Topic: US House Links Payroll Tax Extension to Keystone Pipeline

[Rifleman62]

........government encouraged the build

can be without taxpayers dollars i.e expedite environmental studies.

[Thucydides]

In the end, the Republicans called his bluff:

http://thehill.com/homenews/administration/200125-keystone-climbdown-leaves-obama-supporters-scratching-heads

Keystone climbdown leaves Obama supporters scratching their heads
By Amie Parnes    - 12/17/11 06:54 PM ET

President Obama put two conditions in end-game talks on extending the payroll tax holiday.

He wanted to pay for the extension with a surtax on millionaires, and he made clear that the Keystone XL oil pipeline should be kept out of the legislation.

“Any effort to try to tie Keystone to the payroll tax cut I will reject,” the president said. “So everybody should be on notice.”

In the end, Obama got neither demand.

Just a week after saying he would reject a payroll tax cut extension that included Keystone language, Obama backpedaled on both issues and won just a two-month extension of the payroll tax holiday, far less than the full-year extension he requested in his jobs bill.

Millionaires won't pay higher taxes for the cost of the payroll cut, and House Republicans forced the White House to swallow language forcing Obama to make a decision in 60 days on approving development of the oil sands pipeline from Alberta, Canada, to the Gulf Coast.

While it’s unclear how Obama will emerge from this latest debate politically, some say the latest outcome is reflective of the president’s limited negotiating skills. While the president can seem convincing when selling a plan in town halls across the country, supporters and observers question his ability to seal the deal at crunch time.

“It’s part of a larger pattern where the White House caves after making a grand sell,” said one prominent Democratic strategist. “At the end of the day, what this tells me is that they’re more pragmatic than ideological.”

White House aides were quick to note that the Keystone permit doesn’t mandate construction of the pipeline. They argued the GOP had effectively killed the Keystone pipeline, since they said it wouldn't be possible for the State Department to do an adequate review under the new 60-day timeline.

Republicans, however, believe they will be able to go into the election year criticizing the president for blocking development of a project they say would create thousands of jobs at a time when the unemployment rate remains high.

They painted the deal as a tremendous political win for their party, and the agreement left some of the president’s supporters scratching their heads.

“The talking points on Keystone miss the point,” said one former Obama administration official. “The goal of the GOP is to force the White House’s hand before the election which is what they’ve done now.”

After lawmakers reached a deal on Friday night, political consultant and former presidential adviser David Gergen, told Reuters that, “the Democrats appear to have conceded two significant issues on the payroll tax and got a measly two months extension in return.”

White House aides argue they didn’t lose anything in the deal.

“We gave up nothing,” a senior administration official said on Saturday. “Where [Republicans] caved was they didn’t want to do the payroll tax cut and they decided to under tremendous public pressure pass a major piece of the jobs act.”

“[The word] 'Cave' would suggest that we gave something away and we did not do that,” the official continued, adding that in the long run, the lawmakers who decided to pass the provision will “shoulder the blame” and not the president.

“In the long term, this is a political loss for them,” the official continued, referring to congressional Republicans.

The White House walked a fine line in the tax negotiations, after Obama and his aides were criticized for being too involved in the summer debt talks and then for their laissez fair approach with the supercommittee this fall.

This time around, Obama made calls to Senate Majority Leader Harry Reid (D-Nev.) and other members of Congress and he met with Senate leaders. Senior adviser Pete Rouse, Rob Nabors, who heads Obama’s legislative affairs shop, and White House budget director Jack Lew were also involved in closed-door conversations.

The White House would not discuss the “sausage-making” of the payroll tax deal. But a former Obama administration official who has knowledge of how negotiations with the Hill work, said,  “We’d use Reid as a primary negotiator in the end game.”


“The White House gives him a lot of latitude on what the end game should look like,” the official said.
White House officials would not say if they reached out to Republican lawmakers. But Brendan Buck, a spokesman for House Speaker John Boehner  (R-Ohio) said Obama didn’t pick up the phone during the debate. A GOP Senate aide familiar with the payroll tax extension talks said the president “could not have been more separated from the talks.”

