EPW Quote of the Week - Geoff Davis June 26, 2009

 “This bill [Waxman-Markey] is nothing more than the economic colonization of the heartland by the coastal states like New York and California.” -Geoff Davis (R-KY) June 26, 2009, U.S. House Floor. Link to YouTube Quote

Razor-Thin House Vote Spells Doom for Cap-and-Tax in the Senate

Senator Inhofe commented Friday on the House passage of the "America's Clean Energy and Security Act," (Waxman-Markey bill) by a vote of 219 to 212. The bill now moves to the Senate where Senator Inhofe vowed to lead the opposition to what he called the "largest tax increase in American history."

"Today's razor thin vote in the House spells doom in the Senate," Senator Inhofe said. "Despite a large Democratic majority in the House, and the fact that this is one of the President's top priorities, the Democratic leadership was forced to do everything possible to get a bill passed. Their slim victory could come at a high price - this is the BTU tax all over again.

"I am pleased to see the entire Oklahoma House delegation stand united in their opposition to the bill. Oklahomans understand the devastating impacts this bill would have on our energy and agricultural industries. In particular, I want to thank Rep. Lucas for his hard work in exposing these costly impacts on the agricultural community.

"The Waxman-Markey bill is just the latest incarnation of cap-and-trade legislation that will destroy American jobs by pushing them overseas, force consumers to shoulder the burden of higher gasoline and electricity prices, and drastically increase the size and scope of the federal government. In the Senate, I have worked with my colleagues to successfully defeat cap-and-trade legislation in 2003, 2005, and most recently in 2008. Now, just a year later, and with the economy in a deep recession, it is hard to believe that many more senators would support legislation that would strangle any hope of economic recovery and impose the largest tax increase in American history."

Related:   

Watch: Boehner Exposes Waxman-Markey "Bureaucratic Nightmare" On House Floor

Examiner: Washington Tries to Raise Your Cost of Living

Climate Plan Faces Challenge After Narrow U.S. House Victory

 

 

The number of skeptics is swelling everywhere

 

 

Republicans Say Proposals Will Hurt Economy; Prospects in Senate Are Murky

 

Watch: China Wins Big with Waxman-Markey - Inhofe Floor Speech

Watch Inhofe Speech on Youtube 

Senator Inhofe delivered a floor speech last week noting that China's resistance to join any international efforts to reduce their carbon emissions will mean any global warming bill signed into law in the US would severely damage the US economy while having a negligible impact on climate.

"The House is preparing to vote on a sweeping energy and global warming cap and trade bill this Friday.  This bill, titled ‘America's Clean Energy and Security Act,' or better known as Waxman-Markey, is the Democrats' answer to the worst recession in decades: a national energy tax-a tax designed to impose economic pain through higher energy prices and lost jobs," Senator Inhofe said. " Or, as a recent Washington Post editorial put it, the bill "contains regulations on everything from light bulb standards to the specs on hot tubs, and it will reshape America's economy in dozens of ways that many don't realize ...'

"Let me say that if the Democrats are having trouble passing this bill in the House, where the majority can pass just about any bill it wants, then there's scarcely any hope for cap-and-trade supporters in the Senate. Remember, that regardless of whatever comes out of the House, Sen. Boxer and Senate Democratic leaders are already vowing to write an even costlier bill.

"I am here to focus directly on the argument advanced by my colleagues, which is that unilateral U.S. action on global warming will compel other nations to follow our lead. As I have documented in speeches before, I think many would find it very troubling indeed to learn that even if you believe the flawed IPCC science, that science dictates that any unilateral action by the United States will be completely ineffective. The EPA even confirmed it last year during the debate on Lieberman-Warner, and the same will hold true for this year's bill. Put simply, any isolated U.S. attempt to avert global warming is a futile effort without meaningful, robust international cooperation. No one disputes this fact. The American people need to know what they will be getting with their money: all cost with no climate benefit. 

"This brings us to the key question of whether a new, robust international agreement can ever be achieved.  In addition to the domestic process ongoing here in Congress, the U.S. is currently involved in negotiations for a new international climate change agreement to replace the flawed Kyoto Treaty.  This process is scheduled to culminate in Copenhagen this December.

"The prospects for such an endeavor look bleak at best.  Following the conclusion of the climate meeting in Bonn recently, the UN's top climate official, Yvo de Boer, said it would be "physically impossible" to have a detailed agreement by December in Copenhagen.  This is ironic to say the least, considering that President Obama was supposed to bring all parties together, to transcend their differences, and to produce a treaty that would save the world from global warming.  But the reality of the cost of carbon reductions has intervened, and now a deal appears, as it always has to me and others, far from achievable." 

Link To Full Speech

 

Inhofe-Pryor Seek Increased Use of Natural Gas and Propane Vehicles

On Thursday, Senator Inhofe joined Sen. Mark Pryor (D-Ark.) to introduce bi-partisan legislation that seeks to increase the production and sale of natural gas and propane vehicles and develop natural gas and propane vehicle infrastructure across the country.  The bill would help reduce the burden of fuel costs for consumers, encourage the development of more environmentally-friendly sources of energy, reduce America's dependence on foreign oil, and strengthen the economy in regions rich in natural gas. 

