Climate Bill Moves To Mark-Up Today
"The House Energy and Commerce Committee planned to begin work [today] on legislation that, for the first time, would limit the emissions blamed for global warming ... The House Energy committee wants to complete work and vote on the climate and energy bill by the end of the week.": AP
The Hill reviews the head-count: "... the important number is 30 – the number of votes [Rep. Henry Waxman] needs to get his cap-and-trade bill out of committee ... Rep. G.K. Butterfield (D-N.C.) is expected to offer his endorsement of the bill ... Rep. Mary Bono Mack (R-Calif.) has warned GOP leaders they can't count on her as an automatic 'no.' ... four key swing votes – Rep. John D. Dingell (D-Mich.), Rep. Rick Boucher (D-Va.), Rep. Bart Gordon (D-Tenn.), and Rep. Mike Doyle (D-Pa.) – negotiated a deal with Waxman on renewable electricity standards ... Rep. Diana DeGette (D-Colo.) ... is leaning toward voting for the bill, according to an aide ... Members still considered to be on the fence late last week included Rep. John Barrow (D-Ga.), Rep. Betty Sutton (D-Ohio), Rep. Jim Matheson (D-Utah) and Rep. Gene Green (D-Texas). The votes of Matheson and Barrow could be particularly important for the bill even after it gets out of committee, as they are the chairman and vice-chairman, respectively, of the conservative Blue Dogs' energy task force."
LA Times plays up role of Alcoa and Duke Energy lending corprate support to the compromise
NYT's Paul Krugman: "The legislation now on the table isn’t the bill we’d ideally want, but it’s the bill we can get — and it’s vastly better than no bill at all."
CQ details the compromise regarding allocation of pollution permits:
The bill would give away the vast majority of emissions allowances to industries and states, in a departure from President Obama’s proposal to auction them. The Union of Concerned Scientists estimates that each percent of the allowances will be worth $750 million a year in 2020, based on a projected allowance price of $17 per ton.
In the early years of the program, the government would auction 15 percent of the allowances and use the proceeds to help the public with higher energy costs. Of the remaining allowances, well over half would be distributed to industry. At the same time, the bill says allocations to local electric distribution companies — 30 percent of the total — would be passed on to consumers in the form of lower prices. The allowances “shall be used exclusively for the benefit of retail ratepayers of such electricity,” the bill says. Natural gas distribution companies would receive 9 percent of the allowances for a similar purpose, and states would receive 1.5 percent to benefit users of home heating oil. Daniel J. Weiss, senior fellow at the Center for American Progress Action Fund, said the public will still benefit, even though many of the allowances would go to industry. “It’s a different means to accomplish the same end,” he said.
Coal-fired utilities would receive additional allowances, beginning at 2 percent of the available allowances and rising to 5 percent, to install and operate carbon sequestration technologies. Merchant coal generators in deregulated markets would receive 5 percent. The automobile industry would receive 3 percent of allowances to invest in electric vehicles and other advances. The bill would distribute 15 percent of the allowances to trade-sensitive manufacturing industries, such as steel and cement, and 2 percent to oil refiners. The allocations would adjust from year to year, and all free allowances to industry would phase out over time, beginning in most cases after 2025.
The bill would distribute 1 percent of the total for universities and other research centers to develop clean energy. But this falls short of what many renewable-energy advocates in Congress say is needed. “What this means is that we’re going to have to continue to use other sources of money to fund research, development and deployment of clean energy technologies,” Weiss said.
Will CBO Accurately Score Health Care Reform?
The CBO hasn't rendered an official verdict on health care reform this time around, because, officially, there's still no plan on which to render a final verdict. But the CBO began producing preliminary projections about three weeks ago, based on rough proposals that congressional staff have submitted. And, according to several sources familiar with the estimates, the news isn't quite what Obama and his allies were hoping to hear.
The good news for reformers is the CBO's determination that expanding health-insurance coverage would cost a lot less than many outside experts had predicted. Instead of a politically daunting $1.5 trillion, the CBO figures the price tag will be closer to $1 trillion, at least under certain parameters. But the reason for the lower estimate is a bit unsettling. Even with a requirement that everybody obtain insurance--a so-called individual mandate--the CBO assumes a that between a quarter and a third of the uninsured still woulnd't have coverage. That would leave the country short of universal coverage, the goal Obama and his allies have repeatedly cited.
Other preliminary judgments from the CBO are causing more consternation. To help defray the cost of expanding coverage--and to help make medical care more affordable generally--reformers have proposed creating electronic medical records, studying which treatments work best, and taking other steps that would make the business of health care more efficient while cutting down on unnecessary medical treatments. The CBO is less optimistic these moves will save money. What's more, the CBO may determine that, for accounting purposes, the money individuals spend on health insurance--or, at least, some portion of it--should count as part of the public revenue stream. That would give critics more grounds for labeling the Democrats' plan a costly expansion of government.
