quietly pass Obama’s proposals, knowing full well that even a million new jobs will not be enough to climb out of the hole Obama inherited. (Fourteen million Americans are unemployed.) The economy isn’t giving Obama enough jobs, but the Republicans are giving him the next best thing: a villain to blame for the poor economy. By killing Obama’s jobs agenda, Republicans may just save his presidency.

It will be interesting to see how this plays out, but so far the Obama team seems to be winning the tactical narrative battle. On the issue of jobs, the country wants the government to take action to create them. This is counter to the Republican claim that only private industry can create jobs. The country also appears perfectly fine with the concept that higher taxes on those making more than $1M a year should fund an expanded government jobs program. This is counter to the Republican claim that higher taxes on the rich will increase unemployment.

In this most recent payroll tax extension, for example, Obama successfully positioned himself as a supporter of tax cuts for the working man while Republicans were forced to oppose that tax cut if it meant raising taxes on the rich.

I think that this is going to be drumbeat from here through the election next year. Obama will continue to position Republicans as defenders of the rich and the status quo. He is certainly vulnerable to the attack that he is shirking his own responsibility for the past four years of economic pain, but as Paul Begala has pointed out, so far he has been successful in forcing the Republican party into positions where their actions confirm Obama’s narrative that they are the real villains.

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