President Obama has reportedly decided to reject the Keystone XL Pipeline and the 20,000 jobs, increased energy security and billions in economic activity that are tethered to it.
The payroll tax extension bill that Congress passed in December gave Obama 60 days to determine whether the pipeline is in the country’s national interest. It is, but Obama has decided to kill the project anyway — for political reasons. Basically, Obama doesn’t want to alienate his environmentalist supporters, who have worked themselves into a frenzy over the innocuous pipeline. Instead, he’s selling out the union members who would have built it and the consumers who would have benefited from its construction.
Politically, unions have nowhere to go. With public sector workers constituting a majority of U.S. union members, the unions need high levels of government spending (and large numbers of government jobs) in order to remain viable over the long haul. In practical terms, that means they need to support the Democratic Party. During the 2008 election cycle, unions gave 92% of their members’ dues to Obama. Obama knows union money will continue to flow into his war chest even if he kills some union jobs by scuttling the pipeline.