In his final State of the Union address, President George W. Bush urged the expansion of clean energy technologies, both internationally and domestically. He also pushed for an international agreement on climate change, urging all major economies to sign on to a post-2012 treaty. What implications will the speech have on congressional action on climate and energy this year? During today's OnPoint, E&E Daily senior reporters Ben Geman, Dan Berman, and Darren Samuelsohn preview the year ahead for cap-and-trade legislation, the fiscal 2009 budget and renewable energy tax incentives.
Monica Trauzzi: Welcome to OnPoint. I'm Monica Trauzzi. Joining me today for a reporters roundtable are E&E Daily senior reporters Ben Geman, Darren Samuelsohn, and Dan Berman. Guys, thanks for coming on the show.
Darren Samuelsohn: Thank you.
Monica Trauzzi: The president delivered his final State of the Union address this week and he focused predominantly on the economy and earmarks, but he also did mention energy and climate briefly. What was the overall reaction that you were hearing after the speech about his comments on climate and energy?
Darren Samuelsohn: A lot of the Democrats were just happy that this was Bush's last speech before the nation, in front of Congress. So they were thinking ahead to what's going to happen? Who is the next president? Who's going to be speaking? I mean Hillary Clinton, Barack Obama were both in the audience sitting a couple of rows away from each other. So that was sort of the overall theme. Bush didn't really put anything forward new, major new announcements. Most people didn't expect him to do that. Most presidents, in their last State of the Union, really don't try and stretch too far.
Ben Geman: Yeah, I mean the reaction on energy issues, because they were mentioned to some degree, but there were no, as Darren mentioned, big initiatives put forward. So there wasn't a huge amount to react to. And I think to some extent that reflects the fact that to the extent that there were large agreements to be made with the Bush administration, those were reached last year with last year's energy bill.
Monica Trauzzi: Well, why did the president decided to go this route? Why not say more in particular about the climate issue when there's so much international pressure on the U.S. and this administration to get something moving on that front?
Darren Samuelsohn: Well, I guess the proposals that he has put forward to this point kind of do set a course for where we're going for the next year and the next years after President Bush leaves office. Really, for him to put anything forward significantly new would kind of really shake things up and is really not where he's willing to go or where he wants to go. So he just kind of recounted, in a sentence, very boiled down, boilerplate stuff, what happened in Bali a couple of weeks ago, in Indonesia, where the whole United Nations process is going. So it wasn't really an opportunity and I don't think Congress really wanted to hear him go into the details of international cap-and-trade legislation.
Monica Trauzzi: And Ben, an energy law passed at the end of last year and it was difficult to come to a consensus on that. Is there any room for more action on energy looking ahead to 2008?
Ben Geman: I would think probably very little. I mean if you look at the large energy bill that passed at the end of last year, there was a big section on auto mileage standards and of course a very big section on increasing the amount of ethanol and other biofuels production. And to the extent that there were sort of big opportunities to come to an agreement with the administration, this sort of already happened last year with that bill. So, certainly you're going to see Democrats continuing to raise things that they wanted to be on that bill that were ultimately jettisoned. But to the extent that there's sort of another big energy compromise coming down the pike, I think that would be rather unlikely. For example, Democrats have wanted to repeal a lot of oil industry tax breaks, but those ran into huge problems, both among Republicans and a White House veto threat. So, I don't see a huge amount of space for anything like that or perhaps something like a renewable electricity standard. And, for that matter, to the extent that you've got Democrats and perhaps environmentalists and renewable energy advocates pushing for those things, I think that they're looking in the not-too-distant future when, by many accounts, you'll see more Democrats in the Senate with the '08 races and, of course, perhaps a Democrat in the White House as well.
Monica Trauzzi: With the tax incentives that are expiring at the end of this year for renewable energy, is that something that you see being extended?
Ben Geman: That is one area where I do think you'll see action. I mean the renewable energy tax credits for wind and solar and geothermal and some other types of renewables that do expire at the end of this year, those are quite popular actual a across the aisle. The reason they didn't happen at the end of last year was not because there was opposition to the renewable credits themselves, but because the Democrats and a few Republicans wanted to largely offset the cost with these higher taxes on oil companies. So, that's what ran into big problems. Now, you're seeing a push by now some senators to have very quick action on extending those tax credits, at least for a limited period of time, very quickly this year. And the reason is because the renewable energy industries are saying that, look, investment is already starting to slow down a little bit, so we need to act quickly. One vehicle that's been identified is this pending economic stimulus package. The White House and the House came to an agreement on a stimulus that does not include extensions of the credits, but you've got some Senate lawmakers like Maria Cantwell pushing for that. If it doesn't happen on that, I think at some point this year we'll see at least a short-term extension of those credits. I don't think they're going to let them lapse again.