Senator Inhofe said, "As the nation's number two producer in natural gas production, Oklahomans have a strong appreciation for the versatility of natural gas that is domestic, plentiful, affordable, and clean.  In fact, Oklahoma alone annually produces nearly one-tenth of total U.S. natural gas production. I am pleased, therefore to join with Senator Pryor in introducing legislation which encourages the use of natural gas and propane as a mainstream transportation fuel.  Over the past couple of years, American consumers have been pinched by the economic pain of high gas prices. To address this challenge, we are joining together to introduce legislation that encourages the use of a proven alternative fuel and sends a market signal to manufacturers and consumers that natural gas and propane are a cost competitive alternative. The promise of natural gas and propane as a mainstream transportation fuel is achievable today -- not 15 or 20 years from now."

Sen. Pryor commented, "Natural gas vehicles are more fuel efficient and environmentally-friendly than their gasoline counterparts, but right now their high cost and lack of infrastructure, such as gas stations, make them an unrealistic option for the average American.  The Fueling America Act will make it easier and more practical for people to buy natural gas vehicles."

Devon Energy's Executive Vice President of Public Affairs, Bill Whitsitt added, "Devon strongly supports broader and increased uses of natural gas, which is a clean, abundant and affordable North American energy source. Just as natural gas will be a foundation for our energy future with respect to electricity generation, certainly more use of it as a viable alternative in consumer and fleet vehicles makes sense as well. We support the initiative introduced by Sens. Inhofe and Pryor."

Oklahoma Independent Petroleum Association Chairman, Mike McDonald, said, "Oklahoma exports more than 60 percent of the natural gas produced in our state. As a country seeking to wean ourselves from foreign oil, we should encourage the use of local, plentiful fuels like natural gas for transportation needs. This state's natural gas producers strongly support any initiative promoting the use of environmentally-friendly, economically-viable and domestically-produced natural gas. We appreciate the bipartisan leadership of Senators Inhofe and Pryor in promoting the infrastructure and technologies necessary to see America fully utilize its most abundant and clean-burning energy resource while creating good-paying jobs across the United States in the process."

The Fueling America Act of 2009 provides a consumer tax credit for the purchase of natural gas or propane vehicles as well as a tax credit for the installation of natural gas and propane refueling stations.  In addition, the bill establishes a natural gas and propane vehicle research and development program within the Department of Energy, requires the General Services Administration to study increasing the federal fleet that runs on natural gas or propane, and extends the Clean School Bus Program through 2014. 

Inhofe Comments on TVA Commissioned Report

Senator Inhofe commented Thursday on the findings of the Root Cause Analysis report that details the cause of failure at the TVA Kingston Dredge Pond.

“I believe this independent engineering report brings answers to what happened the night of December 22, 2008.” Senator Inhofe said.   “The findings of this report shed light on the engineering challenges we face surrounding this debate to define coal combustion products.  In fact, the findings of the report bring the debate back to engineering standards instead of waste classification standards.”   

On December 22, 2008 at the TVA Kingston Fossil Plant ash disposal site, Cell 2 failed and released 5.4 million cubic yards of fly ash into the surrounding area. AECOM, a geo-technical engineering firm based in Los Angeles, released their Root Cause Analysis report today.  The findings and analysis were part of a comprehensive six-month report commissioned by the TVA in January 2009.  According to the AECOM report, failure was sudden and complex.   A combination of the existence of an unusual bottom layer of ash and silt, the high water content of the wet ash, the increasing height of ash, and the construction of the sloping dikes over the wet ash were among the long-evolving conditions that caused a 50 year old coal ash storage pond breach and subsequent ash spill at TVA’s Kingston Fossil Plant on December 22, 2008.

“In moving forward with the answer of what caused the Kingston spill, it is clear that the physical structural integrity of surface impoundments needs to be the logical center of the debate and that arguing back and forth about how to classify coal combustion products is not the answer.” Inhofe added. “I believe this report will be an important factor in the ongoing debate.”

Link to AECOM Report

Inhofe Applauds Supreme Court Decision To Clarify the Clean Water Act

Senator Inhofe last week applauded the Supreme Court decision in Coeur Alaska Inc. v. Southeast Alaska Conservation Council. Justice Kennedy wrote for the majority in the Supreme Court’s 6-3 decision, “Today’s final rule clarifies that any material that has the effect of fill is regulated under section 404.”  The Supreme Court reversed a ruling by the U.S. Court of Appeals for the Ninth Circuit that had invalidated a Clean Water Act (CWA) Section 404 permit for the discharge of mine tailings.

“This decision is another positive step in clarifying the reach and application of the Clean Water Act,” Senator Inhofe said.  “The Kensington gold mine will now be able to get ready for production to commence, providing high wage paying jobs and a true economic stimulus to Southeast Alaska. It is imperative that we develop our mineral resources in an environmentally responsible way to ensure our economic and national security as well as provide much needed jobs during these turbulent economic times.”

