George Stephanopoulos, Nate Silver, and Marc Ambinder all seem confused about global warming and budget politics

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"George Stephanopoulos, Nate Silver, and Marc Ambinder all seem confused about global warming and budget politics"

ABC’s George Stephanopoulos wrote an opaque and misleading post on recent news about climate politics and budget policy, “Dems Make Choice: Health Care Over Carbon Caps.” So did Nate Silver at 538.com, “Health Care > Environment? It’s the Economy, Stupid.” So did Marc Ambinder at the Atlantic, “Dems Choosing Health Care Over Cap-N-Trade?

In short, nothing that happened in the last week provides any serious evidence that the Democrats have chosen health care over cap-and-trade — or even that a health care bill will pass before a climate bill (though it may and I hope it does).

Now admittedly, Congressional Democrats’ decision to drop the cap-and-trade from the budget — and the general subject of budget reconciliation — is also opaque. And the Dems haven’t really explained what they were doing or why.

Let me take a shot at both the climate and budget side of things, though I’d be happy if any of the four people in the country who really understand the budget reconciliation process add their thoughts.

The key thing to bear in mind is that a carbon cap possesses two qualities that make it both an unnecessary and poor choice for inclusion in the budget process — it is very complicated, and it is self-financing.

Let’s start with what Stephanopoulos wrote:

When the White House released its budget, I said the president’s effort to reform health care and cap carbon emissions were “scorpions in a bottle” — only one could make it through Congress this year.

This week, the White House and House Democrats made their choice: health care is the survivor.

In fact, they did not make any such choice. They merely dropped the carbon cap from the budget.

As the Wall Street Journal and Washington Post have reported, House Democrats (backed by the White House) plan to write a budget resolution that allows health care to be passed by a simple majority (through the so-called “reconciliation” process) if a bipartisan compromise isn’t reached by September.

Cap and trade will not get the same budget protection, and there are nowhere near 60 votes for it. Keeping it out of the reconciliation process recognizes reality: Congress can’t pass it in the middle of a recession.

I think that last entire paragraph is mistaken. Here’s why.

First, as Wonk Room noted, Congress was not recognizing “reality” (i.e. scientific reality, which of course demands immediate action on global warming). Stephanopoulos tried to fix this in a Twitter (!), (but not in the original blog post), by writing, “Fair point. I should have emphasized ‘political’ reality.” But that still isn’t right.

Second, I’m sure* there are 60 votes for cap and trade. It may not be a cap strong enough to avert catastrophic global warming, and it may look painfully like “the weak, coal-friendly, rip-offset-heavy USCAP climate plan.” But in fact that cap would greatly impress the rest of the world (which loves ripoffsets) and would get us a modest carbon price with 5 or so years.

*The asterisk is for the general caveat that congressional Democrats and the Obama administration don’t seem to have any message discipline on global warming legislation (probably because they don’t have a message to be disciplined about). Famously, you can’t beat a horse with no horse. And the conservatives have a horse — higher energy prices blah, blah, blah (see “Newt Gingrich’s voodoo cap-and-trade economics” and “Hill conservatives reject all 3 climate strategies and embrace Rush Limbaugh — what does that radicalism mean for Obama, progressives, and humanity?“) — which they are beating to death, literally along with pretty much every other species on the planet. So it is possible that the bill that passes would be a purely laughable one. That, of course, is one reason why I have been pushing for delay since “Obama can get a better climate bill in 2010.” But I digress.

Indeed, I see no evidence whatsoever that the Obama administration or Congress has become any less serious about getting a carbon cap mostly agreed-upon this year, and either passed in the late fall or early next year. I also expect the Obama EPA next month to find carbon dioxide is a pollutant that endangers public health, and go about the business of regulating CO2 itself, providing considerable pressure on Congress to act (see “Next stop: EPA’s endangerment finding” and “DC to coal: You are a big danger to public health. Coal to DC: Kiss my ash.“)

Third, and most important for this post, “keeping it out of the reconciliation process” recognizes only that a climate bill never belonged there in the first place. Removing it does not provide any evidence that congressional leaders or the president are any less committed to climate action — only that they don’t want to debate the subject now. I will come back to this.

