Climate Campaign Launches In Congress
AP reports on new House legislation from key chairman Reps. Henry Waxman and Ed Markey: "House Democrats outlined a plan Tuesday to cut greenhouse gases by 20% over the next decade and 83% by mid-century, proposing a speedier ramp-up of emission limits than urged by the White House. But the draft proposal ... leaves to further negotiations one of the most contentious issues: It does not say how pollution allowances would be distributed or whether they will be sold by auction or given away to polluting industries. President Obama has called for auctioning off all emission credits and using the billions of dollars to help people pay for higher energy costs and development of new, more climate friendly energy sources."
WSJ: "In some ways, the draft bill goes farther than even the Obama administration has called for—with ambitious short-term emissions reductions, for example, of 3% in 2012 and 20% in 2020. At the same time, the draft bill gives U.S. industry—which helped shape the bill–much of what it has been clamoring for, from the ability to use 'offsets' to meet some emissions-reductions targets to rebates for industries threatened by higher costs and the prospect of carbon tariffs to knock environmentally-lax trade partners into line."
Grist's Kate Sheppard reports some free pollution permits are expected: "Markey told reporters that the plan would most likely include some free allocations of credits, at least in the initial period, and some auctioning. Revenues from carbon auctions would likely be used for consumer rebates and energy investments, he said, but the bill's authors are leaving the specifics up to committee members."
AmericaBLOG reports on Speaker Pelosi blogger conference call: "Pelosi ... dismissed the criticism of those who say that while we're in an economic crisis, it's not the right time to move forward on energy. She said that is a 'False choice' maintaining the way to fix the economy is to grow the new economy and our reduce dependence on fossil fuel. Pelosi also laid out an aggressive schedule. She hopes to pass the final bill in the House no later than July."
The Atlantic's Marc Ambinder on the pressure generated by potential EPA rules: "The Waxman/Markey bill is written as a replacement, and not a supplement, to EPA rules. As I've written before, the general idea is that an expedited EPA rulemaking process will force business and industry to play ball with Congress. (One positive sign: utilities are reacting cautiously to the bill; the president of Florida Power and Light wrote in a statement that "This discussion draft contains important provisions that will help the country make a full transition to the clean-energy economy of the 21st century - one that will create jobs, strengthen our energy security, and address the threat of global climate change. We look forward to working with Chairmen Waxman and Markey to pass a bill this year.")
LA Times has roundup on enviro org reactions:
Many environmentalists immediately applauded the plan. Frances Beinecke, president of the Natural Resources Defense Council, said in a statement that "Chairmen Waxman and Markey are setting the stage for the strong action on energy and climate we need to move America in a new direction." David Moulton, climate policy director for the Wilderness Society, said the congressmen "deserve high praise for introducing legislation that could break the congressional stalemate that has prevented this nation from tackling the potentially catastrophic challenge posed by global warming."
Other environmental groups' reviews were mixed. Emily Figdor, the federal global warming program director for Environment America, called the draft a "pragmatic bill" with strong clean-energy standards and emission-reduction goals. But, she said, "we're disappointed that the bill includes sky-high levels of carbon offsets, which provide less-certain reductions in emissions, and lavish subsidies, including from ratepayers, for still-unproven carbon capture-and-storage technology."
W. Post looks at fossil fuel state Dems: "Rep. Mike Doyle (D-Pa.), a key swing vote on Markey's subcommittee, said that he welcomed some of the concessions to carbon-dependent regions such as his own district but that he has not decided whether to back the bill ... many Democrats emphasized that they face a greater challenge in the Senate. 'We don't have 60 votes," said Sen. Richard J. Durbin (Ill.), the majority whip in charge of counting votes. In the current environment, Durbin said, there is little hope of passing a climate bill anytime soon, and legislative momentum among Democrats has shifted toward moving health-care reform legislation before a climate plan. 'We still have a long way to go [on climate legislation], but we hope we can get to it,' said Durbin, who supports the bill."
Sierra Club's Carl Pope in HuffPost: "The bill represents a broad outline -- many of the most crucial details will be worked out in legislative negotiations -- but it is an incredibly powerful and hopeful sign ... Coal and oil will not go gently into that good night; they are already fighting back viciously, and the ideologues of the reactionary right will join them. But history demands that America act now."