Letter to CBO Asks About Regional Impacts of Waxman-Markey Bill

In a letter sent last Tuesday to the Congressional Budget Office (CBO), Senator Inhofe asked CBO if, in its recent analysis of H.R. 2454, the "American Clean Energy and Security Act of 2009", it considered the regional impacts of the bill. Senator Inhofe noted that "electricity consumers in relatively less populated Midwestern and Southern states that rely primarily upon coal to generate electricity will suffer greater hardships from the program than consumers in populous, natural gas burning and hydro-powered states on the West Coast and in the Northeast, which might actually receive a windfall under the formula

Full text of the letter below:

June 23, 2009

Douglas W. Elmendorf,

Director Congressional Budget Office

U.S. Congress Washington, DC 20515

Dear Director Elmendorf:

Thank you for the recent analysis you prepared on the potential effects on households of the cap-and-trade program that would be implemented pursuant to H.R. 2454, the American Clean Energy and Security Act of 2009, as reported by the House Committee on Energy and Commerce on May 21, 2009.

In your analysis, CBO acknowledged that "estimates of the average net cost to households under H.R. 2454 do not reveal the wide range of effects that the cap-and-trade program would have on households in different income brackets, different sectors of the economy, and different regions of the country." On the Environment and Public Works Committee, we have members from the Midwest (Missouri, Ohio, Minnesota), South (Tennessee, Louisiana), Great Plains (Oklahoma), Mountain West (Idaho, Wyoming, Montana, New Mexico), West Coast (California, Oregon) and Northeast (New Jersey, Delaware, Maryland, Vermont, Rhode Island, New York, Pennsylvania).  We are very interested in analysis of the regional impacts of this legislation.  Indications from analysis of the allocation formula in H.R. 2454 are that electricity consumers in relatively less populated Midwestern and Southern states that rely primarily upon coal to generate electricity will suffer greater hardships from the program than consumers in populous, natural gas burning and hydro-powered states on the West Coast and in the Northeast, which might actually receive a windfall under the formula.

With these issues in mind, please answer the following questions: Will the distributional effects of H.R. 2454 vary significantly by region of the country? 

Did CBO analyze the regional disparities of H.R. 2454, and if so please provide that analysis.

Thank you in advance for your response to these questions. If you have any questions please contact Tom Hassenboehler of the Environment and Public Works Committee, (202) 224-6176.

Sincerely,

James M. Inhofe

Ranking Member

Senate Committee on Environment and Public Works

Hearing Statement: The Impacts of the Expected Highway Trust Fund Insolvency

Senator Inhofe delivered the following statement Thursday morning at an EPW Committee hearing on the impacts of the expected highway trust fund insolvency:

I’m very pleased we are having this hearing today.  This is a critical issue.  We recently learned that the Highway Trust Fund will run out of money some time before August of this year, and will require an infusion of $5 to $7 billion to get through the rest of fiscal year 2009.  In addition to the funds required for 2009, $8 to $10 billion will be required for 2010.  This amount will be higher if an extension longer than 12 months is enacted.  

It is critical to fix this shortfall.  Failing to do so will delay planned and ongoing road projects and result in people being laid off.  This would be unacceptable any time, but more so during today’s economic downturn. 

Oklahoma’s Secretary of Transportation, Gary Ridley, has notified me that if we fail to fix the Trust Fund Oklahoma and most other states will not have the cash to honor infrastructure projects that have already reached agreement.  As a result, my state will be forced to deprogram between $50 and $80 million in projects.  This will be done by cancelling new projects and existing contracts that have already been signed, in addition to slowing down projects that have already broken ground.  Clearly this would have a detrimental effect on the economy and will negate any gains made by the stimulus—which as I’ve said before, dramatically under invested in infrastructure.

This must be prevented.  The good news is the Administration announced yesterday they were committed to fixing this within the next 6 weeks.  They also proposed an 18 month extension.  I think the reality is that since we don’t have a way to pay for a long-term bill, an extension is probably in order.

This Monday there was a meeting between the bipartisan leadership of the 3 authorizing committees in the Senate (EPW, Banking, and Commerce) and the Administration.  The Senators at the meeting were unanimous in their desire to have a clean, long-term extension, which would include a Trust Fund fix.  This is good news, because it cuts down the likelihood of it getting bogged down in policy fights.     

There are a number of ways to fix the Trust Fund shortfall.  We fixed a similar shortfall last year by remedying a wrong that was done in 1998 when $8 billion paid by road users was transferred from the Trust Fund to the General Fund.

But TEA-21 actually made 2 negative changes to the Trust Fund in 1998: the first being the $8 billion transfer from the Trust Fund to the general fund that was restored last September and the second ended the long-standing practice of crediting the Trust Fund with interest on its cash balances.

Repaying the Trust Fund for lost interest would result in about $13 billion in cash.  If interest were also paid on the $8 billion that should have been sitting in the trust fund, the lost interest would amount to about $17 billion.      

According to the Congressional Research Service, every other major trust fund is credited with interest on cash balances: from Social Security to the Airports and Airways Trust Fund.  In fact, I am not aware of any other trust fund that is not credited with interest on cash balances.

It was wrong to stop crediting the Trust Fund with interest.  Correcting this wrong would be sufficient to prevent Trust Fund insolvency.

