Obama Rejects Keystone XL Pipeline Permit

WASHINGTON (CN) - President Barack Obama has denied a permit for the Keystone XL pipeline, saying that it was not in the national interest at this time.

As part of an end-of-session deal with congressional Republicans, Obama agreed to make a decision on the controversial pipeline within 60 days if they voted to extend payroll tax cuts, which were about to expire, for two months.

Obama said, in a memorandum to Secretary of State Hillary Clinton, that his decision was based on her recommendation and the State Department's view that 60 days was not enough time to properly assess the impact of the pipeline. The State Department had previously said that given the complexity of the pipeline, it would need at least until 2013 to properly review the application which was first submitted by TransCanada in March 2008.

The decision put Obama in an uncomfortable position between two factions of his base: labor unions, which support the pipeline, and environmentalists, who oppose it.

Republicans, including Speaker of the House John Boehner, made no secret that they would use a rejection of the pipeline against Obama during this year's presidential election.

Boehner wasted no time, saying in a press conference that the president had "broken his promise" to do anything he could to create jobs and that the decision was "shipping American energy security to the Chinese."

"The president's policies are making the American economy worse rather than better," Boehner said.

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