CLIMATE:

Budget reconciliation talk for cap and trade refuses to die

Even as the House and Senate move ahead with budget resolutions that leaves little room for the use of the budget reconciliation process to move climate change legislation, Republicans and even some liberal Democrats are unwilling to close the door on the possible use of the filibuster-proof tactic.

The House Budget Committee late last night cleared a budget resolution that contained reconciliation instructions for health care and education but not for cap-and-trade legislation. The Senate Budget Committee is scheduled to mark up its own budget plan later today that contains no reconciliation instructions whatsoever.

"I don't believe reconciliation was ever intended for this purpose," said Senate Budget Chairman Kent Conrad (D-N.D.), speaking generally of the idea of moving major legislative priorities under reconciliation. "It doesn't work well for writing major substantive legislation."

White House officials and some Senate Democrats have floated the idea of using reconciliation -- allowing Senate passage with a simple majority vote rather than the usual 60 votes -- to move a cap-and-trade for greenhouse gas emissions. But such a strategy lost steam over the last week as Conrad and a number of other key Democrats voiced their opposition.

But while Democrats proclaimed that they were shelving the use of reconciliation to move climate change legislation, several key Republicans maintained that the issue has not been taken off the table entirely because of the mere existence of the reconciliation instructions in the House version.

Senate Budget Committee ranking member Judd Gregg (R-N.H.) said that the exclusion of reconciliation from the Senate version was simply a political gimmick. "We should all as senators be affronted by what is happening on reconciliation," Gregg said.

Brian Riedl, a budget expert with the Heritage Foundation, said the inclusion of reconciliation instructions in the House bill leaves open the possibility for later moving a cap-and-trade bill that is protected from Senate filibuster.

While the House budget resolution's instruction to the Energy and Commerce Committee is designed for health care, Riedl noted that committees have wide latitude to write whatever reconciliation bills they want. That committee also has jurisdiction over cap and trade, and Riedl said lawmakers could simply add instructions to the Senate Environment and Public Works Committee in the budget conference.

Riedl said the only reason the House included reconciliation instructions for any issue is with the Senate in mind. "The whole idea of reconciliation is to prevent the filibuster," he said. "The only reason the House cares about reconciliation is so they can slide it over to the Senate during the conference committee."

House Budget Committee ranking member Paul Ryan (R-Wis.) offered an amendment to strip all reconciliation instructions from the House bill, but that amendment was defeated in a party-line vote. "While the Budget Committee can make assumptions about policies, we cannot bind those committees to certain policies," Ryan said. "These committees are free to do what they choose to do."

While Republicans continued to raise the specter of climate change legislation through reconciliation, a handful of Senate liberals urged Conrad to take exactly such a step.

"If we adopt a cap-and-trade system the way we should it would reduce the deficit, and that's exactly why we have reconciliation instructions," said Sen. Ben Cardin (D-Md.) during yesterday's Senate Budget Committee debate. "I understand everybody has a bad taste in their mouth from budget reconciliation, but if we use it appropriately it gives us the best chance to get the right policy before the United States Senate so that the majority can make those decisions."

Cardin's comments were echoed by Sens. Sheldon Whitehouse (D-R.I.) and Bernie Sanders (I-Vt.), who said that reconciliation was an appropriate way to move such a bill and argued that Republicans attempted to use the tactic to move their own legislative priorities when they were in the majority.

"If reconciliation is such a good idea in order to give tax break to billionaires," Sanders said, referring to previous GOP attempts to alter tax policy through reconciliation, "why is it such a bad idea to provide health care for all of our people or to make this country energy independent?"

Climate reserve funds

Though the House and Senate bills do not currently carry climate reconciliation instructions, both contain a deficit-neutral reserve funds that essentially carve out a space for climate legislation should Congress approve such a bill down the road.

"We have not prejudged a legislative outcome," Conrad said. "We have made it possible for the committees of jurisdiction to do what the president is asking for on climate change, to do what he is asking for on health care, on energy, and education, but all of them would have to be offset."

White House Office of Management and Budget Director Peter Orszag told reporters yesterday that he does not believe the exclusion of climate legislation from the budget resolution hampers the likelihood that it will eventually become law.

"The fact that it's not treated in the budget resolution the same way that we proposed in no way means that the House and Senate can't take the legislation up," Orszag said. "And, in fact, I think some may argue that the political economy of getting climate change done this year may actually be better outside of the -- outside of the budget resolution than inside of it."

Orszag, however, did not close the door on the possible use of reconciliation and Democratic leaders still have the option of moving another budget resolution later in the year that will carry reconciliation instructions.

Prospects for regular order

The Democrats' decision to back down on cap and trade in the reconciliation process -- for now -- prompted some early prognostications on the upcoming regular order debate.

"I think frankly at this point it may be very difficult for us to pass a serious global warming bill if we need 60 votes, that's the bottom line," Sanders told E&E. "Because by the time you've got to that 60th vote, I'm afraid the bill has been watered down to a degree that it may not be able to address the very serious crisis that we have today."

Sanders has taken principled stands on global warming before. In 2007, he voted against cap-and-trade legislation during a Senate Environment and Public Works subcommittee markup, saying the measure from Sen. Joe Lieberman (I-Conn.) and former Sen. John Warner (R-Va.) was not strong enough.

But several Republicans welcomed the move.

"Well, I don't think it had any place at all on reconciliation," said Sen. Arlen Specter of Pennsylvania, a moderate swing vote on the cap-and-trade issue.

Asked to size up a climate bill's chances going forward, Specter replied, "I wouldn't know how to answer whether it improves from what. I think it's going to be tough to do, but I think it's something we ought to do our best to get done."

"It'd create so much animosity that certainly I think it's a prudent move to take it out," added Sen. Bob Corker (R-Tenn.), another possible yes vote for cap-and-trade legislation, though his support comes with many demands.

Corker was less clear whether he thought moving a bill through regular order -- and requiring 60 votes -- would be successful. "From a technical standpoint, certainly from a vote counting standpoint, it doesn't make it more likely," he said. "From a standpoint of reaching a better product, if it's going to pass, certainly it enhances that."

Sen. Judd Gregg (R-N.H.) said he agreed with Orszag's assessment that dropping the reconciliation push could help cap-and-trade legislation. "I think both that and health care have a chance if they go through the regular process," Gregg said.

Senior reporter Ben Geman contributed.

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