The bottom line is that I’m confident that Congress will fix the Highway Trust Fund shortfall.  How we do it is yet to be determined–the interest approach is just my preference. 

Hearing Statement: Nominations Hearing

Last week, Senator Inhofe delivered the follow statement at the hearing on the Nominations of Paul Anastas and Colin Scott Fulton:  

Good morning.  We are here today to consider two nominations for the Environmental Protection Agency: Colin Scott Fulton to be General Counsel and Paul Anastas to be Assistant Administrator for the Office of Research and Development.  I want to welcome both of you and your families here today.

I am looking forward to working with you.  There are many challenges ahead for EPA, and I am confident that both of you possess the knowledge and experience to address them with balance, competence, and, just as important, transparency. 

On that last point, transparency, I would hope that each of you will treat requests for information from the minority of this committee the same as those from the majority.  And I hope that you will fulfill Administrator Jackson’s commitment to maximize public participation and input on the decisions you make.

Thus far, I think the Agency has more work to do to meet Administrator Jackson’s commitment.  I have sent several requests for information, including, most recently, a request that EPA re-analyze the economic impacts of Waxman-Markey.  I sit here today wondering whether EPA will provide me and my staff with this and other information.  This state of affairs does not conform to the stated pledges of Administrator Jackson and other nominees who have appeared before this committee.

In addition to transparency, I hope that you will consider all view-points so that your decision-making reflects a truly national perspective, accounting for regional differences.   One thing that concerns me is that, though the Obama EPA has highly competent and experienced nominees, they tend to hail from one part of the country.   I do not see much, if any, regional diversity at the Obama EPA. I have said this at prior nominations hearings and I am growing more concerned.  Not only are most EPA appointees from the East Coast, most, if not all, are from urban centers. I am deeply concerned that we have an EPA team with little direct knowledge of the middle of the country. What is good for the East Coast is not necessarily good for the rest of the United States.   

EPA is grappling with policy decisions that could have serious impacts on Rural America—though I don’t believe Rural America has a voice in the current Obama EPA.   I hope the nominees will assure me today that they will reach out to rural communities for their perspective on the important issues facing the agency.  What you do at EPA is important to Oklahomans, Ohioans, Tennesseans, Minnesotans, and to other states and regions of the country.  To be successful in formulating policy, to make it work for everyone, you must factor these view-points into your decision-making. 

Finally, I want to repeat a simple principle that I have been advocating for my entire political career:  we need to balance environmental protection with concern for how decisions affect the economy—and the people who run this great machine called America.   Achieving this balance, as well as broadening the agency’s geographical focus in decision-making, will be essential to achieving the mission of EPA.   

Hearing Statement: Impacts of Mountaintop Mining on Surface and Groundwater Resources

Senator Inhofe read testimony at an EPW Hearing on the Impacts of Mountaintop Mining on Surface and Groundwater Resources.

Full text of testimony below:

I would like to thank Subcommittee Chairman Cardin and Ranking Member Crapo for holding today’s hearing on the impacts of mountaintop mining on surface and groundwater resources and other indirect impacts in Appalachia.  

I also want to welcome Randy Huffman, Cabinet Secretary for West Virginia’s Department of Environmental Protection, as well as the other witnesses testifying today.  I look forward to your testimony.  And it’s great that so many residents from West Virginia traveled to see this hearing in person.  Whatever side of the issue they’re on, it’s good to see so many citizens engaged in the political process.

I want to emphasize today the importance of maintaining and protecting America’s natural resources.  Federal clean water laws should be followed and enforced for the citizens of this nation, especially those in Appalachia.  This is a fundamental value we all share.  Yet it is not the only value to be considered: ensuring the economic viability of Appalachia, and the families who live there, is equally important.  I believe these two values are complementary.  Put another way, environmental protection can coexist with job creation and economic prosperity for families. 

I’m not sure this view is acceptable among environmental activists.  For them, coal is evil and must be banned, no matter the cost to families in Appalachia and states that depend on it for jobs, for schools, and for energy security.  

I should also note that I’m somewhat concerned by the infighting among Democrats when it comes to coal.  As an example, just look at the Memorandum of Understanding on mountaintop mining between the EPA, the Army Corps of Engineers, and the Department of the Interior.  Now some, such as myself, are concerned the MOU could mean economic hardship for Appalachia.  But consider the views of radical global warming activists, such as NASA scientist and Obama supporter James Hansen.  Hansen recently criticized President Obama for the MOU.  Here’s what he said:

“The Obama administration is being forced into a political compromise. It has sacrificed a strong position on mountaintop removal in order to ensure the support of coal-state legislators for a climate bill… Coal is the linchpin in mitigating global warming, and it’s senseless to allow cheap mountaintop-removal coal while the administration is simultaneously seeking policies to boost renewable energy.”

Mountaintop mining has also provoked serious battles within the Obama Administration.  Consider this: the LA Times recently reported on a “shouting match in which top officials from two government agencies were heard pounding their fists on the table...”  But that’s not all.  Let me quote again from the LA Times story:

“Although environmentalists had expected the new administration to put the brakes on mountaintop removal, [Rep. Nick] Rahall [D-W.Va.] and other mining advocates have pointed out that Obama did not promise to end [mountaintop mining] and was more open to it than his Republican opponent, Arizona Sen. John McCain.” 

