US payroll tax cut bill's pipeline provision moves to the front
The US House of Representatives has approved the Senate bill providing a 2-month extension to lower payroll taxes, and extend unemployment benefits. Now the bill goes to US President Obama for signature along with the requirement that he make a decision on the Keystone XL pipeline within 60 days.
The Big Q: what are Mr. Obama's options?
The Big A: The President could veto the bill, he could sign it and tack on a so-called signing statement, or he could sign it, and make the decision Congress is forcing on him.
Transcanada Corp. ( TRP ), is the builder of the proposed Keystone XL pipeline.
It is unlikely the President will veto the bill, so that's no choice.
Mr. Obama has said that he would use a signing statement only in the event that the legislation includes an unconstitutional provision. He may not like having his hand forced, but the Congress can do it, Mr. Obama will have to decide.
Environmental groups, big supporters of the US President, will demand that he kill the Crude Oil pipeline.
If he chooses this course, he is required by the legislation within 15 days to provide a "report that provides a justification for determination, including consideration of economic, employment, energy security, foreign policy, trade, and environmental factors."
Will he take that bait, for that is what it is?
The US House Republicans are betting that he will not, and that he will be forced to accept the Crude Oil pipeline.
The argument over the Keystone XL pipeline should have been settled a long time ago, and construction should already have begun IMO.
Now, the odds favor a Presidential rejection, not because it is the best choice, but because environmental voters could abandon him in Y 2012 if he approves Keystone XL.
Most pipeline supporters were not likely to vote for him anyway.
Transcanada's shares were not affected much by Friday's House vote. But as the deadline for decision on the pipeline gets closer, Transcanada could come under some pressure. Stay tuned...
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.