GOP Leaders Still Holding Middle-Class Tax Cut Hostage For Oil Pipeline, After Democrats Make Major Concession

Congress may have come to an agreement on a $1 trillion bill to keep the government funded beyond midnight (when the current round of funding runs out), but there is significantly less common ground on extending the soon-to-expire payroll tax cut. Democrats, in an attempt to prevent a tax increase on working Americans come year end, have dropped their demand that the extension be paid for via a tiny surtax on income in excess of $1 million.

So does that mean Republicans have dropped their demand that an extension be tied to the approval of the Keystone XL oil pipeline? Of course not:

House Speaker John A. Boehner said Friday that his chamber will not sign off on an extension of the payroll tax cut sought by President Obama without including a provision to speed construction of an oil pipeline, which Obama has opposed…“If that bill comes over to us, we will make changes to it, and I will guarantee you that the Keystone pipeline will be in there when it goes back to the United States Senate,” Boehner said.

Senate Minority Leader Mitch McConnell (R-KY) joined in, saying, “Frankly, I will not be able to support a package that doesn’t include the pipeline.” Republicans claim that the oil pipeline will be a job creator, but the only independent analysis into the pipeline found that just 500 to 1400 temporary construction jobs will be created, “with a negative long-term economic impact.”


In order to attain its beloved pipeline, the GOP is willing to raise taxes on 113 million households next year, costing the average family $1000. At the same time, the GOP adamantly refused to consider a surtax on the very wealthiest Americans. This has become the standard operating procedure for the GOP this year: exploit expiring provisions (or the imminent expiration of U.S. credit) to force through a conservative agenda. In this instance, it’s middle-class taxpayers or the environment that suffers if Republicans get their way.


At TPGreen, Brad Johnson notes that GOP presidential front runner Newt Gingrich endorsed attaching the pipeline to the payroll tax bill.