A review of Obama's campaign statements, according to the LA Times, shows that Obama had “expressed concern about the practice without promising to end it.”  

This gets even more interesting.  The Times notes that mountaintop mining “is politically sensitive because environmentalists were an active force behind Obama's election, and the president's standing is tenuous among Democratic voters in coal states.”  Moreover, the Times writes, “Obama needs support from local lawmakers for an energy agenda that would further regulate home-state industries, but halting mountaintop mining could eliminate jobs and put upward pressure on energy prices in a time of economic hardship.”

So, it seems the Administration and its supporters in the environmental community can’t make up their minds about coal and mountaintop mining.  It’s not hard to understand why.  Those “local lawmakers” the LA Times refers to, who are concerned about the future of their communities, are Democrats.   Coming from Oklahoma, I would say that Democrats in my home state and in places like West Virginia tend to see coal and energy differently than, say, Speaker Pelosi, Henry Waxman, or the Obama Administration.  They tend have practical, rather than ideological, views about coal and energy. 

As they see it, coal provides jobs and secures livelihoods for families.  Coal also is a source of reliable, affordable electricity that powers the economies of West Virginia, Ohio, and much of the nation.  Banning coal or sharply curtailing its use makes no sense to people who rely on it every day of their lives.  They can’t understand why Democrats in Washington and their friends in the environmental movement think coal is the root of all evil.  When they see the likes of the Waxman-Markey global warming bill, which would destroy thousands of good-paying jobs for hard-working people, or comments from the Secretary of Energy that “coal is my worst nightmare,” or from Vice President Biden, who vowed on the campaign trail that there would be “no coal plants here in America,” they scratch their heads and wonder whether such opinions are grounded in reality.

As the Democratic leaders in Washington are preparing for the debate tomorrow on the disastrous Waxman-Markey bill, and as they continue to fight over whether coal should be banned, diminished, or remain central to the nation’s energy policy, the 77,000 hard-working people in Appalachia who work in the mining industry are wondering whether they have job security.  

My sincere hope is that the Democrats here in Washington can stop arguing about coal and listen to local officials from the heartland.  Those officials—again, many of them Democrats—do not want to abandon the Clean Water Act and the protections it provides to the families who live, work, and play in their communities.  They want clean water and they should get it.  But at the same time, they want the recognition that their economic livelihoods matter just the same, both for their communities and for the nation.

Policy Beat: Waxman-Markey and 1993

As the House prepares to vote on the largest tax increase in American history, otherwise known as the Waxman-Markey bill, and as President Obama tries to persuade his House allies to vote for same, EPW Policy Beat took another trip down memory lane.  We landed in 1993 as the House was voting on the Al-Gore-backed BTU tax.  As we and others have stated before, the historical and political parallels between the BTU tax and Waxman-Markey are striking: members fearful that voting for an energy tax would have political repercussions at the ballot box; members fearful of voting for a bill that would then die in the Senate; members fearful that an energy tax would be regressive, harm consumers, destroy jobs and slow economic growth; members fearful of a man named Gore pushing an energy rationing scheme that harms the heartland; and Democratic congressional leaders and Administration officials (read: Gore) desperately searching for exemptions and last-minute deals to shore up support.  As the proverb goes, “the more things change, the more they stay the same.” 

The following excerpts speak for themselves:

•  “Energy Tax Hits Consumers More Than Oil Firms,” Los Angeles Times, May 27, 1993: “Seeking to regain his populist footing, [President] Clinton complained that oil producers were ‘trying to wiggle out of their contribution to deficit reduction’ by seeking to strip the energy tax from his budget plan.  But a close look at the proposed energy tax -- now at the center of the congressional debate over Clinton's program -- shows that it was not designed by the Administration to soak Big Oil, but to hit consumers.”
• “Parties and Elections in America,” by Lois Sand Maisel and Kara Buckley: “Today’s members of Congress remember all too well how House Democrats were persuaded by [President Bill] Clinton to support an electorally unpopular position for the sake of their president’s agenda.  Democrats in the House uneasily went on record in support of a controversial new energy tax (the BTU tax), as part of Clinton’s 1993 economic plan, only to see Clinton drop the proposal when it was clear he did not have support of Democrats in the Senate.  Many of those House Democrats who reluctantly voted for the BTU tax bill were left vulnerable going into the 1994 elections, the historic mid-term elections in which Republicans took control of Congress.” 
•  Former Clinton Budget Chief Leon Panetta: “We were pushing the House of Representatives to adopt this budget with the BTU tax. The votes that we're grabbing at that point are basically saying to us -- and these are some of the conservative votes -- "The last thing I want to vote for is that BTU tax. But if I vote for it, you damn well better stick with it in the Senate. Don't you dare sell out on that issue on the Senate side, because then you're going to screw us.” (http://www.pbs.org/wgbh/pages/frontline/shows/clinton/interviews/panetta2.html)
• Grist Magazine: “The House passed a budget bill with the BTU tax in it without any Republican support, but it was later dropped in order to get the overall budget plan through the Senate.  Republicans then bashed Democrats who had voted for the tax, using the issue effectively in the 1994 elections, which resulted in the first GOP House majority in 40 years. Republicans this year are banking on using the climate bill the same way, putting pressure on freshmen Democrats and those in vulnerable seats.” (http://www.grist.org/article/2009-05-15-gore-rallies-grassroots/)
• Tax History Project: “To increase support for the tax, the formal administration proposal -- part of the administration's first budget -- contained several provisions to provide relief to powerful constituencies. The version of the B.T.U. tax that squeaked its way through the House was even more complex and had more special rules than the administration plan.”  (http://www.taxhistory.org/thp/readings.nsf/ArtWeb/5DDB79194769C2BF852574D5003C28D5?OpenDocument 
•  “Overcoming Political Barriers to Reform in Energy Policy,” by Josh Busby:  “In the first proposal of the Btu tax, coal and natural gas were taxed at the same rate, even though coal is more polluting. This was a way to avoid incurring the wrath of West Virginia Senator Robert Byrd. The Clinton administration made a tactical mistake by then modifying the plan in April 1993 to further appease coal interests. Once this move had been made, other interests piled on in an effort to seek exemptions from the tax while the oil and gas industry opposed it outright. Even though the House voted in favor of the remnant of the Btu tax, influential Democratic senators like David Boren of Oklahoma and John Breaux of Louisiana vigorously opposed it, and the Clinton administration withdrew it before a vote.” 

