WASHINGTON (AP) – A dispute over a Canada to Texas oil pipeline threatened to complicate efforts in Congress to pass legislation that would avert a New Year's tax increase for millions of Americans and extend government benefits to the unemployed.
President Obama and many congressional Democrats are opposed to accelerating work on the proposed Keystone XL pipeline, which would run 1,700 miles from western Canada. That conflict has been one of the major hurdles to a bipartisan compromise on the payroll tax package.
Obama has announced he will delay a decision on the pipeline until after next November's elections, citing a need to study the impact the pipeline would have on sensitive lands in the Midwest state of Nebraska. Obama has threatened to reject the payroll tax bill if it includes language on the pipeline.
The postponement would let Democrats avoid having to choose between two of the party's core constituencies: environmentalists who oppose the pipeline and some labor unions, who covet the jobs it would produce.
At issue are the extension of a reduced tax Americans automatically pay into the Social Security pension plan and extended federal government payments to the unemployed.
Obama and the Democrats had wanted to pay for a reduction in the so-called payroll tax by imposing a 1.9% surtax on incomes of the richest Americans, those taking home more than $1 million a year. They apparently have dropped that demand and will find the money to finance continued cuts through higher fees charged by the public-private organizations that guarantees home mortgages.
Congressional Republicans had steadfastly refused to accept any increase on taxes, a bedrock issue for the party.
A new poll shows Americans hold members of Congress from both parties in record low regard, but see Republicans as more to blame for the legislature's poor record of lawmaking this year.
That combined with a new Associated Press-GfK poll that shows Americans broadly in favor of an extension of the Social Security tax cut and a lengthened period of unemployment compensation payments may have helped engender the new mood for compromise.
A poll released Thursday by the Pew Research Center for the People & the Press found public discontent with Congress at record levels, with two-thirds of those surveyed saying current members of Congress should be voted out of office next year. By a margin of nearly two-to-one (40% to 23%), more of those questioned by Pew blamed Republican leaders than Democratic leaders for Congress' "do-nothing" record.
The pre-Christmas wrangling caps a contentious year in a capital hindered by divided government, with Democrats controlling the White House and the Senate and Republicans run the House. Lawmakers have engaged in down-to-the-wire drama even when performing the most mundane acts of governing, such as keeping agencies functioning and extending federal borrowing authority, tasks that are only becoming more politically delicate as the calendar nears the 2012 election year.