If that judgment sounds familiar, that's because it is. The CBO took nearly the same positions back in 1994--a fact not lost on either the White House or congressional leaders, who have communicated their concerns publicly and privately. One apparent purpose of bringing industry leaders to meet Obama this week was to showcase the potential for cutting costs; see, the administration seemed to be signaling, even the health care industry thinks it can save money by becoming more efficient. But it will take more than such appearances to move the CBO ... it's an open question whether the CBO takes skepticism too far--and whether such a super-strict reading of the evidence really serves the public interest.
NYT details areas of agreement between "leading Democratic senators" on health care, but "they have not resolved the politically explosive question of whether to create a public insurance program, to compete with private insurers."
NYT's Paul Krugman plants his flag: "For me the make-or-break issue is whether the legislation includes a public plan"
On Fox News Sunday, Sen. Min. Leader Mitch McConnell embraces private insurance lobby argument that private companies somehow can't compete: "...the private insurance people will not be able to compete with a government option."
On CNN's State of the Union OMB Director Peter Orszag downplays rift with hospitals and insurers over cutting costs, and says on possible congressional move to pay for health care reform by limiting employer-based coverage tax benefits, "Let's see where they wind up."
Financial Market Reform Coming Soon
Congress will next month start the biggest regulatory overhaul of the US financial system in decades, bringing into the open a frantic lobbying effort between banks, regulators and policymakers on what it contains and who pays for it. The House financial services committee, chaired by Democrat Barney Frank, will hold hearings early in June ... say people familiar with the timetable. But ... one key pillar – a resolution authority allowing a regulator to seize a failing bank holding company – is not likely to be put in place until year-end.": FT
Mixed signals from FDIC on replacing bailed out bank CEOs. Bloomberg: "[FDIC Chair Sheila Bair was asked] 'Do you think some will be replaced in the next couple of months?' Bair replied, 'Yeah, I think there will be an evaluation process. We’re requesting it as part of the capital plan and yes.' The FDIC released a statement after the interview, characterizing Bair’s comments ... 'She did not refer to CEOs specifically,' according to the statement. 'Bair also did not suggest the federal government will remove the bank CEOs.'"
W. Post on expected end of accounting trick that fueled housing bubble: "...firms placed trillions of dollars in loans in the financial equivalent of self-storage facilities. They were not required to disclose the contents or maintain capital buffers against potential losses. By allowing firms to expand lending without increasing capital, the practice increased profits. But it left firms ill-prepared to absorb losses as defaults rose ... The Financial Accounting Standards Board ... is scheduled to vote this morning to prohibit the practice as of the beginning of next year."
"A long-stalled effort to guarantee American workers paid sick days takes a big step forward Monday with the introduction of legislation by Congressional Democrats ... The bill, the Healthy Families Act, would be binding on employers that had 15 or more workers. It would guarantee employees one paid hour off for each 30 hours worked, enabling them to earn up to seven paid sick days a year. They would be entitled to claim their days when they or a child, a parent, a spouse or someone else close to them became ill ... the liberal Center for Economic Policy and Research plans to issue a report on Monday, 'Contagion Nation,' which finds that the United States is the only industrial nation where workers are guaranteed paid sick leave for neither short-term nor long-term illness.": NYT
CQ reports commission to investigate financial crisis will only be able to issue bipartisan subpoenas: "The House is expected to clear legislation Monday aimed at combating financial fraud and establishing an independent commission to study the causes of the financial crisis ... On the evening of May 14, the Senate, on a unanimous consent motion, quietly agreed to a relatively small change to the bill and sent it back to the House. The Senate change would require GOP approval before the new commission could issue subpoenas. If the House agrees to the change, it would send the bill to President Obama for his signature."
Labor Update
CQ gets mixed assessments on prospects for labor law reform: "...Harkin indicated last week that Specter’s hard-and-fast stance on the card check language is softening. 'He’s willing to negotiate,' Harkin said. 'Things are being done both at the staff level and at the member level.' Among the alternatives being discussed, according to congressional aides and experts on labor policy, are establishing finite time windows for secret-ballot elections to take place once ordered; establishing a mail-in ballot process by which the National Labor Relations Board could not only certify but also monitor elections, thereby preventing employer interference; and the idea of 'last, best offer' negotiations, where an arbitrator would choose between a union’s offer and that of an employer in setting the terms of a contract ... Although several key undeclared Democrats — including Dianne Feinstein of California, Mark Pryor of Arkansas and Jim Webb of Virginia — say they have been working with Harkin and others to find a middle ground, not all are optimistic about the prospects."
GM looking to take US taxpayer funds to ship jobs overseas. NYT: "General Motors is engaged in negotiating a reorganization that could increase vehicle imports from its plants in Mexico and Asia while closing factories and cutting the work force in the United States. That approach drew a sharp rebuke from the United Automobile Workers union on Friday. In a letter to each member of Congress, the U.A.W. ... argued that to qualify for more government assistance, the auto giant should be required 'to maintain the maximum number of jobs in the United States.' The administration, however, appears to accept the proposition that to return to profitability as quickly as possible, G.M. must import a significant percentage of cars from its plants in low-wage countries, like Mexico and China, or low-cost countries, like Japan."
Terrance Heath contributed to the making of this Breakfast