Policy Beat: Speaker Pyrrhus

As House Democratic leaders scramble to find 218 ‘ayes’ for Waxman-Markey, EPW Policy Beat hit the books to find the appropriate historical analogy for today’s (or tomorrow’s) vote.  As with the vote on the BTU tax in 1993, Speaker Pelosi and Chairman Waxman likely will achieve victory on their massive energy tax, but by the barest of margins.  And in fulfilling their green vision for national energy policy, they could very well imperil the political fortunes of moderate Democrats in conservative and rural districts, and hence, their majority.  In other words, the victory will be costly.  It will be, in short, a Pyrrhic victory—so named after King Pyrrhus of Epirus, whose army, during the Pyrrhic War, suffered irreplaceable casualties in defeating the Romans in two key battles. 

So we consulted Plutarch for his historical account of King Pyrrhus and his unfortunate victories.  According to Plutarch, after his victory, Pyrrhus lamented, “If we are victorious in one more battle with the Romans, we shall be utterly ruined.”   In the spirit of Pyrrhus, Speaker Pelosi appears to be traversing down the same path to ruin.  And with mid-term elections in 2010 looming on the horizon, voting for an energy tax could provoke the same backlash that occurred in 275 BC.  Again, Plutarch: “For he had lost a great part of the forces with which he came, and all his friends and generals except a few; moreover, he had no others whom he could summon from home, and he saw that his allies in Italy were becoming indifferent, while the army of the Romans, as if from a fountain gushing forth indoors, was easily and speedily filled up again, and they did not lose courage in defeat, nay, their wrath gave them all the more vigor and determination for the war.”  As George Santayana once said, “Those who cannot remember the past are condemned to repeat it.”

 

In the News . . . Chicago Tribune: Too Big, too Fast

Chicago Tribune

Editorial: Too Big, Too Fast

June 25, 2009

Remember that gargantuan climate change bill we told you about last week? It's gotten bigger. Over the weekend, the bill grew from 946 pages to 1,201 pages, according to the Sunlight Foundation. It's still changing, with important amendments in flux.

But Democratic leaders in the House say they'll push for a vote on the bill as early as Friday. They think they can pass it.

This is an incredibly expensive undertaking. If anyone in Congress tells you that he has read and completely understands this bill, and can explain exactly how the system to reduce carbon emissions would work and what its effects would be, he's lying.

Democratic leaders need to slow down. This proposed legislation would affect every American individual and company for generations. There's a huge amount of money at stake: $845 billion for the federal government in the first 10 years. Untold thousands of jobs created -- or lost. This requires careful study, not a Springfield-style here's-the-bill-let's-vote rush job.

This page has supported many of the principles in the bill. It would curb carbon pollution, a key to global warming, through a system known as cap-and-trade.

It would work this way: The government would set a limit or cap on large sources of carbon dioxide pollution such as coal-fired utility plants and refineries. Companies would buy or be given a certain number of permits, or credits, to pollute a specific amount over a year. If a plant emits less pollution, the owners save some of the credits. Those can be sold to other plants that aren't so clean or ambitious. The idea is to build market flexibility into a system that gradually reduces pollution and arrests global warming.

Over time, the limits ratchet down, the air clears and, with some luck, the worst effects of climate change are averted.

We've had some reservations about the huge costs in this proposal. Some of those costs would be passed on to consumers in the form of higher energy prices. That's a tough sell, particularly in an economic downturn.

We're encouraged that a new Congressional Budget Office study found that those increases would be relatively small and easy to manage. The study concluded that the cap-and-trade program would cost the average American household $175 a year in higher energy costs by 2020. But with rebate provisions, some low-income households would get lower energy bills, by $40 a year by 2020, the study said.