Let’s see if I can explain why here. You can read the House Rules about reconciliation here. And there is a long story on this whole subject by E&E News (subs. req’d) that has a far more accurate headline than the posts by Stephanopoulos, Silver, and Ambinder, “Dems to shelve fast-track process on cap-and-trade bill, for now,” which I excerpt at length below.

Note: This is an immensely complicated topic so I apologize in advance if I don’t get it all quite right.

There are basically two reasons to get your big policy initiative into the budget that is about to be passed. First, if you are in the budget, then you are basically “paid for,” and when your legislation comes up you don’t need to cover its cost with any offsets — i.e. tax increases, reductions in spending, or reductions in corporate tax benefits and subsidies. Needless to say, those offsets are incredibly unpopular with whatever constituencies they affect.

A major climate bill doesn’t have this problem. It is entirely self financing. The auction revenues from the cap can — and will — be used to reduce taxes on middle and lower income Americans, increase spending on clean energy, and the like.

Health care isn’t self financing so it needs to be in the budget.

Second, if you are in the budget that gets passed, then Congress later can pass a “budget reconciliation” bill that fast-tracks your policy initiative, bypassing many of those pesky rules that slow down bills. In particular, that bill is hard to amend and can’t be filibustered, so it only needs 51 votes to pass. As E&E News puts it:

Under budget reconciliation rules, Democrats could move cap and trade at any point during the legislative calendar under the expedited process that requires only 51 Senate votes. If they take this route, however, the program may not end up looking like its authors intended. The “Byrd Rule,” for one, allows the Senate parliamentarian to strip out any provision that has no budget impact. For something as big as cap and trade, Conrad has said the final product may end up looking like “Swiss cheese.”

Also, as CBS News noted:

measures enacted through reconciliation also are temporary, which is one reason the Bush tax cuts will expire in 2010.

The climate bill has targets for 2020 through 2050, but those would become less than symbolic gestures if passed through reconciliation.

The bottom line is that the climate bill doesn’t need to be in the budget, and it doesn’t belong in the reconciliation process. Most everybody I know knows that, but for some reason they have been reluctant to say so, perhaps thinking that they can still keep the threat of putting it into reconciliation.
Why did Obama put it in the first place? I have no idea whether his advisers thought through this fully, but in any case I think he wanted to show he was very serious about global warming legislation — and he wanted to include the funding for his middle-class tax cut. But frankly, as a matter of messaging, I’d rather see that tax cut directly in the climate bill.

Why are the Democrats bothering to take it out? Because now is an especially bad time to be defending raising energy prices. The Democrats can certainly defend a narrow climate bill later in the year [*see caveat above] — since the net impact on consumers will be close to zero while the benefits are large — but defending raising energy prices as part of defending the whole complicated budget is a bridge too far, particularly for a group as poor at messaging as progressives.

And I repeat, putting the big climate debate off until next year would be a good idea, if combined with a serious energy and climate messaging strategy. And I may get my wish, at least in the Senate, according to one influential Democrat:

“We may have a year or more to work through all this,” said Sen. Mark Pryor (D-Ark.), a member of the “Gang of 16,” a group of moderate Democrats from the Midwest, Rust Belt and West who figure to play a pivotal role in how a cap-and-trade bill is constructed.

Finally, I wouldn’t have minded if the carbon cap were in the budget, since it would have forced Democrats to defend raising energy prices, they would have been pummeled politically because of their general lack of message and message discipline, and perhaps they would realize they need to get their messaging act in order in time for the main event. But that’s just me.

For those who have not gotten their fill of analysis, here are long excerpts from the E&E News story:

Capitol Hill Democrats are expected to bypass the fast-track budget process for global warming legislation but plan to keep the option open later this year if they cannot win bipartisan support on one of President Obama’s signature agenda items….

But a collection of moderate House and Senate Democrats and Republicans have pushed back against that approach and persuaded leadership to shelve the strategy — for now.

“I’ll put it this way: It is not included in the budget that I will present to my colleagues,” Senate Budget Chairman Kent Conrad (D-N.D.) said yesterday on ABC’s “This Week.” “I have said for weeks, I don’t think it is the right way to write substantive legislation, because if you get into the details — and we won’t do that here — it just doesn’t work very well.”

Conrad added, “But what they’re — what they’re talking about … is negotiating leverage, sending a signal that it still remains open.”