“He was the most detached person from this process of any of the major players,” the aide said.

Cal Jillson, a professor of political science at Southern Methodist University, said Obama will never be an “instinctive power politician” like Lyndon Johnson or Franklin Delano Roosevelt.

While in this most recent debate the president did sit down with Democratic leaders at the White House, “It would be smart for Obama to meet with the leaders down to the committee level,” he said.

“I don’t think he’s a good negotiator,” Jillson said, adding that Obama looks weak to have any part of the Keystone language in the bill.  “It’s a sign of his inability to see all the moving parts.”

“He looks at things the way a college professor would,” Jillson added. “Our whole approach to interacting with other people is argument and debate. “He falls down in thinking that the well made argument wins the argument and in politics it doesn’t work that way.”

Alexander Bolton contributed to this report.

[DBA]

The big infrastructure parts required are:

• Transposition of oil to refinery
• Refinery
• Transportation of end products to users

In addition it makes more sense to build #2 at locations with multiple sources of oil and #3 from areas with multiple refineries so neither are dependant on single sources or beholden to them if prices for other sources are better. This makes refineries and finished product distribution infrastructure dedicated to just the oil sands output a poor bet.

[tomahawk6]

Alaska has wanted to pipe gas through Canada for quite some time now. There are huge amounts of gas but no way to get it to market. A pipeline is the best choice. Keystone may get that project moving as well.

[Thucydides]

The Keystone pipeline will also allow oil from Saskatchewan and North Dakota's Bakken fields to find their way to market faster as well (probably through a series of spur lines leading into the main pipeline, or paving the way for parallel pipeline infrastructure).

Shale oil and other "tight oil" projects will also be able to make use of the Keystone XL pipeline, so we should see many decades of use once the pipeline is built.

[cupper]

And it looks like the GOP may have blown it's own foot off in trying to call the Dems and White House bluff.

Payroll tax cut extension in doubt amid House Republican uproar

http://www.washingtonpost.com/politics/payroll-tax-cut-extension-in-doubt-amid-house-republican-uproar/2011/12/18/gIQAoAhN3O_story.html

The fate of a payroll tax cut extension backed by the White House and overwhelmingly passed by the Senate is uncertain after a restive House Republican conference expressed displeasure with the two-month deal.

Faced with the uprising on his right flank, House Speaker John A. Boehner (R-Ohio) retreated Sunday from his previous support for the package, saying the House does not expect to approve that plan on Monday night after it returns to Washington.

[tomahawk6]

The Senate bill only was for 2 months and the House wants to fund the government through next fall. I dont see the point in a short term appropriation when everyone will be covering this ground in 2 months.

[cupper]

The Senate bill only was for 2 months and the House wants to fund the government through next fall. I dont see the point in a short term appropriation when everyone will be covering this ground in 2 months.

You, me, and most sane members of the bouse.

[cupper]

House Republicans defeat two-month payroll tax cut

The House on Tuesday rejected a bipartisan Senate compromise to extend a payroll tax cut for two months, along with unemployment benefits, plunging Washington on the eve of Christmas into uncertainty about the fate of the tax cut enjoyed by 160 million workers.

On a vote of 229 to 193, the House set aside the Senate bill and requested a formal conference with the Senate, setting up a showdown with the Democratic-controlled Senate and President Obama, who has demanded that the House approve the short-term plan now to avoid a Jan. 1 tax hike.

Shortly after the House vote, Obama spokesman Jay Carney told reporters that House Republicans refused to hold a real vote on the bill that got “sweeping bipartisan support in the Senate” because the House Republican leadership was “worried” it “would actually pass.”

“This is not a game. … it is absoulately essential the House reconsider its approach to this and accept that leaders in both parties in both houses and the president of the United States are all committed to a full-year extension,” Carney declared.

“When it comes to what happened this weekend, the president is not and should not be a marriage counselor between Senate Republicans and House Republicans.”

Shining light of democracy my ***!

