Washington Extra – The Keystone cudgel

January 19, 2012

President Obama had until the end of February to make a decision on the Keystone oil sands pipeline, but he made his move today. And, predictably, he rejected the $7 billion project. That keeps him in good standing with his environmental base for November 2012 but creates new tensions with his Republican foes.

Republicans had forced Obama to make a decision in 60 days as part of the deal for the two-month payroll tax cut extension. House Speaker John Boehner quickly reacted to the rejection by saying “all options are on the table” to craft a bill to fight for the pipeline.

But Boehner may not have many options. If the Republicans push for a bill to get approval for Keystone, the president can veto it. If they choose to make it a bargaining chip in talks for a full-year extension of the payroll tax cuts, they will likely meet fierce resistance from Democrats. We are hearing Boehner just wants to seal the payroll tax cut extension and move on after his painful capitulation in the December deal.

Perhaps Republicans should just be content to wield the Keystone cudgel on the campaign trail rather than in Congress. Mitt Romney showed how to use it pretty effectively today, blasting Obama for “his lack of seriousness” by putting electoral considerations before national interests.

Here are our top stories from Washington…

Obama Administration rejects Keystone oil pipeline
The Obama administration rejected the Keystone crude oil pipeline project, a decision welcomed by environmental groups but blasted by the domestic energy industry. Obama said TransCanada’s application was denied because the State Department did not have enough time to complete the review process. Lawmakers that support the project forced a decision by attaching a measure to a tax-cut law passed at the end of last year.

For more of this story by Jeff Mason and Roberta Rampton, read here.

Republicans vow to fight for Keystone pipeline
Republicans in the House of Representatives said they plan to introduce a bill to advance the Keystone XL pipeline to try to override President Obama’s rejection. House Speaker John Boehner told reporters “all options are on the table” to craft a bill to fight for the pipeline. “There are legislative vehicles that will be moving in the weeks and months ahead,” Boehner said.

For more of this story by Roberta Rampton, read here.

In Bain deals, Romney gave stock to Mormon church

Using a practice that made him eligible for large tax deductions, Mitt Romney gave the Mormon church substantial stock holdings obtained through his private equity firm, according to documents filed with the U.S. government and to associates. This tactic is a common way for wealthy Americans to make large donations. But in presidential campaign in which Romney is being pressured to reveal his tax returns and details on his vast wealth, the donations shed light on tax strategies of Romney and others at Bain Capital.

For more of this story by Mark Hosenball and David Henry, read here.

Romney aims to stay away from his income tax issue
Republican presidential candidate Mitt Romney sought to stay away from the issue of how much he pays in taxes a day after acknowledging that his income tax rate is about 15 percent, but a key ally joined rivals’ calls for Romney to release his tax returns.

For more of this story by John Whitesides, read here.

Pockets of Internet go dark to protest piracy bills
Wikipedia, the free online encyclopedia, went dark and other Internet players including Google put black censorship bars on portions of their websites in protest of pending legislation designed to curb online piracy. The unusual protest was visible across the Internet, with dozens of commercial and non-profit websites either closing down for the day or urging visitors to oppose what had until recently been a relatively obscure and technical legislative proposal.

For more of this story by Sarah McBride and Jasmin Melvin, read here.

Suspicion grows China was behind hack of US commission
Suspicion is growing that operatives in China, rather than India, were behind the hacking of emails of an official U.S. commission that monitors relations between the United States and China, officials said. Officials said the roundabout way the commission’s emails were obtained strongly suggests the intrusion originated in China, possibly by amateurs, and not from India’s spy service.

For more of this story by Mark Hosenball, read here.

One million homeowners may get mortgage writedowns-US
About one million American homeowners would get writedowns in the size of their mortgages under a proposed deal with banks over shady foreclosure practices, Housing and Urban Development Secretary Shaun Donovan said. The deal, which could be struck within weeks, would mark the largest cut in the mortgage load since the start of the credit crisis in 2007 and could pressure the government-sponsored mortgage agencies to also reduce principal on underwater home loans.

For more of this story by Margaret Chadbourn and Aruna Viswanatha, read here.

Obama education reforms advance as Congress falters
President Obama’s administration is moving ahead in reforming education without the help of the Congress, and will soon announce which states can opt out of the national education law known as “No Child Left Behind.” There are two bills currently in Congress to re-authorize the decade-old law. “I don’t think either one of those is going to move forward anytime soon, but I think the waiver process that we’re doing now is going to be the only game in town,” Education Secretary Arne Duncan told a meeting of U.S. mayors.

For more of this story by Lisa Lambert, read here.

From elsewhere…

Analysis: Ship disaster unlikely to prompt quick safety changes
The cruise ship disaster off Italy’s coast is drawing fresh scrutiny to the gaps in international safety rules and standards – yet there may be little appetite among the world’s major shipping nations and companies for big changes anytime soon. While an international regime exists for the training of mariners on everything from car ferries to cruise ships, enforcing that is very much a national affair.

For more of this exclusive story, read here.

For more stories from our Washington correspondents visit www.reuters.com and stay informed.

Photo Credits:  REUTERS/Joshua Roberts (demonstrator wearing a Guy Fawkes mask); REUTERS/Yuri Gripas (Boehner, Cantor); REUTERS/Jim Young (Romney in Lexington, SC)

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