The House is just now concluding debate over the Republican version of the payroll tax extension. It has a "poison pill," says Democrats -- it reverses Barack Obama's own reversed position on the Keystone XL pipeline. Maybe that was confusing. Basically, it allows the pipeline to be built, by requiring the executive branch to sign off on it, and start taking precious oil out of the tar sands. Do that, say Republicans, and they'll extend the payroll tax holiday and unemployment insurance for a year, and they'll apply the "doc fix" that funds higher Medicare reimbursements.
On the merits, why is this a bad deal? The White House decided to punt the Keystone XL decision until 2013. That doesn't prevent Transcanada from looking at other ways to get oil from the tar sands. Canada's still in on the deal. Republican-run Nebraska is looking for a way to complete the deal. This was a temporary victory for environmentalists. So, Republicans will turn that into a defeat. That's too bad, and it would sting harder given how greens were sold out over the smog rule earlier this year. But they're in this place because of bad horse-trading from the White House. It's difficult for the Obama admnistration to reverse itself, again, because it would look politically week. In the long run, is that a bigger problem than giving up a tax cut that could add 0.5 points to GDP in an election year?