Another major sticking point: The U.S. can do a lot to reduce its carbon output, but can't do it all. America won't have much impact on global warming if China, India and other major polluters don't follow suit and dramatically reduce their own pollutants.

The bill's sponsors are still trying to resolve questions over whether and how to impose sanctions on countries that do not limit emissions. That's crucial. Those foreign countries would enjoy a cost advantage in manufacturing if their industries were free to pollute, while American industries picked up the tab for controlling emissions.

Let's hear how lawmakers plan to do that -- and a lot more detail about this bill. If the House votes this week, it will not be an informed vote.

At a news conference Tuesday, President Barack Obama endorsed the measure, calling it "extraordinarily important."

After all these years of arguing over climate change, the United States must act. But not in haste.

The Democrats need to delay the vote. Otherwise, House members should vote no.

In the News . . . Oklahoman Editorial: Cap and Trade Bad Deal for U.S.

The Oklahoman 

Editorial: For What? Cap and Trade Bad Deal for U.S.

June 26, 2009

News reports say House Speaker Nancy Pelosi has pulled out all the stops to pass cap and trade legislation, scheduled for a vote today or tomorrow. Pelosi will have to get it done without U.S. Rep. Dan Boren's vote and, we suspect, the votes of a number of other conservative Democrats. Good for them.

Boren, D-Muskogee, and others won't help pass what effectively would be the largest tax increase in U.S. history - and for little or no actual benefit. Pelosi and her allies represent districts so liberal that kind of a vote doesn't matter. It does in real-world America.

Under cap and trade, the government sets limits for greenhouse gas emissions across the economy. Businesses under the caps could sell emissions credits to those over them. Over time caps are lowered to reduce emissions of carbon dioxide and other gases.

Various estimates say it would cost the economy $9.4 trillion by 2035. A CRA International study found 3.2 million jobs would be lost by 2025, even with new "green" jobs. The same study showed the average U.S. household's purchasing power would drop by $2,127 by 2030.

Pelosi & Co. want to increase the cost of fossil-fuel use so Americans will use less of it. The economy will be saddled, jobs will be lost and Americans' standard of living will slide.

For what? For minuscule reductions in global temperature, even as China and India run their economies full bore!

Pelosi might get her victory.

Thank goodness for the U.S. Senate.

In the News . . . Strassel: The Climate Change Climate Change

The Wall Street Journal

The Climate Change Climate Change

By Kimberley A. Strassel

June 26, 2009

Steve Fielding recently asked the Obama administration to reassure him on the science of man-made global warming. When the administration proved unhelpful, Mr. Fielding decided to vote against climate-change legislation.

If you haven't heard of this politician, it's because he's a member of the Australian Senate. As the U.S. House of Representatives prepares to pass a climate-change bill, the Australian Parliament is preparing to kill its own country's carbon-emissions scheme. Why? A growing number of Australian politicians, scientists and citizens once again doubt the science of human-caused global warming.

Among the many reasons President Barack Obama and the Democratic majority are so intent on quickly jamming a cap-and-trade system through Congress is because the global warming tide is again shifting. It turns out Al Gore and the United Nations (with an assist from the media), did a little too vociferous a job smearing anyone who disagreed with them as "deniers." The backlash has brought the scientific debate roaring back to life in Australia, Europe, Japan and even, if less reported, the U.S.

In April, the Polish Academy of Sciences published a document challenging man-made global warming. In the Czech Republic, where President Vaclav Klaus remains a leading skeptic, today only 11% of the population believes humans play a role. In France, President Nicolas Sarkozy wants to tap Claude Allegre to lead the country's new ministry of industry and innovation. Twenty years ago Mr. Allegre was among the first to trill about man-made global warming, but the geochemist has since recanted. New Zealand last year elected a new government, which immediately suspended the country's weeks-old cap-and-trade program.

The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. -- 13 times the number who authored the U.N.'s 2007 climate summary for policymakers. Joanne Simpson, the world's first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak "frankly" of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming "the worst scientific scandal in history." Norway's Ivar Giaever, Nobel Prize winner for physics, decries it as the "new religion." A group of 54 noted physicists, led by Princeton's Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists' open letter.)

The collapse of the "consensus" has been driven by reality. The inconvenient truth is that the earth's temperatures have flat-lined since 2001, despite growing concentrations of C02. Peer-reviewed research has debunked doomsday scenarios about the polar ice caps, hurricanes, malaria, extinctions, rising oceans. A global financial crisis has politicians taking a harder look at the science that would require them to hamstring their economies to rein in carbon.

Credit for Australia's own era of renewed enlightenment goes to Dr. Ian Plimer, a well-known Australian geologist. Earlier this year he published "Heaven and Earth," a damning critique of the "evidence" underpinning man-made global warming. The book is already in its fifth printing. So compelling is it that Paul Sheehan, a noted Australian columnist -- and ardent global warming believer -- in April humbly pronounced it "an evidence-based attack on conformity and orthodoxy, including my own, and a reminder to respect informed dissent and beware of ideology subverting evidence." Australian polls have shown a sharp uptick in public skepticism; the press is back to questioning scientific dogma; blogs are having a field day.

