CLIMATE:

In early stages, Obama lets Congress work its will on cap-and-trade bill

President Obama launched the climate policy debate last month with a nationally televised call for Congress to pass a cap-and-trade bill, followed a few days later by proposed emissions limits and a spending plan for the hundreds of billions of dollars in new government revenue generated by the global warming program.

But with a powerful House committee weeks away from circulating a climate change bill, the Obama administration has largely taken a back seat when it comes to sculpting many of that package's key provisions.

"The president proposes, Congress disposes," House Energy and Commerce Chairman Henry Waxman (D-Calif.) said last week. "We're going to obviously follow his leadership. That's obviously going to be a consultative process. But we're going to have to think through all the decisions here as we develop the consensus this year."

White House officials declined to comment on their strategy for the climate debate, though several environmentalists and others outside the administration have offered insight into the Obama team's efforts.

Sources say Carol Browner, the White House's energy and climate czar, has taken the lead in the climate legislative debate with help from staff experts at the different federal agencies.

Also pitching in: Joe Aldy, the former fellow at the nonpartisan Resources for the Future think tank who now works in the White House for both Browner and Obama's economic adviser Larry Summers; U.S. EPA's David McIntosh, a former aide to Sen. Joe Lieberman (I-Conn.); and Jessica Maher, a former staffer to Sen. Bernie Sanders (I-Vt.) now serving as the associate director of legislative affairs for the White House Council on Environmental Quality.

Obama's chief of staff Rahm Emanuel and White House legislative director Phil Schiliro, a former Waxman staffer, are also key players.

"I'd assume Carol Browner, Phil Schiliro and Rahm and others are trying to work with the House and Senate leadership and are trying to figure out how you get this done now that they've laid this down in their budget," said Alden Meyer, policy director at the Union of Concerned Scientists.

Manik Roy, vice president of federal outreach at the Pew Center on Global Climate Change, said the White House group working on the issue should probably be even larger. "I think there's an argument that you'd want the national security team fully engaged as well," he said. "This is our domestic and international climate change policy."

No doubt, the White House has also been on the receiving end of lots of advice. Since January, Browner has met with governors and mayors, foreign environmental leaders and the United Nations' climate chief, Yvo de Boer.

Yet the Obama administration also is short handed. None of the energy and environmental agencies or departments have Senate-confirmed deputies in place, not to mention other political appointees. And many of the White House officials tasked with the climate bill have been pulling double duty on a task force aimed at helping the domestic auto industry. A strategy session between Obama officials and House and Senate Democratic leaders has already been rescheduled several times.

"You can see how that's a lot to ask of a young administration that's still not staffed up," Roy said. "I can understand if they're not able to do it, but it seems to me it presents a tremendous opportunity."

Following the health care model

Obama's budget blueprint leaves no doubt that the new president expects to pass a climate bill. The document includes pledges to curb emissions from 2005 levels by 14 percent in 2020 and by 83 percent in 2050.

Also in the budget is Obama's campaign pledge for a 100 percent auction of the cap-and-trade program's emission credits, with at least $650 billion in estimated new government revenue through 2019. Obama's budget would spend the money to fulfill campaign promises for middle-class tax cuts and the promotion of new "clean" energy technologies.

Roy said he welcomes those details. "Granted, those aren't everything you need to know, but they're a couple of huge elements," he said.

So what's next? At this stage in the debate, there is little talk about Obama actually putting out his own version of cap-and-trade legislation.

"I don't think they're going to present a bill," said Rep. Chris Van Hollen (D-Md.), chairman of the Democratic Congressional Campaign Committee. "I think what the president has said is he's laid out the principles on the table, including the idea of you sell 100 percent of the permits, and then he wants to work with Congress to shape the details in the final legislation."

Van Hollen has proposed a bill adhering to Obama's call for a 100 percent auction, but the lawmaker insisted that his legislation is not an official Obama proposal. "I wouldn't call any particular bill the administration's bill until the administration presents a bill," he said.

Speaking to reporters late last month, EPA Administrator Lisa Jackson said she did not know if Obama would write his own actual climate proposal. And she punted on the cap-and-trade specifics now in front of Congress.

"All of those issues, safety valves, offsets, state role and responsibility are extremely important pieces of any legislative program that may go forward," she said. "And I think by your questions, you're indicating that which everyone at this table would acknowledge, which is that the administration position on those would be very informative to the Hill."

Jackson also signaled that additional administration insight would be on the way. "So, leave it to say that the articulation of those principles, I think it's very important that the administration get it right, and certainly I think that the president and the White House are aware of that, so more to come," she said.

But with Waxman's draft bill expected at the end of this month, some see the administration facing a shrinking window of opportunity. "If they don't put out more details on their vision of cap and trade before Waxman, then it's very awkward for them to do so afterward," Roy said.

Waxman plans to mark up his bill by Memorial Day, and House Speaker Nancy Pelosi (D-Calif.) has committed to a floor vote on the climate legislation this year. In the Senate, Majority Leader Harry Reid (D-Nev.) also plans a floor debate later this summer.

Senate Foreign Relations Chairman John Kerry (D-Mass.) said he is in regular contact with White House officials -- Browner's deputy, Heather Zichal, is the senator's former legislative director -- on the climate debate, going over everything from the U.S. negotiation position for upcoming international talks to the ins and outs of the cap-and-trade bill.