[Thucydides]

The twistd political logic behind all this is to keep issues like Keystone XL and private sector job creation front and center in the public mind. The tax cut extension is a logical non sequiter given the openly announced desire of the Administration and Democrats in the Senate and House to raise taxes (indeed their entire world view seems to orbit around the logic that the only tool in the economic tool kit is a tax increase, either directly raising taxs on "millionaires and billionaires", or allowing tax cut legislation to expire).

The other political issue is the philosophical divide between the idea that private wealth creation is the means to generating prosperity vs redistributionist "spreading the wealth around". Punting the pipeline to after the election would have removed a powerful counter argument to the redistributionist idea, while keeping it forward advances the wealth creation argument.

http://www.washingtontimes.com/news/2011/dec/19/create-wealth-not-jobs/

MURRAY AND BIER: Create wealth, not jobs
Keystone XL pipeline would boost prosperity, not government
Comments (25)|ShareTweet|Email|Print| Save for later
By Iain Murray and David Bier-The Washington Times Monday, December 19, 2011 Illustration by Linas Garsys for The Washington Times

Spending on construction and infrastructure jobs is a perennial favorite of government stimulus boosters. “There’s no reason for Republicans in Congress to stand in the way of more construction projects,” President Obama told an Ohio crowd in September. “There’s no reason to stand in the way of more jobs.” However, the president now wants to block a massive private-sector construction project that would create the thousands of jobs he demands - the Keystone XL pipeline.

Strangely, the president seemed absolutely opposed to a compromise that would promote the very construction jobs he claims to favor. “Any effort to try to tie Keystone to the payroll tax cut, I will reject,” he said. “The reason is because the payroll tax cut is something House Republicans and Senate Republicans should want to do regardless of any other issues.” The only logical explanation for Mr. Obama’s continuous opposition to constructing XL is that he thinks it’s a bad idea. With that in mind, let’s judge the pipeline on its merits.

TransCanada's Keystone XL pipeline is a massive job- and wealth-creation project. The pipeline will snake its way 1,700 miles from Alberta to the Gulf coast with stops in Oklahoma and Illinois. Keystone will create $7 billion in investment without any additional congressional spending. It is exactly the sort of massive construction project Mr. Obama demanded from Republicans in September, with one important exception: It’s private.

In the same Ohio speech, Mr. Obama said, “[W]e used to have the best infrastructure in the world here in America. We’re the country that built the Intercontinental Railroad, the Interstate Highway System. We built the Hoover Dam.” In other words, big projects are great as long as they are big-government projects. Otherwise, your project can wait.

The logic behind the payroll tax cut, as explained by Mr. Obama, is that “it will spur spending. It will spur hiring.” But the pipeline the administration is fighting will create 20,000 jobs with no new government spending. Detractors who have argued that these jobs are only temporary, that just 50 permanent jobs will be created, miss the point. Economic activity doesn’t exist to create work, but to create wealth. TransCanada isn’t building the pipeline to provide jobs, but to provide energy - oil for people to power their cars, lower their shipping costs and raise their standard of living.

If constructed, Keystone will deliver 303 million barrels of oil into the United States per year. That’s 830,000 barrels perday. This wealth is the purpose of the project; the jobs are part of the means. If TransCanada could build a pipeline without lifting a single finger - that is, create wealth without work - that would be great. Society would benefit at no cost.

But should creating more jobs be an end in itself? In a word, no. Work is a means to an end - creating wealth. Governments care excessively about jobs because they want every dollar they spend to conspicuously benefit large groups of people very quickly. That is a misplaced priority. For example, Congress could mandate that every person in the United States build the pipeline. We would all have jobs, but we’d all be much poorer, as other areas of the economy languish.

When technology reduces the labor required to travel, make a meal or build a pipeline, that’s progress. The fact that it takes just 50 people to run a 1,700-mile pipeline is an amazing achievement. It frees labor to create wealth in other ways while everyone still enjoys the benefits.

