Top Senate Republicans have begun to acknowledge publicly that the payroll tax cut conference is not the place to legislate the Keystone XL pipeline, while House Republicans are conceding privately that their interests are best served by placing it elsewhere.
Still bruised from a bitter end to December's payroll tax holiday fight, Republicans are looking to a forthcoming House energy and infrastructure bill, which could keep the pipeline issue alive for GOP Members eager to draw a contrast with President Barack Obama as the November election nears.
Republican conferees have been hesitant to tip their hand, but Speaker John Boehner (R-Ohio) hinted in a television interview over the weekend that his forthcoming American Energy and Infrastructure Jobs Act could be a better vehicle for a measure to force the pipeline's construction.
"Thank God," Sen. John McCain (R-Ariz.) said of separating the Keystone XL pipeline issue from the payroll debate. "I think it's a wonderful idea. Americans want the pipeline, but they didn't relate that as sufficient reason to not give 160 million Americans tax relief."
In December, Republicans were able to win big on the pipeline by tying its construction to job creation. But the GOP's messy endgame on the payroll cut extension — particularly in the House, where Members tried to block a two-month extension agreed upon by Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) — has provided Republicans with an incentive to quickly wrap up negotiations.
This is not to say that the GOP won't bring up the pipeline issue in conference meetings — it likely will. But attaching the provision to a five-year energy and infrastructure bill that is a priority for Boehner could prove to be an all-around win for a GOP Conference looking to score one.
Republicans will be able to use the bill to prolong their media campaign and floor battle on jobs against Obama, according to sources tracking the issue. The pipeline also could be viewed yet again as a carrot for conservative House Republicans who are reluctant to support any legislation that endorses government spending.
It could also draw bipartisan support from Democrats who want the pipeline built but don't like how Republicans are handling the issue. House Minority Whip Steny Hoyer said Tuesday he thinks the highway bill is a "more appropriate" venue.
"If it can be considered on substance, I think, you know, I think certainly it ought to get consideration," the Maryland Democrat said. "The poison pill is trying to put the president in a corner on this issue for political purposes, as opposed to substantively getting this considered on its merits."
All the while, House Republicans could be slowly putting Senate Democrats in a jam. The Senate is working on its own two-year energy and infrastructure bill, as opposed to the nearly five-year extension being proposed by the House GOP that would be paid for using revenues derived from oil drilling. Senate Environment and Public Works Chairman Barbara Boxer (D-Calif.) has already declared a package with that sort of funding mechanism as dead on arrival in the Senate.
Republicans could keep the spotlight on the issue if the chambers pass their own bills and debate the issue in conference, or perhaps by pressuring the Senate to take up a House bill that could put Democratic Senators who support the pipeline on the spot.
But Republican leaders have yet to figure out exactly how to broach the topic again. According to House and Senate sources, there is not consensus on how to approach the pipeline from a legislative perspective. One option is to include identical language from the last go-round and force Obama to reject the project again. Another option is to try to find more forceful language. Even then, it's unclear whether Congress could work around the administration to get the pipeline started.
"We can take the president out of it, exercise our authority under the Constitution to deal with foreign commerce — which this would clearly be, between Canada and the United States — but it's pretty hard to wire around the president of the United States and Democrats," Sen. John Cornyn (R-Texas) said.
But even Cornyn seemed to acknowledge that it might behoove Republicans to make those decisions later and not let the pipeline get in the way of a popular tax cut extension.
"I think we need to pass a yearlong payroll tax extension, and how we do it is not as important as doing it," said Cornyn, the National Republican Senatorial Committee chairman. "So I support the Keystone pipeline extension; I think it's important. But, recognizing President Obama and Senate Democrats are opposed to it, it's hard for us to do it when we're in the minority."
John Stanton contributed to this report.