House Speaker Nancy Pelosi also is not focused on reconciliation, according to House Natural Resources Chairman Nick Rahall (D-W.Va.). Rahall met last week with Pelosi, Rep. Ed Markey (D-Mass.), Rep. George Miller (D-Calif.), about 10 coal-state Democrats and United Mine Workers Association President Cecil Roberts to discuss coal, climate change and the budget.

Reconciliation came up in the meeting. “But that didn’t take more than 10 seconds,” Rahall said. “The speaker is not worried about that at this point.”

Global warming has rocketed to the top of the Capitol Hill agenda in recent weeks amid talk of inserting cap-and-trade language into a budget reconciliation bill. And some of the very moderate Democrats and Republicans needed to pass the broader authorization legislation have not been pleased.

“I’m a strong supporter of climate change legislation and continue to be,” said Sen. Susan Collins (R-Maine). “But this is a major policy change, and it should not be jammed through using reconciliation. We should have a full debate, and ample opportunity for a lot of different amendments.”

Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) last week urged Democratic leaders to use the reconciliation threat in the same way that lawmakers must take heed of climate regulations from states and cities and U.S. EPA, which has a Supreme Court ruling allowing it to write rules for motor vehicles, power plants and other industrial sources of greenhouse gas emissions.

“My message to my colleagues is we can sit here and stop at what we’re doing now, and allow EPA to do it with the president’s support, allow cities, allow the world to do, allow these regional networks, or we can move forward,” Boxer said. “That’s what I call a reality check.”

Aides to Pelosi and Senate Majority Leader Harry Reid (D-Nev.) said Friday that no decisions have been made on reconciliation. And Jared Bernstein, an economic adviser to Vice President Joe Biden, would not rule out the fast-track strategy on Sunday. “I don’t think he took it off the table,” Bernstein said on ABC. “I think it has to stay on the table. But it’s something we would rather avoid.”

Under budget reconciliation rules, Democrats could move cap and trade at any point during the legislative calendar under the expedited process that requires only 51 Senate votes. If they take this route, however, the program may not end up looking like its authors intended. The “Byrd Rule,” for one, allows the Senate parliamentarian to strip out any provision that has no budget impact. For something as big as cap and trade, Conrad has said the final product may end up looking like “Swiss cheese.”

Democrats for now appear willing to work on cap and trade through regular order, starting with a markup by Memorial Day in the House Energy and Commerce Committee. House floor action and a Senate bill are expected to follow this summer, with advocates optimistic they can win over some GOP support along the way. If not, reconciliation would return as an option.

“We may have a year or more to work through all this,” said Sen. Mark Pryor (D-Ark.), a member of the “Gang of 16,” a group of moderate Democrats from the Midwest, Rust Belt and West who figure to play a pivotal role in how a cap-and-trade bill is constructed.

“I’d hope the Republicans would have a seat at the table,” Pryor added. “I’d hope they’d be there in good faith. At some point, if they’re just going to tear things apart and not build anything, you’ve got to move on. Certainly, I think it’ll be a better bill if you have a lot of Republican involvement.”

What will the budget resolution say?

The reconciliation fight is in some ways a sideshow to the broader budget battle, which is expected to move into a new gear this week with markups in the House and Senate budget committees. Obama wants the nonbinding document to reflect his call for a wide range of priorities, including plans to add hundreds of billions of dollars in new government revenue over the next decade from a cap-and-trade program.

“It’s an economic blueprint for our future — a vision of America where growth is not based on real estate bubbles or overleveraged banks, but on a firm foundation of investments in energy, education and health care that will lead to a real and lasting prosperity,” Obama said in his weekly radio address Saturday.

To make his case for the budget, Obama and the Democratic National Committee last week began reaching out via door-to-door campaigns and some 13 million e-mail addresses collected from last year’s presidential race. The president also plans to personally lobby all week for his budget blueprint, starting today with a White House event focused on energy.

Yet it is still unclear how much the budget resolution that Congress writes will actually reflect Obama’s blueprint and any of his proposed specifics for a cap-and-trade plan. The White House spending plan released last month suggested specific emission targets for 2020 and 2050, a 100 percent auction of emission credits and assumed revenue of at least $650 billion over a decade that could be used for research, development and deployment on new low-carbon energy technologies, as well as tax rebates.