The rise in skepticism also came as Prime Minister Kevin Rudd, elected like Mr. Obama on promises to combat global warming, was attempting his own emissions-reduction scheme. His administration was forced to delay the implementation of the program until at least 2011, just to get the legislation through Australia's House. The Senate was not so easily swayed.

Mr. Fielding, a crucial vote on the bill, was so alarmed by the renewed science debate that he made a fact-finding trip to the U.S., attending the Heartland Institute's annual conference for climate skeptics. He also visited with Joseph Aldy, Mr. Obama's special assistant on energy and the environment, where he challenged the Obama team to address his doubts. They apparently didn't.

This week Mr. Fielding issued a statement: He would not be voting for the bill. He would not risk job losses on "unconvincing green science." The bill is set to founder as the Australian parliament breaks for the winter.

Republicans in the U.S. have, in recent years, turned ever more to the cost arguments against climate legislation. That's made sense in light of the economic crisis. If Speaker Nancy Pelosi fails to push through her bill, it will be because rural and Blue Dog Democrats fret about the economic ramifications. Yet if the rest of the world is any indication, now might be the time for U.S. politicians to re-engage on the science. One thing for sure: They won't be alone.

In the News . . . Tilting at Green Windmills

Tilting at Green Windmills

By George F. Will

Thursday, June 25, 2009 

The Spanish professor is puzzled. Why, Gabriel Calzada wonders, is the U.S. president recommending that America emulate the Spanish model for creating "green jobs" in "alternative energy" even though Spain's unemployment rate is 18.1 percent -- more than double the European Union average -- partly because of spending on such jobs?

Calzada, 36, an economics professor at Universidad Rey Juan Carlos, has produced a report that, if true, is inconvenient for the Obama administration's green agenda, and for some budget assumptions that are dependent upon it.

Calzada says Spain's torrential spending -- no other nation has so aggressively supported production of electricity from renewable sources -- on wind farms and other forms of alternative energy has indeed created jobs. But Calzada's report concludes that they often are temporary and have received $752,000 to $800,000 each in subsidies -- wind industry jobs cost even more, $1.4 million each. And each new job entails the loss of 2.2 other jobs that are either lost or not created in other industries because of the political allocation -- sub-optimum in terms of economic efficiency -- of capital. (European media regularly report "eco-corruption" leaving a "footprint of sleaze" -- gaming the subsidy systems, profiteering from land sales for wind farms, etc.) Calzada says the creation of jobs in alternative energy has subtracted about 110,000 jobs elsewhere in Spain's economy.

The president's press secretary, Robert Gibbs, was asked about the report's contention that the political diversion of capital into green jobs has cost Spain jobs. The White House transcript contained this exchange:

Gibbs: "It seems weird that we're importing wind turbine parts from Spain in order to build -- to meet renewable energy demand here if that were even remotely the case."

Questioner: "Is that a suggestion that his study is simply flat wrong?"

Gibbs: "I haven't read the study, but I think, yes."
Questioner: "Well, then. [Laughter.]"

Actually, what is weird is this idea: A sobering report about Spain's experience must be false because otherwise the behavior of some American importers, seeking to cash in on the U.S. government's promotion of wind power, might be participating in an economically unproductive project.

It is true that Calzada has come to conclusions that he, as a libertarian, finds ideologically congenial. And his study was supported by a like-minded U.S. think tank (the Institute for Energy Research, for which this columnist has given a paid speech). Still, it is notable that, rather than try to refute his report, many Spanish critics have impugned his patriotism because he faulted something for which Spain has been praised by Obama and others.
Judge for yourself: Calzada's report can be read at http://tinyurl.com/d7z9ye. And at http://tinyurl.com/ccoa5s you can find similar conclusions in "Yellow Light on Green Jobs," a report by Republican Sen. Kit Bond, ranking member of the Environment and Public Works Committee's subcommittee on green jobs and the new economy.

What matters most, however, is not that reports such as Calzada's and the Republicans' are right in every particular. It is, however, hardly counterintuitive that politically driven investments are economically counterproductive. Indeed, environmentalists with the courage of their convictions should argue that the point of such investments is to subordinate market rationality to the higher agenda of planetary salvation.

Still, one can be agnostic about both reports while being dismayed by the frequency with which such findings are ignored simply because they question policies that are so invested with righteousness that methodical economic reasoning about their costs and benefits seems unimportant. When the president speaks of "new green energy economies" creating "countless well-paying jobs," perhaps they really are countless, meaning incapable of being counted.

For fervent believers in governments' abilities to control the climate and in the urgent need for them to do so, believing is seeing: They see, through their ideological lenses, governments' green spending as always paying for itself. This is a free-lunch faith comparable to that of those few conservatives who believe that tax cuts always completely pay for themselves by stimulating compensating revenue from economic growth.

Windmills are iconic in the land of Don Quixote, whose tilting at them became emblematic of comic futility. Spain's new windmills are neither amusing nor emblematic of policies America should emulate. The cheerful and evidently unshakable confidence in such magical solutions to postulated problems is yet another manifestation -- Republicans are not immune: No Child Left Behind decrees that by 2014 all American students will be proficient in math and reading -- of what the late senator Pat Moynihan called "the leakage of reality from American life."