By Roberta Rampton and Richard Cowan
WASHINGTON (Reuters) - Republicans in the House of Representatives are insisting that a measure to approve the Keystone XL oil pipeline must be part of a transportation funding bill, a stance that could hobble negotiators sprinting to try to reach a deal on the legislation this week.
Federal funding for transportation projects expires on Saturday. As many as 3 million jobs hinge on the legislation, and failure to pass it would have a direct impact on the economy ahead of the November 6 general election.
Last-ditch weekend talks had yielded glimmers of compromise on some sticking points in the proposed two-year, $109 billion package to pay for road, bridge and rail construction. But the Canada-to-Texas pipeline remains a major hurdle.
"We strongly support responsible highway reforms to cut permitting time in half, reduce duplicative federal programs, and ensure taxpayer dollars are spent wisely, as well as job-creating energy initiatives like Keystone," said Kevin Smith, a spokesman for House Speaker John Boehner.
Senate negotiators have sought to keep Keystone out of the bill, and have discussed ways to hold a separate vote on fast-tracking approvals for the TransCanada project, a senior Senate Democratic aide said.
"We're still hopeful that we can work something out," the aide said.
The Keystone measure has passed in the House four times, but narrowly failed a Senate vote in March.
The White House has said President Barack Obama would veto a bill that overrides his decision this year to block the pipeline, pending further environmental study.
If the Senate and House cannot agree on the broad bill, they will likely push to pass a shorter-term extension of current funding. Boehner had floated a six-month extension this month.
Stop-gap funding would keep construction jobs going, although it may put the brakes on some long-term projects.
During weekend talks, negotiators had considered adding to the highway bill a deal to avoid a July 1 doubling of interest rates for federal student loans.
Democratic negotiators had offered concessions on Republican demands to streamline environmental reviews for certain types of road projects, and also offered a possible compromise to ease proposed environmental regulations for coal ash, a byproduct of coal-fired power plants used in cement.
(Editing by Xavier Briand)