Climate Progress' Joe Romm gives it a "B+": "It has both a renewable electricity standard for utilities (25 percent in 2025, though “a fifth can be met with efficiency measures”) and an energy efficiency resource standard — two essential provisions for jumpstarting a transition to a clean energy, green jobs economy, while keeping total energy bills low ... [but] it still allows too many offsets — 2 billion, whereas total U.S. GHGs in 2005 were about 7.2 billion tons ... if the bill is written well, rather than seeing new coal plants, we will see a drop in coal consumption as coal is backed out by renewables..."
Get Energy Smart Now!: "it seems that Representatives Markey and Waxman have made the compromises before the bill was even introduced: even though there will be major efforts to weaken the bill when, if anything, it requires significant strengthening."
WSJ examines if lessons were learned from Europe's shaky start: "The draft bill just out of the House will have a better start than Europe’s program, because the Environmental Protection Agency is preparing a registry of industrial emissions ... Another big problem with the European system: It gave away emissions permits, rather than selling them ... On that crucial point, the Waxman/Markey bill is silent ... One other black spot in the European experience has been wildly volatile carbon prices, caused in part by things like over-allocation of permits ... The Waxman/Markey bill aims to beef up market regulations. But the bill’s language just lays out what needs to be done, not how to do it:"
Wonk Room's Ben Furnas smacks false conservative attack: "Conservatives Falsely Assert That Green Economy Legislation Would Impose $3,100 Tax On Families"
Politico reports "Test vote [in Senate] spells trouble for Dems" on climate legislation, yet seven of the eight Dems that previously signed obstructionist letter supported that test vote on a Sen. Barbara Boxer climate amendment.
G-20: Budging Or Fudging?
The Guardian (UK) reports WH Press Sec "paved the way for what is likely to be a fudged compromise, a final communique vaguely addressing Obama's and Brown's wish for more government spending and Sarkozy's call for more financial regulation. He predicted "a very broad agreement on measures that have to be taken to address the global recession".
LA Times on WH optimism: "As Obama advisors see it, the president achieved some measure of success before holding his first meeting this week. Members of the G-20 have adopted economic stimulus plans that, by White House calculations, reflect a total of about 1.8% of gross domestic product for this year."
NYT on Wed AM US-UK press conference: "...Mr. Obama called reports of an international division 'vastly overstated.' Mr. Brown, for his part, promised reporters that French President Nicholas Sarkozy would not walk out of the Group of 20 meeting on Thursday, contrary to threats by French officials. 'Nearly every country engaged here has done a fiscal stimulus,' Mr. Obama said, in what has become one of the meeting’s biggest talking points meant to project unity between the 20 countries assembled. 'We can only meet this challenge together.' Rather than play up their differences, Mr. Obama urged leaders to 'focus on common ground.'"
NYT's Leonhardt expects little now, but takes a long-view: "Given the diminished standing of the United States, Mr. Obama won’t be able to get the Europeans to fall in line behind him this week. But he can still make progress. He and the American delegation can, in gentle terms, ask the Europeans to live up to their own standard — and remind them of their self-interest ... Because the global economy is in many ways integrated, Europe can benefit from American stimulus without pulling its own weight. But because the global economy isn’t completely integrated, European stimulus would still help Europe more than anywhere else. And that presents the American delegation with perhaps its most persuasive case. Right now, Eastern Europe appears to be one of the world’s most vulnerable places ... the leaders of the richer European countries will be asking the world to help Eastern Europe. By all means, the world should help. But Europe should reconsider its part, too."
Obama Budget Reduces Deficit
Economist's View reports on CBPP analysis: "The Center on Budget and Policy Priorities says that, contrary to what you may have heard, the Obama budget 'would reduce federal deficits by about $900 billion over the next ten years compared to current budget policies.' Note also that, relative to their 'realistic baseline,' the deficit is larger in the immediate short-run than the baseline projection (but by enough?), and smaller in the longer run (any truly long-run solution to the budget problem will require us to reform health care and reduce escalating costs)"
The Hill on fractious Republicans: "...when it comes to its own budget, the GOP is splintered. In fact, several House Republicans have suggested they may oppose their party’s alternative that will be formally proposed on Wednesday morning. Meanwhile, Rep. Joseph Cao (R-La.) may buck his party and vote for the Democrats’ budget resolution."
Sen. Judd Gregg (R-N.H) pens dishonest W. Post op-ed attacking Obama budget claiming it "ignores" Medicare when it proposed comprehensive health care reform to cut costs, and making up a "light-switch tax" for "all American families" when the President's plan actually makes companies pay for carbon pollution and directs most revenue to consumers.
