ENERGY POLICY:

How combat wins the day in Washington -- even when compromise is in reach

It was a bipartisan proposal that sparked the interest of the two most influential players in official Washington: cutting U.S. oil demand through tax incentives for vehicles fueled by natural gas.

House Speaker John Boehner (R-Ohio) pointed to the natural gas plan as an example of a "bite-sized chunk" of achievable energy reform. "Why wouldn't we have a bill to encourage vehicles to use natural gas and do it by itself?" he asked at a news conference.

Twenty days later, President Obama hailed the broad across-the-aisle support for the vehicles measure. "Getting 150 members of Congress to agree on anything is a big deal," he said in a high-profile speech.

But that was March -- and four months can make all the difference in a capital where bipartisanship and compromise are no longer the assets they once were. In an era of perpetual electioneering and well-organized pressure campaigns from both right and left, controversy can easily trump compromise, even when wide-spread agreement seems well within reach.

That discord is often lawmakers' most palatable political option may not be surprising. Democrats and Republicans alike talk about cleaning up the environment and promoting clean energy, but they can differ dramatically on how to do it and where to set priorities.

"On energy, beyond all the talking points and the way the issues are framed, there really is an ideological difference between the way conservatives and liberals think about it," said Heritage Action for America CEO Michael Needham, among several right-leaning activists who have pried 14 GOP co-sponsors off the natural gas vehicles bill.

In Needham's energy-policy nexus, liberals aim to create incentives for "new technologies to be viable in a way they're not viable today," while conservatives view the market as the best determinant of viability and focus mainly on increasing supply of fuels.

That vision is likely to leave most Democrats wanting, as it leaves out the tradeoffs between environmental protection and energy production that have driven the biggest wedge between the parties in recent years. But environmentalists do not disagree that the fundamental partisan gulf on their issues is widening, particularly given the divided government set up after Republicans took the House in 2010.

"If [Rep. Henry] Waxman [D-Calif.] -- or, more likely, [Sen. Jeff] Bingaman [D-N.M.] -- got into a position to likely do something," that legislative product would be tugged further to the right during conference talks with the House majority, Sierra Club global warming and energy programs director Dave Hamilton said.

"[T]his has been the quandary all along ... anything they do, if they're going to actually get it through Congress, is destined to be meaningfully degraded," he added.

The natural gas vehicles proposal's chief sponsor, Rep. John Sullivan (R-Okla.), in a concession to critics, has halved its time horizon and removed a mandate that was included in previous versions. He continues to tout the bill's bipartisan profile, telling a Tulsa audience last week that his is "the only energy bill today that can pass the House, the Senate and be signed into law by the president of the United States."

But such optimism is contradicted by the cool response of GOP leaders in the wake of conservative resistance to carving out new tax benefits for one energy sector at a time when existing breaks for ethanol and other fuels are under attack.

"I'm not a co-sponsor of his bill, but it certainly merits discussion," House Energy and Commerce Chairman Fred Upton (R-Mich.) said last month, "and we'll be doing that as we look at a hearing [in the] fall."

Sullivan and his Democratic allies on the issue, who made the natural gas vehicle credits part of their "Make it in America" jobs agenda, had said that House floor action could happen as soon as this summer.

"I've never seen a bipartisan bill that shrinks the size of government," said Chris Chocola, the former Indiana House Republican who leads the fiscal conservative group Club for Growth, which wields enormous influence in GOP primaries and has often gone after Republicans who it deems not pure enough on key policy questions. "Just because it's bipartisan doesn't mean it's good policy -- in fact, most times it gets to the lowest common denominator."

One week after Boehner's March nod to the natural gas vehicles bill, Chocola's and Needham's groups joined more than two dozen others in March to call for a broad repeal of all industry-specific energy subsidies and a moratorium on new ones (E&E Daily, March 18). The conservatives' entreaty made few headlines at the time but caused a ripple effect now reaching the White House doorstep, as the Senate canceled its recess this week to dig in on a debt limit deal that now hinges partly on whether Republicans will accept revenue raised by rolling back ethanol and other energy tax breaks.

Even as he announced the upper chamber's high-stakes scheduling shift -- ostensibly to give Congress extra time to hammer out a compromise -- Majority Leader Harry Reid (D-Nev.) underscored the political upside of partisan combat by blasting the GOP.

"Republicans are willing to risk our economy to protect tax breaks for owners of corporate jets, yachts and oil companies," Reid said. "Average Americans are struggling to afford gas for their cars."

All about the money

Much of the force tugging lawmakers to their ideological corners on energy policy comes down to dollars, both those spent by special interests and those disbursed in dwindling amounts by U.S. EPA and other federal agencies.

Asked if Congress' current paralysis on big-ticket energy issues could ease following the 2012 elections, the Sierra Club's Hamilton pointed to the corporate campaign finance spigots opened by the Supreme Court's Citizens United decision as creating "a phantom opponent" that would continue to encourage more extreme positions.

In the past, he said, swing votes could be won over by polls that showed support for environmental protections. "Now they know that no matter what they do, no matter what the public thinks, no matter what the state of play on an issue is, they're going to face millions of dollars of ads framing that issue to the opposite of where they want to be," he added. "So they have to play toward that criticism, not toward public opinion."

On the other side of the spectrum, conservatives see potent grass-roots energy that can be harnessed to help tar certain policies -- such as the natural gas vehicles bill, or ethanol supports -- as generated by special interest lobbying cash.

"[W]ith some very large lobbying [investment] by people who'd benefit, they got substantial bipartisan support for Washington picking a winner," Needham, of Heritage Action, said about the natural gas legislation. The resulting criticism from the GOP base, he added, is "very unusual."

Of course, foes of the vehicles bill have exerted significant lobbying pull of their own to help dim its prospects. Energy giant Koch Industries has aligned with conservative activists to slam the bill as a market-distorting subsidy, sparking politically charged pushback from GOP and Democratic co-sponsors alike (E&E Daily, May 16).

Fiscal motivations also polarize lawmakers during the appropriations season, which lately appears never-ending amid a constant clamor over how deeply and how fast to cut the federal budget. Such slashes often hit energy and environmental programs hard, most recently during the winter-long fight over fiscal 2011 spending that saw the House GOP's opening bid take a $3 billion bite out of EPA and more than $1 billion from the Energy Department (E&E Daily, Feb. 19).

The ultimate compromise on that front, forged minutes before a slated government shutdown, knifed $1.6 billion from EPA and as much as $1.4 billion from DOE. Democrats ultimately declared victory, however, because the deal averted GOP-backed policy riders that would have limited EPA authority (E&ENews PM, April 12) -- though those could come up again during negotiations over raising the debt ceiling.

Weighing the outcome of that spending battle, League of Conservation Voters legislative director Tiernan Sittenfeld questioned the very wisdom of framing policy compromises as a worthwhile goal.

"The environment, especially during the Bush years, has been starved for funding for so long," Sittenfeld said. "So I think that just saying, 'Compromise, let's split down the middle' doesn't make sense, since there have already been too many compromises."

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