"I think it's going to be very similar to the health care process," Kerry explained. "They know we can't do it if Congress isn't a partner on it. And we know we've got to get their thinking deeply ingrained in it. It's a partnership. That's what it's got to be."

Changing Obama's plans

To be sure, lawmakers have their own priorities. The complexity of the climate bill -- and a potential attached energy measure -- leave plenty of opportunity for Congress and the administration to negotiate as the year progresses.

Congress and Obama must address a raft of details as they prepare a climate bill, including how to control the program's economic costs, what to do about state global warming laws and whether or not to allow fossil fuel sources the right to purchase offset credits as an alternative to their own direct cleanups.

Some want to make the president's plans even stronger. "I think the emission targets frankly could be slightly higher," said Rep. Lloyd Doggett (D-Texas), a senior member of the House Ways and Means Committee.

Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) has warned that Obama should not expect to get his way with a 100 percent auction, saying last week that it "runs the danger or risk of causing a substantial increase in burden" on electric utilities, which would simply pass costs on to customers.

To help find the proper balance of auction and allocation, Bingaman said he supports setting a ceiling and floor for carbon prices -- an approach also advocated by the lead trade group for the electric utility industry, the Edison Electric Institute.

Yesterday, EEI hired Brian Wolff, the DCCC's executive director and a close political adviser to Pelosi, as its new vice president for government affairs and communications (E&ENews PM, March 9).

Rep. John Shimkus (R-Ill.) said he expects Obama to take a back seat to lawmakers, especially the 59-member House Energy and Commerce Committee that many say offers a valid snapshot into the larger political dynamics for the entire House. "My guess is they'll let the committee do the work on this," Shimkus said. "Because there are divergent factions and they'll accept what comes out of the legislative process."

Paul Bledsoe, a spokesman for the National Commission on Energy Policy, echoed Shimkus in predicting that Obama will allow lawmakers to leave their mark on the climate bill. "This is a new Congress," he said. "It's not promulgated this legislation. It needs space to develop it's own identity and approach to these issues, especially given this difficult economy. On policy and political grounds, that's probably a wise choice."

While the White House has been shy about details, Obama press secretary Robert Gibbs defended the president's cap-and-trade approach yesterday after Berkshire Hathaway Inc. Chairman Warren Buffett warned in a cable news interview that regulated utilities would pass the costs of a climate bill on to customers, effectively resulting in a carbon tax.

"In terms of cap and trade, the president and the administration look forward to working with Congress to put a solution together -- a market-based solution that will drive us to energy independence and create a market for -- an even more robust market for alternative fuels and, as I said, the steps that we need to become energy independent," Gibbs told reporters during his daily press briefing. "This is a process that rewards the innovation of the market, a principle that many previously have espoused."

Republicans opposing (and helping?) Obama

Several key Republicans say Obama's early imprint on the climate debate helps the issue politically.

"Having Obama come out as strong as he did in the State of the Union speech does give it some momentum that it didn't have before," said House Energy and Commerce Committee ranking member Joe Barton (R-Texas). "You've got to admit that."

"By him throwing out the mark, I think it allows for a constructive debate where maybe he doesn't get everything he wants and maybe he doesn't intend to get everything he wants," added Rep. Steven LaTourette (R-Ohio), a moderate on climate issues who has previously supported cap-and-trade legislation.

But to date, several moderate Republicans seen as possible Obama allies on a climate bill said the White House has not contacted them yet on the issue. "There's not a lot of reaching out," said Rep. Mark Kirk (R-Ill.). "The door is absolutely open, and if I get an invitation to the White House, I'll be there in 10 minutes."

Rep. Fred Upton (R-Mich.) watched the Super Bowl last month at the White House with Obama, and he also rode on Air Force One to a presidential speech on the economy in a neighboring Ohio district. But Upton said the climate change bill did not come up in either visit with the president, and he also has not heard from Browner. "I haven't had any action or relationship with the new office at all yet," Upton said. "But I expect that there will be some discussions. And that's all I better say now. The wheels are turning, though."

As the debate unfolds, Kirk warned Obama against giving Democratic leaders in Congress too much leeway in writing the climate bill. "I believe that legislation should be written at the White House with strong bipartisan support," he said. "I believe that legislation should not be written in the speaker's office, with no Republican support, which has been the record so far."

Obama also faces obstacles in the Senate. There, some of the very GOP lawmakers he will need to win over say they are not happy that the president linked climate change to the budget proposal.

"I think it's really the wrong approach," said Sen. John McCain (R-Ariz.), Obama's opponent in last November's election. "What it does is it alienates many of us who are for cap and trade but who now see it as being used simply as a way to raise taxes on people and raise revenue for other things. That, I think, is very bad for the country."

Barton, a skeptic on the science linking humans to global warming, said he plans to write an alternative climate proposal that focuses on incentives for industry to curb their carbon emissions without having to face a mandatory cap. He said he is on the lookout for like-minded House Democrats who will help him to sink Obama's global warming agenda.

"There are many, many bills that new presidents have expected to be law that have yet to become law," Barton said. "And I hope this is one of them."