* Republicans insist on road project spending reforms
* Keystone pipeline not seen as part of a short-term bill
* House, Senate negotiators asked to "redouble" efforts
By David Lawder and Roberta Rampton
WASHINGTON, June 19 U.S. congressional leaders
failed on Tuesday to break a deadlock on a long-stalled
transportation funding measure, and Republicans now may need to
find a new legislative vehicle to carry their plan to approve
the controversial Keystone XL oil pipeline.
With a June 30 deadline for new transportation funds
looming, many lawmakers and aides now see it as inevitable that
the controversial Canada-to-Texas pipeline provision be removed
to make way for a short-term extension of current transportation
House of Representatives Speaker John Boehner and Senate
Majority Leader Harry Reid could not resolve differences in a
late afternoon meeting over the road, bridge and rail bill that
could create or save millions of jobs and give a lift to the
struggling U.S. economy.
"Hope springs eternal," Boehner, the top Republican in
Congress, quipped as he left his office in the Capitol.
Failure to reach a deal in Congress could trigger layoffs of
nearly 3 million U.S. construction workers and increase
unemployment less than six months before the November elections.
HOPES DIM FOR FULL BILL, KEYSTONE
Republican Representative Ed Whitfield, one of the
negotiators trying to iron out House-Senate, said he feels that
a short-term extension of current transportation funding is
unavoidable at this point, and neither the Keystone pipeline nor
a Republican provision aimed at ensuring that coal ash can
continue to be used in cement for road projects would be
Whitfield said both provisions have been rejected by
Democrats, adding, "It's really disappointing that we couldn't
get this resolved."
But Republican House Transportation Committee Chairman John
Mica said Boehner and Reid instructed negotiators "to redouble
our efforts," and the Democratic-led Senate had offered a new
proposal. He declined to comment on any discussions of a
temporary extension, which would be the 11th since the most
recent transportation bill expired in 2009.
"We're going to take it hour by hour, see if we can get the
job done," Mica said.
Michael Steel, a spokesman for Boehner, said House
negotiators were still working towards a joint bill.
"We believe it is crucial that we have real reforms in how
we spend taxpayers' highway dollars, and we continue to support
bipartisan jobs initiatives like Keystone," Steel said.
President Barack Obama has opposed fast-tracking approval
for TransCanada Corp's Keystone XL oil pipeline project
until an environmental review of its new route is completed.
The House lawmaker who authored the pipeline provision,
Nebraska Republican Lee Terry, also said it is now unlikely to
be part of a short-term, stopgap funding extension.
"He doesn't see it happening at this point," a Terry aide
told Reuters, noting Terry continued to work with Boehner to see
what other legislative vehicles could be used to advance
approval for the oil pipeline.
A Senate Democratic aide said the Keystone provision might
have another chance if lawmakers complete a highway bill this
summer or autumn.
Republicans would "explore every option," for Keystone, said
Whitfield, including attaching it to spending needed to keep the
government running in the new fiscal year that starts on Oct. 1.
Many observers believe that Obama will approve Keystone
sometime after the election, possibly in 2013. But House
Republicans are not ready to take that on faith, said Garrett
Golding, an analyst with The Rapidan Group, a Washington-based
"They really want the security blanket that legislative
approval would bring," said Golding, who until recently was a
policy advisor to the House Energy and Commerce Committee.
DOWN WITH FLOWER BEDS
Deep differences still remain on core parts of the
House Republicans have insisted on consolidating some
federal transportation programs and streamlining environmental
reviews of road projects in order to speed up their
construction. They also want to drop a proposal to use gasoline
taxes to help pay for ancillary transportation "enhancements"
such as flower beds and other streetscape improvements.
Earlier this month, Boehner floated the idea of a six-month
extension of current funding, which would remove the threat of a
halt in road and rail construction until after the Nov. 6
Democrats have balked at that idea, saying it would deplete
the Highway Trust Fund because falling gasoline tax collections
were insufficient to fund current projects.
They say U.S. states also would delay the start of new
longer-term projects - and the hiring of hundreds of thousands
of workers - due to the lack of funding certainty.