A private-sector project that employs just a few people can create enormous wealth for all of society. Businesses’ drive to increase productivity - to do more with less - frees up resources that then can be invested where they can be put to the most productive use. That goes for infrastructure as well as for any other investment. Furthermore, greater productivity increases wages, as workers’ time becomes more valuable to employers.

Mr. Obama said last summer, “To maintain our nation’s competitive edge, we must ensure that the United States has fast, reliable ways to move people, goods, energy and information. In a global economy, where businesses are making investment choices between countries, we will compete for the world’s investments based in part on the quality of our infrastructure.” We agree. Now the president has the opportunity to show whether he is serious.

Iain Murray is a vice president and David Bier a research associate at the Competitive Enterprise Institute.

[Colin P]

The big infrastructure parts required are:

• Transposition of oil to refinery
• Refinery
• Transportation of end products to users

In addition it makes more sense to build #2 at locations with multiple sources of oil and #3 from areas with multiple refineries so neither are dependant on single sources or beholden to them if prices for other sources are better. This makes refineries and finished product distribution infrastructure dedicated to just the oil sands output a poor bet.

There are logistical issues in shipping the tar sand oil, actually a partial refinement might be worthwhile and reduce wear and tear on the pipe, might also reduce the need for condensate.

[Rifleman62]

The House leader suggested to the President, that he get Harry to call the Senate (prorogued until the end of Jan 12) back into session.

[foresterab]

There are logistical issues in shipping the tar sand oil, actually a partial refinement might be worthwhile and reduce wear and tear on the pipe, might also reduce the need for condensate.

As I understand it oilsands bitumen is basically a two stage refining process while convential light sweet crude is a single stage.  Because of this difference bitumen crude is being sold at a discount against West Texas Intermediate of somewhere in the range of 25% less the current market price of oil.  Condensate produced from natural gas drilling ironically is commanding a premium of ~ 110% of oil prices due to shortages in supply hence partly why so much natural gas drilling in liquids rich zones in Alberta at the moment.

There is 3? possibly 4 upgrader facilities on the books with a couple in production/design.  These upgraders (CNRL Horizon and Syncrude in Fort Mac, Total SA in Fort Saskatchewan, Shell Blackrock in Peace River/Grourard etc..) are basically designed to do a rough cleaning of the bitumen crude and upgrade it to a West Texas Intermediate equivalent which also allows for more blending of the upgraded oils with convential oils due to more similar chemistry.

Unfortunately you run into ALOT of legal and environmental hurdles to cross when building an upgrader plant let alone a refinery.  Everything from power grid needs to heating to water withdrawel plus a strong public outcry of "not in my backyard" yet the facility tends to need to be population centers to find qualified workers.  Also population centers tend to have better quality and higher capacity transportation infrastructure so movement of product is much more easily done (and cheaper).   

In regards to the pipelines with modern coatings and camera equiped "pigs" used to check the pipelines out as long as regular inspections and maintence are done the pipes are mostly safe...coatings can be re-applied with out exposing the pipe and/or chemicals are added to offset corrosion issues.  On older pipelines due to differnt welding technologies and in some cases less stringent monitoring plans built in corrossion is a much bigger issue..

Hope this helps...been out of dealing with oil and gas for a couple of years so it's off some fuzzy memories.
foresterab

[cupper]

The House leader suggested to the President, that he get Harry to call the Senate (prorogued until the end of Jan 12) back into session.

I believe that the Senate is out until Jan 23rd. But it appears that they will be holding pro forma session on Dec 23rd. Most likely to allow the GOP to prevent recess appointments from being made.

[cupper]

Both sides are playing games by forcing the other side to accept a poison pill or explain to the electorate why they rejected something that would turn their voters against them.

Currently the Dems have regained the upper hand.

And it appears that everyone is losing patients with Boehner's inability to control his own members.

Wouldn't be surprised if they end up cutting him out completely.

[tomahawk6]

Both sides are playing games by forcing the other side to accept a poison pill or explain to the electorate why they rejected something that would turn their voters against them.

Currently the Dems have regained the upper hand.

