Putting Keystone on a ransom note

As of a couple of weeks ago, it looked as if House Speaker John Boehner (R-Ohio) was eager to avoid another fight over the payroll tax break. The issue had done considerable damage to his caucus in December, and Boehner reportedly didn’t see much of an upside to once again positioning Republicans as fighting for a middle-class tax increase.

But in this Congress, nothing is ever easy, and as of yesterday, Boehner signaled his interest in possibly holding the tax cut hostage before its expiration at the end of February. What would be on the ransom note? The Keystone XL pipeline that President Obama rejected last week.

Here’s an exchange between the House Speaker and Fox News’ Chris Wallace yesterday:

WALLACE: Well, you say all options are on the table. Are you saying that you may link the Keystone pipeline to extending the payroll tax holiday?

BOEHNER: We may. But as I said, all options are on the table.

WALLACE: Now, here’s an interesting question, because what you did this last time is you just said you have to disapprove it again in two months and he disapproved it again as he had before.

Why not demand that if he wants the payroll tax cut, he has to approve it? In other words, it comes with it. You want the payroll tax cut? The pipeline goes with it.

BOEHNER: All options are on the table.

The threat was never explicit, but the Speaker did use the “all options are on the table line” four times in less than a minute.

This would hardly be out of character for the House Republican leadership. On the contrary, it’s become their standard m.o. — they threaten to hurt the country unless Democrats give them something they want. It’s been a near-constant dynamic, played out repeatedly over the last year.

There are a couple of angles to keep in mind as this unfolds over the next couple of weeks. The first is that the Speaker may very well be bluffing — there’s no real harm in seeing what he can extract from the White House — and may have no intention of blocking a payroll-tax-cut extension. The issue has already burned the GOP once. Is Boehner really willing to kill a middle-class tax cut in an election year, allowing the Obama White House to hammer Republicans on this again?

The second is that the Keystone deal is no longer a simple matter of getting a green light from the president. Republicans pushed an artificial deadline on Obama, and left with limited options, he responded by scuttling the project. As Brian Beutler reported this morning, by expediting a formal rejection of the project, Republicans have inadvertently changed the equation dramatically.

If both the U.S. government and Canada support the project, why can’t the White House and TransCanada pick up where they left off in January? It turns out the formal rejection changes the equation quite dramatically.

Reapplying for the project isn’t simple — it’s time consuming and costly, and if the shippers that have partnered with TransCanada decide to take their business elsewhere, the whole thing could go bust.

Boehner may not understand these details — he’s never been a policy guy — but the process isn’t as simple as saying, “I’ll trade you the tax cut for the pipeline.” Logistically, that’s just not an option right now, whether Republicans like it or not.

The irony, of course, is that Boehner and his party were more likely to actually get the pipeline before they started playing partisan games with it.