Combining the Payroll Tax Cut Extension and Keystone Pipeline Project

There was briefly a deal in the Senate to continue the payroll tax cut for two months and allow President Obama the luxury of signing the bill that also includes the go-ahead of the Keystone Pipeline project. The fine print is that Obama would not have to decide if actual permits would be issued for the pipeline project for those two months. He would be allowed to kick the can down the road for two more months.

The payroll tax cut would not be on the mind of the President were this not an election year for him. No one should think otherwise. And, the problem for many in Congress is that this tax cut takes money out of the coffers of Social Security - already in big trouble - and puts it into the general fund where Congress will spend it freely.

Keep in mind that the payroll tax "cut" is nothing more than a tax holiday. All the political palaver is about extending it for one more year, through 2012, so Mr. Obama can claim he did something for middle-class voters before Election Day. Because it is temporary, the tax holiday will do little to change employer incentives to hire.

The best one can say for the payroll reprieve is that individuals will better spend the money than the government would. The problem is that government will keep spending anyway, borrowing the money instead. The one-year payroll extension will take something like $121 billion from Social Security revenues, which means about 10% to 15% of the entire federal budget deficit expected for this fiscal year.

And, oh by the way, President Obama double dog dared the Republicans to insert the Keystone Pipeline project into the tax cut extension bill so that he could look like a decision maker and veto it all.

The problem is that the deal, though everyone was excited that both parties came together and voted in favor of it in the Senate, is so short sighted that it does no good. A two month extension of a tax cut? Really? That does what, exactly? What it does is show a continued unseriousness of Congress to address the issues of our dithering economy and show a little political courage while they do so. Instead, President Obama wants to delay a big decision for our energy independence past the 2012 election and not make a Democrat's Sophie's choice - does he go with labor unions who want jobs or with the environmental extremists who demand more time for studies that have already shown the project to be doable. What a nightmare for a leftist who really, really wants to be re-elected.

To the environmentalists, this is a bit of reality:

This is a map of crude oil pipelines throughout the United States:

There are crude oil pipelines across our nation and the record is good. We have the technology and experience to do this new pipeline safely and respectful of the environmental concerns. This is a perfect opportunity to walk the walk after talking the talk about our desire for energy independence from those who want to kill us. And, if Canada doesn't make this deal with us and sell us oil, they have decided to sell it overseas to countries like China. They can't be blamed. They have a product to sell.

The strange part is Obama's continued insistence in screwing our allies and true friends, like Canada as he goes out of his way to prop up our enemies.

This week Congress will vote and work out a way forward. Then President Obama can go on his extended Christmas holiday to Hawaii and continue to "not rest" until every American who wants a job has one, as he pledged three years ago.