And it appears that everyone is losing patients with Boehner's inability to control his own members.

Wouldn't be surprised if they end up cutting him out completely.
[/q]

Must be something in the water up there.The congressmen that are dragging their feet were all Tea Party approved.They arent going to cave to the democrats.Its absurd to pass a 2 month extension then have to come back and do it again.The Senate is in recess.Obama is on vacation and the American people are focused on the holidays.Polls dont mean squat right now.The only number that matters is how confident people are in Obama's handling of the economy.As we get closer to the election say August we shall see if Obama can sell snow cones to eskimo's.

[Thucydides]

Sigh. The GOP is being handed things on a plate, but seem determined to drop the serving tray. It seems to me that the focus for real change will have to be the downline elections, sweeping "Progressives" out of local, municipal and State offices, and applying strict fiscal discipline to their own houses.

This will lead to a lot of knife fights, since one aspect of strict fiscal discipline will have to be undoing, defunding and closing down expensive and disfunctional "Progressive" initiatives, rolling back wages and benefits for unionized government workers (or firing lots of them to balance the books) and other short term measures. fighting the local war may not be as glamorous as fighting it out in Washington, but probably will have more positive results:

http://www.nationalreview.com/corner/286587/re-payroll-tax-mess-michael-walsh

Re: The Payroll Tax Mess
December 22, 2011 4:28 P.M.
By Michael Walsh

Jonah, thanks for pointing out the salient feature of this flap — that the Democrats have undermined their own arguments about the true nature of the Social Security program (turns out it really is a tax-based welfare program, not a dedicated, contribution-based retirement program), and that the Republicans either ought to take them up on it, or flip the thing one more time and pose as the principled champions of Keeping Social Security Solvent. You write:

    Third, as I understand it, the president and the Democrats have conceded a core principle. By supporting a payroll-tax holiday that will be partly paid for out of general revenues, they’ve undermined the fiction that Social Security is a pay-as-you-go program.

I made a similar point right here just the other day:

    It’s all political Kabuki, of course. Obama wants to paint the congressional Republicans as tax-raising hypocrites, so naturally they’re scattering in fear. But have they thought this thing through? (Rhetorical question.) Do they really want the paying suckers to finally realize that Social Security is a fraud?

Seems to me the GOP would like to have it both ways, but isn’t clever enough to figure out how to do it.

The kicker is that the “payroll tax” cut isn’t really a cut at all. Not only is it a “holiday” (although Obama’s proposal to make it even larger gives the game away), but so far it’s been “paid for” by the government’s making up the shortfall with general-fund taxes and borrowed money. Some cut!

So the GOP really has a twofer here, both halves of which they’re blowing. They’re not making enough hay about the shovel-ready Keystone pipeline and they’re not “quietly celebrating this strategic blunder,” as you so aptly put it, that reveals Social Security’s congenital philosophical flaw.

But then, I expect no strategy from “Republican strategists,” just advice on tactics. They seem to know everything about elections except why we actually have them.

 

What is even worse is the entire debate is being framed with totally fake numbers:

http://dailycaller.com/2011/12/22/white-house-manipulating-payroll-tax-numbers-for-political-gains/?print=1

White House using fake numbers in payroll tax fight
1:57 PM 12/22/2011
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The White House is manipulating numbers to boost the emotional impact of its allegation that Republican legislators are denying a $40 per paycheck tax cut for 160 million American workers.

According to the Census Bureau, the U.S. economy supports only 131.7 million American workers — not 160 million. That total is only slightly up from last November’s total of 130.3 million workers, because of the stalled economy.(Interpolation: miscounting thirty million people is not a simple error)

Still, White House officials continue to push the 160 million number.

“We’ve been doing everything we can to ensure that 160 million working Americans aren’t hit with a holiday tax increase,” President Barack Obama said Dec. 22 at a White House press event intended to pressure the GOP into signing the Senate’s compromise deal on taxes and spending for 2012.

