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Highway Bill Drops GOP Push for Keystone Pipeline

Congressional leaders have tentatively agreed on a two-year bill to overhaul federal highway programs that drops a requirement that the government approve the Keystone XL oil pipeline.

Paul Taylor | Stone | Getty Images

Senate aides said they were working Wednesday to put the agreement into legislative language, which must happen before House and Senate leaders formally sign off on the deal. The leaders will also want time to sound out their members' support for the measure. The aides described the deal on condition of anonymity because the deal wasn't final.

House Republicans had pushed for inclusion of a provision that would go around President Barack Obama by requiring a federal energy agency approve the oil pipeline, which would transport oil from Canada's tar sands to Port Arthur, Texas. The White House threatened to veto the bill if Keystone were included.

Also eliminated from the bill was another provision sought by House Republicans that would have blocked the Environmental Protection Agency from regulating the toxic ash generated by coal-fired power plants. The ash is used as an ingredient in some types of cement. Sen. James Inhofe, R-Okla., a key negotiator on the bill, told reporters that both the Keystone and coal ash provisions had been dropped.

House Republicans won concessions from the Senate on environmental reviews of highway projects and on a program that funds bike paths, pedestrian safety projects, beautification and other "transportation enhancements," Senate aides and environmentalists said.

The law requires that the government study potential environmental impacts before starting highway construction projects, but that can cause delays and drive up costs. The deal struck Wednesday would reduce the average time it takes to complete a highway project from 15 years to about eight years.

The agreement also makes other kinds of transportation programs eligible for the same pool of money that funds transportation enhancements, which means there will probably be less money to go around for biking and pedestrian projects.

Republicans have criticized the enhancements program as wasteful, saying it pays cities to plant flowers. Highway landscaping has been an eligible category for funds under the program, but supporters say far more money has gone to biking and walking projects.

Under the agreement, the highway bill would be combined with another bill to prevent a doubling of student loan interest rates. That's because lawmakers plan to use pension law changes to help pay for both measures. Congress is also facing weekend deadlines for both bills: Highway programs and the government's power to levy federal gasoline and diesel taxes are due to expire on Saturday. Interest rates on subsidized Stafford loans would double from their current 3.4 percent for 7.4 million students expected to receive such loans in the year beginning July 1 unless Congress acts.

Both parties see the transportation bill as a jobs creator, and Congress' best bet to do something about the nation's stubbornly high unemployment rate before the November election.

It remained unclear exactly how much the bill would spend. A transportation bill passed by the Senate earlier this year would have spent $109 billion through the end of fiscal 2013. The Republican-controlled House was unable to pass its own comprehensive bill because of divisions within GOP ranks. Instead, it passed a three-month extension of current programs that also included the Keystone and coal ash provisions.

The number of jobs created by the highway bill depends on its spending level. Sen. Barbara Boxer, D-Calif., the Senate bill's sponsor, has estimated that the Senate's original bill would have saved or created 2.8 million jobs.

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