House Budget Chairman John Spratt (D-S.C.) has said he is open to including language establishing a reserve fund for revenue from a cap-and-trade program. Indeed, Senate Democrats did the same thing last year in anticipation of a floor debate over a bill from Boxer and Sens. Joe Lieberman (I-Conn.) and John Warner (R-Va.).

Senate Budget Committee ranking member Judd Gregg (R-N.H.), an opponent of climate language in a reconciliation bill, conceded last week that Democrats would not be out of step in leaving room for cap and trade. “They can do that with a reserve fund, and that’s the traditional way we’ve done it around here,” Gregg said.

But there is plenty of opposition on Capitol Hill — even among Democrats — to getting into any level of specifics on climate change when the fiscal 2010 budget document starts to move.

“This is the parameters,” Rahall said. “And then we put the chairs and the couches and tables in later on.”

Eight Senate Republicans on the Environment and Public Works Committee have already threatened to offer a floor amendment that would strip any mention of climate change in the budget resolution.

Several environmentalists said they welcome inclusion of climate change funding in the budget. But they have not been lobbying Democrats to use the reconciliation process for cap-and-trade legislation.

“If we can avoid a fight and save our resources for the real battle, then it’s certainly in our interest to do that,” said John Mimikakis, a former House Republican staffer on the Science Committee now working on climate policy for the Environmental Defense Fund.

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5 Responses to George Stephanopoulos, Nate Silver, and Marc Ambinder all seem confused about global warming and budget politics

  1. Len Ornstein says:

    joe:

    Almost immediately following “The one debt we must not leave our children”, your treatment above is unbelievable!

    Surely Congress and Obama must ACT soon, in some tangible way, to signal that our contribution to the CO2 hockey stick will begin to be brought down.

    Serious talk about a CO2 tax and/or cap and trade must continue at high levels or that debt WILL be left to our children.

    It may be useful for you to inform us about the ins and outs of “reconciliation rules”, but to seem to imply that letting things drag for another year may be OK, seems to reflect the worst kind of Washington business as usual.

    [JR: Ya gotta read those links people! Nobody is proposing letting things drag for another year. I am proposing taking a variety of steps to stop new coal plants, to jumpstart the transition to clean energy, and, most importantly, to get a better climate deal that we’re going to get this year the way things are currently going.]

  2. BrooksB says:

    Joe,

    Would it be possible for you to find someone to summarize the longer entries of your blog? I often feel like I’m drinking from the proverbial fire hose.

    Every minute spent reading your blog is a minute I’m not doing something else. And that applies to all your readers.

    It’s frustrating because your material plus the comments are incredibly irresistible, informational, inspirational ( and, unfortunately, sometimes very depressing).

    Other ideas for coping with informational overload?

    [JR: Stop watching TV?]

  3. Ben Lieberman says:

    Are there really 60 votes for a cap-and-trade bill (even one with large pieces of candy for dirty energy states)?
    Which of the following will vote for a bill?
    Landrieu?
    Byrd?
    Conrad?
    Johson?
    Brown?

    [JR: Two issues: Who will vote for the bill — and who will vote to continue a filibuster of the bill. I actually think most if not all of those folks will vote for the bill. But if team Obama does the politicking and messaging right — a VERY big if — then the most important thing is to break the filibuster, and I think that is a different vote.]

  4. Jay Fitz says:

    Love your site and the intelligent investigation of the details. As a sailor for the last decade or so and now homesteading on the big island of Hawaii–I’ve always worked robustly to demonstrate lifestyles that were harmonious with a low carbon existence. The website listed links to those exploits. I do believe in many ways that the paralysis in climate change isn’t that people are unaware of where we are going, but rather of what to do. And unfortunately, there are very few out there advocating viable lifestyles that reflect the reality of climate change. I strive to be one, but we need to hear from many more, and it would be valuable if these examples can be brought to the public awareness.

    Thanks.

    Jay FitzGerald.

  5. There is a huge gap between the subtilities of the Washington process (budget reconciliation, cap and trade with ripoffsets, …) and the urgent need to put a price on carbon as advocated by every concerned citizen.
    Can’t we be more straightforward and bold?