Republicans kill Keystone Pipeline by handing the knife to the Democrats....

To try to break a stalemate in the payroll tax cut negotiations, Obama's fellow Democrats first dropped their proposal to pay for it with a surtax on millionaires. Then on Friday they abandoned what had appeared to be a non-negotiable demand -- for the Keystone XL oil pipeline from Canada to Texas to be kept separate from the payroll tax cut issue.



The measure would require Obama to make a decision on allowing construction of Keystone within 60 days or declare that "oil trade with Canada is not in the national interest of the United States," according to an aide to Republican Senator Richard Lugar.


Obama recently put off a decision on the pipeline until 2013 while the government studies alternative routes. Many interpreted that move as a way to appease his environmental base in his bid to win re-election in November 2012.


The deal immediately drew fire from environmentalists, who said it was an example of House Republicans holding the federal government hostage on behalf of the oil industry.


"We're disappointed that the president seemingly signed off on this deal, but we expect that he's going to live up to his promise ... that he will turn down the permit for the pipeline," said Daniel Kessler, spokesman for Tar Sands Action, a group that opposes the project.


Kessler said he expected members from his group would reprise their protests about the project at Obama's campaign offices across the country.


In a defense of what appeared to be a major concession to Republicans, an Obama administration official said the deal would effectively mean the Keystone project would not go ahead.


The official noted that the State Department has said it could not make a decision on the project within 60 days and any attempt to force its hand would likely result in a decision to deny a permit for the project.