Grist's David Roberts debunks the "light-switch tax": "this farcical number is drawn from a 2007 MIT report called "Assessment of U.S. Cap-and-Trade Proposals". Is it an accurate representation of the report's conclusions? PolitiFact researcher Alexander Lane called one of the report's authors and asked. 'It's just wrong,' said John Reilly, an energy, environmental and agricultural economist at M.I.T. and one of the authors of the report. 'It's wrong in so many ways it's hard to begin.'"
Door Open For Simple Majority Rule on Health Care
The Hill reports "Momentum grows among Dems for using rules to avoid filibuster:" "Two possible members of a House-Senate conference committee, which is likely to have the final say on the rules’ use, on Tuesday refused to rule out the use of reconciliation instructions that would include an overhaul of the nation’s healthcare system in a final budget resolution. Separately, President Obama’s nominee to lead the Health and Human Services Department told a Senate panel that using the rules remain on the table."
NYT reports compromise on public health plan option being floated: "Lobbyists and Congressional aides have discussed a possible compromise: Congress would authorize a new government-run insurance program, but it would come into existence only if certain conditions were met — if, for example, private insurers failed to rein in health costs by a certain amount after several years."
Joe Paduda explains "Why a public health plan option isn't anti-competitive: "Opponents complain that the government's market power would allow it to dominate a market, thereby making it impossible for a private plan to compete. The reality today is that almost every market is already dominated by a very few health plans, so much so that in most markets, there really is very little market competition amongst health plans ... If anything, a robust public plan would add competition to many markets, competition that would, if anything, increase consumer and provider choice."
Health Care for America Now's Jason Rosenbaum adds: "the insurance industry is most worried about a strong competitor, a plan that would force them to run leaner operations and (gasp!) keep their customers healthier. Like any business, they are opposing that competition by any means necessary. That doesn't mean we should accept their spin, however. These are inefficient businesses that have gotten away with monopoly power for way too long. It's time they were forced to earn their keep."
Sen. Maj. Leader Reid downplays linking carbon cap revenues to health care funding. The Hill: "Reid told reporters he was not trying to fuel speculation that the emissions-control initiative was going to be used for such a purpose, despite saying at a press conference last week that he would not take the idea off the table. 'I have no big plot,' Reid said. 'I want to do something with education. I want to do something with energy. And I want to do something with healthcare. How to pay for all this — the budget resolution said we have to pay for it. So we're going to have to pay for it. And I don't know how we're going to do that, but we're going to do it.' Reid suggested that the search for a strategy has created the speculation, since Democratic leaders still aren't sure how to fund healthcare reform. When pressed for a definite answer as to whether cap-and-trade revenues could be used for healthcare, Reid said, 'I can't predict.'"
Ezra Klein busts obstructionist illogic: "If Republicans don't want Democrats to use the reconciliation process, then there's a very simple answer: Cooperate to write and pass a health reform bill. If that cooperation never breaks down, then reconciliation will never be used. But if that cooperation breaks to the point that Democrats can't find three Republican votes to overcome the filibuster, then saying reconciliation will break it further isn't a particularly compelling threat."
Stimulus Hitting The Target
USA Today surveys 16 stimulus-funded infrastructure projects: "The early federal stimulus money appears to be hitting its target, paying for new projects and creating jobs. Most early spending is flowing, as planned, into 'shovel-ready' projects — a new bridge over a Louisiana bayou, the widening of a mountain road in Colorado — that wouldn't have occurred this year without stimulus money. ... All 16 infrastructure projects will start this spring or summer."
Obama adviser pushes sustained stimulus. Bloomberg: "'A small fiscal expansion has only small effects' and is a key lesson of the Great Depression, Christina Romer, chairman of the White House’s Council of Economic Advisors, told a Senate Banking subcommittee yesterday. She cautioned lawmakers to 'beware of cutting back on stimulus too soon.'"
More Social Security Bashing
FireDogLake's Phoenix Woman shreds W. Post for using recession to claim SS is in trouble: "What the article doesn't mention is that depletion of the trust fund always happens in a recession. And the one actual side effect here is that the budget deficit's true size will be revealed. Big whoop. When the economy is righted, the problem goes away."
