Declare Inside Select Statement?

I have a need to execute a cursor inside a select statment, but I'm having problems figuring this out. The reason this need to be inside a select statement is that I am inserting the cursor logic into a query expression in PeopleSoft Query.

So! Here's the statement that works:

======================
DECLARE @fixeddate datetime
DECLARE @CVG_ELECT char(1)
DECLARE @Effdt datetime
DECLARE EFFDTS CURSOR FOR
SELECT Z.EFFDT, COVERAGE_ELECT
FROM PS_LIFE_ADD_BEN Z
WHERE Z.EMPLID = '1000'
AND Z.EFFDT <=
GETDATE()
AND Z.PLAN_TYPE = '20'
ORDER BY Z.EFFDT DESC
OPEN EFFDTS
FETCH NEXT FROM EFFDTS INTO @Effdt, @CVG_ELECT
WHILE @@FETCH_STATUS = 0
BEGIN
if @CVG_ELECT <> 'E'
break
ELSE
SET @fixeddate = @Effdt
FETCH NEXT FROM EFFDTS INTO @Effdt, @CVG_ELECT
END

CLOSE EFFDTS
DEALLOCATE EFFDTS
PRINT @fixeddate

======================
If I execute this in SQL Query Analyzer it gives me the data I am looking for. However, if I try to paste this into a select statement, it goes boom (actually, it says "Incorrect syntax near the keyword 'DECLARE'.", but you get the idea).

Is it possible to encapsulate this inside a select statement?