President Barack Obama announced this week that he has rejected the Keystone XL pipeline as it currently exists, a move that effectively cancels the long-debated project for the foreseeable future. As expected, the reaction from Republicans has been anything but positive. Conservative members of Congress have lamented the thousands of potential jobs lost as a result of the project’s cancellation. As they complain, there are obvious inconsistencies between the jobs rhetoric now emerging from the right and the Republicans’ opposition to the president’s American Jobs Act in September of last year.
TransCanada’s controversial Keystone XL pipeline project would have brought natural gas and oil to 1,700 miles from the tar sands in Alberta, Canada through six states and down to the Gulf Coast. Yesterday’s announcement was not the first time Obama had attempted to cancel the pipeline. In November, the White House delayed his decision, opting to wait until 2013 for the State Department to review an alternate route that would avoid regions that environmentalists had identified as highly environmentally sensitive. This delay was considered a fatal blow for the project and a boon for Obama, who would not be required to issue an official decision until after the election in November.
But as part of the tax deal, he cut with Republicans at the end of last year. The president was required to make a decision on the pipeline by February 21. Republicans in Congress and right-leaning pundits see Keystone XL as a symbol of job creation and a sure way to restore the national economy. Congressional Republicans hoped that by pushing up the decision to before the election, they would be able to leverage Obama’s dismissal of a job-creation project during campaign season.
As if on cue, Speaker of the House John Boehner (R-Ohio) issued a statement yesterday condemning the White House’s decision to block the project, citing the “tens of thousands of jobs” that Keystone XL would have created. “The president,” said Boehner, “is selling out American jobs for politics.” This is particularly interesting, considering the stance that Republicans in Congress have taken against the president’s jobs bill since it was proposed back in September.
The American Jobs Act, if passed in full, would have made hundreds of billions of dollars worth of investments in public projects. These projects would have employed as many as 1.9 million Americans as they upgraded, repaired, and expanded highways, bridges, rail, and other crucial infrastructure across the country. The Act also included billions of dollars in provisions to keep teachers, firefighters, and police officers at work, and billions more would be used for Summer Youth Employment Programs and an extension of unemployment benefits.
The rhetoric that came out of the right at that time included accusations that the president’s proposal was an irresponsibly massive expenditure, dismissing the act and marking it as an unnecessary addition to the deficit and an attempt at garnering electoral support ahead of the 2012 election. These accusations were made despite the president’s assertion that it would be paid for by the supposed reductions from the ill-fated super committee.
The prolonged debate on job creation and Keystone XL can be distilled to two points of agreement between both parties. First, everyone agrees that infrastructure investment in times of economic downturn leads to returns in the private sector. The point of divergence here is that Republicans believe in backing direct private investment, while the president stands firmly behind the importance of public seed money for spurring private investment. Second, the goal of any economic policy today is to create and sustain as many American jobs as possible.
While Republicans may disagree with the means to arrive at more jobs for Americans, it is difficult to argue with the numbers. The most optimistic estimate reported that the Keystone XL pipeline created 13,000 construction jobs and 118,000 spin-off jobs — jobs that would come as a result of increased activity in local economies along the pipeline. This, of course, does not account for the potentially devastating economic effects of situating a tar sands pipeline within close proximity to some of the most thriving biodiversity hotspots in the U.S. On the other hand, the American Jobs Act could have created about 1.9 million American jobs with virtually no impact on the environment.
If Republicans in Congress are going to back an investment in infrastructure, it would be most beneficial to support the kinds of national public projects that will put millions of Americans back to work and will enhance the country’s infrastructure. By throwing their weight behind the pipeline project, Republicans have missed a crucial opportunity for economic growth. Once again, politicization of a simple economic principle — that infrastructure investment leads to job creation — has left millions of Americans without a paycheck. Still, now that the Keystone XL pipeline has been canceled, Republicans should back the president’s proposal for infrastructure projects that create jobs if they are serious about getting Americans back to work.
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