Keystone XL vote increases Washington gridlock

Keystone XL vote increases Washington gridlock

Both the House and Senate have voted to approve the Keystone XL, but President Obama is slated to veto the bill. With important deadlines coming up, the Keystone debate will only exacerbate Washington gridlock.

Supporters of the Keystone XL pipeline crossed another item off their to-do list last month: get the Senate to approve the pipeline. The newly Republican body voted 62-36 in favor of building the new pipeline which would connect the Canadian oil sands with existing pipeline infrastructure in the US, which would allow the Canadians to get their oil to the Gulf Coast where much of the US’s oil refining takes place.

The House of Representatives passed a similar bill earlier in January. The controversial pipeline is still far from final approval because President Obama is expected to veto the bill this week. The Senate vote complicates the drawn-out debate over the pipeline, which had previously failed the Democrat-controlled Senate in November when then-Senator Mary Landrieu (D-LA) pushed a vote in a last-ditch attempt to win a runoff election.

Republicans contend that the pipeline will create high-paying jobs and is a step toward energy independence. For most of the years’ long debate, Democrats have based their opposition on environmental concerns. That has changed recently, however, as their arguments have been broadened with pushback on job creation claims and falling oil prices.

The State Department’s economic analysis of the project concluded that of the 42,000 jobs that would be created over the life of the pipeline, only 50 would be permanent. Republicans and Democrats have both used these figures to bolster their case, but Democrats have found momentum in the relatively small number of permanent jobs.

Additionally, falling oil prices have weakened the enthusiasm for energy independence, since to many consumers savings on fuel is more important than its source.

Creating a stalemate early in the Congressional session?

The Keystone debate exposes two major rifts between the White House and Republicans that could hurt their ability to pass legislation during Obama’s last two years in office. The first is about policy; the second is about politics. The environmentalists who first pushed the issue of Keystone XL on the Democrats did so to draw attention to climate change, and they have succeeded. The problem is they have not convinced Republicans.

For some elements of the Republican party, climate change is “the greatest hoax ever perpetrated on the American people.” For others, climate change is real – and they may even concede that it is caused by humans – but not a priority compared to creating what they characterize as a business-friendly platform free of burdensome regulation.

Climate change has traditionally not been a swing issue in US politics – it only excites the Republican and Democratic bases. If it has been anything more, it has helped Republicans, as evidenced by the ouster of Mary Landrieu from her Louisiana Senate seat. Even though she voted in favor Keystone XL, voters did not want to hand over another seat to the Democrats, who more likely to legislate on climate change.

The proportion of Americans who believe that climate change is caused by humans is growing, however, so Republican dominance on this issue may slowly fall into jeopardy.

Looking past the issue of climate change, the friction that the Keystone XL pipeline creates between Congress and the President is worrisome for legislating other issues. Just like the Affordable Care Act, the persistent debate and ceremonial voting in Congress only serves to entrench each party in their existing position.

It certainly will not help build goodwill for compromise on other issues. This latest flare up in the Keystone XL debate comes just a few weeks before the next stand-off in Washington: funding the Department of Homeland Security (DHS).

DHS is the third-largest Cabinet department, having responsibility over immigration and border control, the Secret Service, and emergency management, among others. As a protest to the President’s executive action on immigration, Republicans in Congress inserted a condition in last fall’s budget that DHS would only be funded until February 27 and that they would only extend it if President Obama undid his immigration order.

The latest stalemate over Keystone will excite partisans, but in the end only further deteriorate the relationship between White House and Congressional leadership.

On nearly every issue, the parties have isolated themselves from each other. It appears that this will only continue the long-time Republican strategy of shifting focus from legislating to campaigning for the next election as soon as possible – only this time Democrats are playing the same game.

If either of the two parties keeps pressing the Keystone issue – which is likely given that it energizes their bases – it will become an undercurrent in the 2016 Presidential election. Interestingly, Democratic favorite Hillary Clinton has gone out of her way to not share her opinion on the pipeline. Of course, if Republicans win the White House and hang on to Congress, the debate would be over and Keystone XL would quickly be approved.

About Author

Alex Christensen

Alex is an Editor at Global Risk Insights, who also currently works in investment research. His work on political risk and economic policy has appeared in many forums, including Business Insider, Seeking Alpha, & The Emerging Market Investors Association. He holds a Master’s in Economics from the London School of Economics and BA from Washington University in St. Louis.