Beat The Press' Dean Baker adds: "While those seeking to cut Social Security benefits are highlighting these new projections, in reality they have very little significance for the program. Under the law, Social Security benefits are paid out of its trust fund. This trust fund has accumulated a surplus of almost $2.5 trillion. The lower projected surpluses for the next few years will have some impact (if the projections prove correct) on the date at which the fund is projected to be depleted, but the projected depletion date will almost certainly be beyond 2040, even after CBO adjusts its numbers for the downturn. Remarkably, this piece alludes to plans to cut benefits without ever noting that older workers and retirees have just lost close to $15 trillion in wealth due to the collapse of the housing bubble and the plunge in the stock market. Presumably this would be an important factor in any debate over reducing benefits."
Banking Plans Hit From Multiple Sides
Joseph Stiglitz rips Obama banking plan in NYT oped: "Only by overpaying for [toxic] assets will the banks be adequately recapitalized. But overpaying for the assets simply shifts the losses to the government. In other words, the Geithner plan works only if and when the taxpayer loses big time. Some Americans are afraid that the government might temporarily 'nationalize' the banks, but that option would be preferable to the Geithner plan. After all, the F.D.I.C. has taken control of failing banks before, and done it well. It has even nationalized large institutions like Continental Illinois (taken over in 1984, back in private hands a few years later), and Washington Mutual (seized last September, and immediately resold). What the Obama administration is doing is far worse than nationalization: it is ersatz capitalism, the privatizing of gains and the socializing of losses."
Robert Borosage in HuffPost calls for a "Grand Inquest on the Financial Crisis:" "We need a grand inquest -- either a special congressional committee or an independent commission like the 9/11 Commission armed with subpoena power -- to expose misbegotten policies, malpractices, and mistaken ideas that allowed the wizards of Wall Street to transport us over the cliff ... serious reform of the banks ... will take new laws, new authority, and most likely more money from the government. That will require public support that can only be engendered by a clear view of what went wrong, by a sense that the most extreme wrong-doers are being brought to justice."
Treasury talks up current criminal investigations. FT: "US authorities have launched more than a dozen criminal investigations into possible fraud involving bank bail-out funds, the special inspector-general for the troubled assets relief programme told Congress on Tuesday ... He said if his oversight efforts dissuaded institutions from taking Tarp money, 'some might take this as a criticism. I do not.'"
Congressional watchdog unhappy with Treasury's lack of TARP transparency. CNN/Money.com: "The officials charged with overseeing the $700 billion financial bailout told lawmakers Tuesday that the Treasury Department must do more to ensure that taxpayer dollars are properly spent and that the public is kept in the loop. The officials were particularly angered about a lack of accounting for the sprawling program, complaining that Treasury didn't make any effort to monitor money that went to the 364 banks its has invested in, despite requests for information by oversight panels. 'Either you get Treasury to get some religion on this point and get some standards ... or Congress [will be] forced to step in,' said Harvard Law professor Elizabeth Warren, chairman of the Congressional Oversight Panel, at a Senate Banking Committee hearing."
Pushback from loan providers pressuring WH to modify small biz loan program. W. Post: "The conditions attached to the program, which require these financial firms to surrender ownership stakes to the government and limit executive pay, are so off-putting that these companies say they will not participate ... An administration official said it is premature to speculate on the program, noting that Obama's team has repeatedly announced the broad outlines of its financial rescue initiatives and then worked out the details later."
WSJ on expected "mark-to-market" rule change: "A new accounting rule set to be approved this week will relax mark-to-market rules for banks sitting on billions of dollars in toxic assets ... banks will have new incentive to keep the assets directly on their books, say bankers. That is because the rule states that banks can use their own judgment on asset values as long as there are no willing bidders to set a market price ... That seems to run counter to the Treasury plan, which could spend up to $1 trillion to remove impaired assets from banks' balance sheets."
Kevin Drum expresses concern that banks will mask problems: "...banks are so good at lying about the quality and value of their assets, we're better off with a system that gives them as little leeway as possible when it comes to recognizing losses. We're should force them to face the music honestly, but then allow a certain amount of capital forbearance during economic downturns. Mark-to-market isn't appropriate for every asset, but it's appropriate for most. It should be watered down as little as possible."
Flat Tax Flat Busted
The Big Money on the failure of the flat tax in Eastern Europe: "Over the last decade, Eastern European countries became darlings of the far right by instituting free-market economic policies designed to break convincingly from their Communist past ... Too bad for them that it hasn't worked out. Latvia, which has a flat tax of 25 percent, and Lithuania and Estonia, which have 21 percent tax rates, are all in deep economic trouble. They all have huge government budget deficits, a sign that they took in too little in tax revenue to cover their costs, primarily state expenditures to provide a generous welfare state"