Also, according to White House spokesman Jay Carney, the temporary rollback of Social Security tax is worth about $1,000 a year. That means about $20 a week to the average worker, not the $40 per week the White House commonly cites.(Interpolation: this gives a whole new meaning to "doubling down"!)

On Thursday, Obama repeated the $1,000 estimate, saying “if you’re a family making about $50,000 a year, this is a tax cut that amounts to about $1,000 a year”

But he also repeated the $40-per-week misdirection on Thursday, saying thousands of people have responded to a White House request for people to describe “what would it be like to lose $40 out of your paycheck every week.”

The White House website is streaming many of those Twitter-style responses, many of which also portray the $40 as a weekly gain.

“#40 dollars a week is the cost of my prescriptions; without these medications I would die from a stroke or heart attack.”

“$40 buys a week’s worth of the nutrient drink that my 98-year-old mother virtually survives on.”

“#40 dollars pays for over a week of groceries, fresh fruits, veggies, dairy, whole wheat bread.”

“#40 dollars is half of my grocery budget for the week for my family.”

Many in the media have amplified the misleading $40-per-week soundbite. “Lawmakers were deadlocked Wednesday over continuing the program, which is attached to legislation that would extend a payroll tax cut of up to $40 per week for workers,” the Associated Press reported on Thursday.

“In several hours [on] Tuesday, 10,000 Obama supporters had responded to an e-mail from senior adviser David Plouffe asking what $40 per week, about what the payroll tax cut is worth, would mean to them, according to a White House official,” National Journal reported Dec. 20.

Carney has been careful not to describe the $40 as a weekly gain. “We’re worried about individual families who need that extra money, an average of $40 a paycheck. … That adds up to about a thousand bucks for the year,” he said on Wednesday.

Read more: http://dailycaller.com/2011/12/22/white-house-manipulating-payroll-tax-numbers-for-political-gains/#ixzz1hMuiww80

[Rifleman62]

If the payroll tax is extended 12 months (after the Nov 2012 election), I believe in Jan 2013, both the Bush Tax and the payroll tax, will expire. Interesting what will happen and who will be the President.

[E.R. Campbell]

For all the weeping and wailing, this is, I think, just a phase through which America must pass - rather like adolescence or, more appropriately, male menopause. America is passing from a "free and easy" phase (say, 1900-2000), rather like a person in the prime of his or her life, into the onset of old age, rather as Britain did in about 1900. The current political shenanigans are just the political expression of that change. Neither the Tea Party nor the Occupy movement matter.
 

[cupper]

According to the Census Bureau, the U.S. economy supports only 131.7 million American workers — not 160 million. That total is only slightly up from last November’s total of 130.3 million workers, because of the stalled economy.(Interpolation: miscounting thirty million people is not a simple error)

Still, White House officials continue to push the 160 million number.

“We’ve been doing everything we can to ensure that 160 million working Americans aren’t hit with a holiday tax increase,” President Barack Obama said Dec. 22 at a White House press event intended to pressure the GOP into signing the Senate’s compromise deal on taxes and spending for 2012.

You need to review your articles for accuracy before posting.

The 160 Million number comes from the Bureau of Labor Statistics, which is a direct count of the number of employed / unemployed receiving benefits who are responsible for paying the payroll tax. And yes, if you go to the BLS site, you will find that the number is more accurately noted to be 153,883,000, which includes 140,580,000 employed, and 13,303,000 unemployed receiving benefits.

[Redeye]

If the payroll tax is extended 12 months (after the Nov 2012 election), I believe in Jan 2013, both the Bush Tax and the payroll tax, will expire. Interesting what will happen and who will be the President.

Barring something significant happening, who will be President is more or less a certainty, though there is a year to go. I think the hope the Democrats have is that they can play on public revulsion against the antics of the Congress, particularly with payroll tax holiday, to retake both Chambers, and allow the Bush tax cuts to come to an end among whatever other policies they have in mind. I'd expect the payroll tax cut is fine with them, as it benefits their base much more.

Tying the issue to something that a contingent of Dems seem to have an interest is quite a development.