Analysis of Pipeline Politics

This is a rush transcript from "Special Report," December 7, 2011. This copy may not be in its final form and may be updated.


PRESIDENT BARACK OBAMA: It i s my job as the president of the United States to make sure that a process is followed that examines all the options, looks at all the consequences before a decision is made. Now that process is moving forward, the State Department is making sure that it crosses all its t's and dots all its i's befo re making a final determination.

SEN. JOHN THUNE, R - S.D.: So all this rhetoric and all the hot air that comes from people here in Washington, D.C. about wanting to create jobs, this is really putting it to the test. This is where you have to put up or shut up when it comes to whether or not you are serious about creating jobs in this country.


SHANNON BREAM, ANCHOR: Of course, talking about the Keystone XL pipeline that would bring fuel from Canada through the U.S. down into the Gulf coast region. A lot of folks thinking it would create a lot of jobs, but the president is not going to make a decision until after 2013, some point in 2013. So let's talk about it with our panel. Charles, Nina, and Charles. Charles K., I'll start with you. What do you make of this? Of course it puts the president between two difficult constituencies and today in an odd position with the Canadian prime minister.

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: And the Canadian prime minister was extremely soft spoken. He spoke like a friend. He didn't in any way criticize the president. But that is because Canadians are nice. I know that, I grew up in Canada, extremely nice. The Mounties, the beavers, the maple leaves, the loonies. But the Canadians are not stupid. The foreign minister who was here today said that if you have a store, you want to have a lot of customers, meaning that if the United States is not going to accept a gift, a secure source of oil from a friendly ally and a -- really a strategic asset, which will incidentally create a lot of jobs, if it doesn't want the Alberta shale oil, they will build a pipeline west and China will have access to it.

And I think they are serious about that. They are deeply upset about what was purely a political decision on the part of Obama. This idea that he had to do a process and to dot the i's and cross t's is rubbish. The pipeline was the most studied pipeline in the history of American pipelines. A three-year study by the State Department which found in two very large reports no serious damage or danger of it. And yet Obama overrode that. Why? Simply because he didn't want to anger his base. And so he punted it into 2013. And I can assure you that the Canadians are not happy about that. And we could in the end forfeit a huge source of jobs, energy, security, and a really important strategic asset as a result.

BREAM: And something the president said today is that he warned Republicans and those on Capitol Hill who would try to tie forcing the Keystone XL pipeline to the extension of the payroll tax cut. He will veto anything that comes along the lines. It was pretty tough language.

NINA EASTON, COLUMNIST, FORTUNE MAGAZINE: And I just want to follow up on Charles' point about Canadians being polite. I was at the APEC, Asian Pacific Economic Ministers Conference in Hawaii just a month ago and Prime Minister Harper was not so polite. He met with Chinese President Hu Jintao and made it clear to Obama that, guess what, we are going to take that oil to the Asian markets. And he's made that very clear.

That's a real -- I think that's a really smart issue for Republicans to latch on to. And I think it's smart to tie it to the payroll tax. Because, what you've got -- you are giving up the potential of 20,000 blue collar jobs, for what I call the one percent jobs. So we are going to spend another year after we've already said that it will have no environmental significant impact on the environment, so you spend another year paying white collar workers to do more environmental analysis, more legal stuff at the expense of these 20,000 blue collar jobs which we need right now.

BREAM: And as for the threat from the president, we got a response to from House Speaker John Boehner's office through his spokesman Michael Steel saying "We are working on a bill to stop a tax hike, protect Social Security, reform unemployment insurance, and create jobs. If President Obama threatens to veto it over a provision that creates American jobs, that is a fight we're ready to have." Charles, how do you see that fight playing out?

CHARLES LANE, EDITORIAL WRITER, WASHINGTON POST: Well, I kind of agree with Nina that the Republicans have sort of found a way to kind of counter the advantage that the president was building on the payroll tax, namely, tying it to this Keystone pipeline which we had a poll showing it's a popular -- broadly popular among those who have heard of it.

I guess the president is in this unenviable political situation where he's caught between the labor and the environment. But just to echo something that Charles said, the person who is getting hit in that is Canada. And honestly this is the second issue on which the president has cross swords with our friendly neighbors to the north. The other one being the Buy American provisions in the stimulus. Everyone's forgotten about that but all of that really annoyed Canada because they were going to sell things to the U.S. under the free trade agreement. So, I mean, we talked about Israel at the beginning, but, believe it or not, we have opened a little bit of a breach in our relations with Canada in the last few years.

EASTON: I want to add that when Obama was candidate and he said we need to relook at NAFTA, that didn't go over well in Canada as well.

BREAM: How awkward do you think that meeting was behind closed doors?

KRAUTHAMMER: Well, knowing how polite Canadians are, it probably wasn't awkward. But I think Obama knows exactly what he's done, and I think that Chuck is right. Obama has a talent for alienating and injuring friends, allies, Canada, Israel, the British, and appeasing enemies. And I think it's a pattern that Republicans ought to seize, explain, and run on.

BREAM: Alright panel, thank you very much. That is it for the panel, but stay tuned for a never before seen political ad.

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