Monica Trauzzi: Dan, your coverage focused on the president's comments on earmarks.
Dan Berman: Right.
Monica Trauzzi: How is this going to impact the year ahead in legislation?
Dan Berman: Well, that's really the trillion dollar question. President Bush announced that today he's going to issue an executive order on earmarks essentially saying in order for an earmark to be valid it has to be in the actual bill language and not in the conference report where Congress traditionally puts the earmarks. One appropriations cardinal I spoke with said this will essentially just make the bills longer because they'll just put everything from the report right into the bill. The other thing is President Bush, once again, threatened to veto any spending bill that doesn't cut the number of earmarks and the amounts of dollars of earmarks in half in each spending bill. This kind of sets up the fight that we saw last year where President Bush repeatedly issued veto threats for the spending bills and it resulted in the omnibus bill at the end of the year. If President Bush is going to fight with Democrats all year long over this, we could see an omnibus at the end of the year. We could see it until it ends up, we could even see it until January 2009 when Congress can say we don't care who the next president is going to be, we'll wait for them.
Monica Trauzzi: And this also extends into next week when the '09 budget is released.
Dan Berman: Right. The budget will come out on Monday and President Bush also said that budget will propose over 150 program cuts that could save $18 billion. He's done some more things in the past by saying that these programs don't qualify for funding. They don't meet federal standards. They're local programs, things like that. Congress has often said, well, we control the power of the purse and we're going to fund them anyway. So, we'll see how that plays out.
Monica Trauzzi: Darren, a common theme that I was hearing after the speech from Democrats was that they need to be even more aggressive. After what the president had to say on climate they need to be even more aggressive than they already are in order to get a cap-and-trade bill passed through. What are you hearing in terms of that? How likely is it that we're actually going to see a cap-and-trade bill at least make it through the Senate at this point?
Darren Samuelsohn: There are so many moving parts to that question you need an hour to go through them all. But just to tick through, the Senate you need 60 votes. Our count shows there's about 50 who are interested in it. That means that they need to pick up 10. There's about 20 fence-sitters and talking to a few of those of those in the last couple of days you get the sense that Senator Boxer is starting to try and work these numbers and trying to figure out what they're interested in. She's going to need to win 10 and she's going to need to win those 10 without losing from the coalition of the 50, which would be the Bernie Sanders, the people from the left. So she's dealing with that. And then over in the House John Dingell talks about wanting to move cap and trade. Democratic leadership talks about wanting to move cap and trade, but sitting down with John Dingell about a week ago and asking him, point blank, what do you really think is going to happen this year? He mentioned the elections and just how much noise surrounds those and just how difficult it is, especially on his committee, which is a committee with a lot of energy, state interest on the Democratic side of the aisle. The lead Republican who they had wanted to work with to get a bipartisan compromise, Fred Upton, the new member who replaced Dennis Hastert, he's indicated that he doesn't really want to go the cap-and-trade route. And then you have the noise of the presidential election. You have Mitt Romney and John McCain right now kind of slugging it out over whether or not cap and trade is the right idea. A really interesting dynamic in the Republican Party. If McCain is the nominee, that sets up another sort of chain reaction with the White House, where President Bush could potentially be thinking, all right, John McCain and Barack Obama or Hillary Clinton, either way it's going to happen then does the lobbying pick up and then try and push President Bush to actually get moving on this? And then you have Nancy Pelosi saying that she thinks Bush would sign it. I mean it's just really interesting. Do I think it's going to happen? I probably shouldn't say at this point.
Monica Trauzzi: It's very up in the air, that's clear.
Ben Geman: I'll say, I don't think it's going to happen.
Darren Samuelsohn: He's not covering it. It's much easier for him.
Monica Trauzzi: On the international front we have the major economies meeting happening this week. And the president reiterated last night that all the major economies need to sign on to an international agreement in order for the U.S. to sign on. So what's expected in the Hawaii meeting?
Darren Samuelsohn: In Hawaii, I think very little. I mean they're going to be talking about the schedule for the year ahead, so it's more talks about talks. From our level, from a lot of people's levels, it sounds kind of boring, but I mean they are trying to get the point where they can agree on a long-term global goal for where we're headed in 2050. You know, the United Nations says they would like to get that handed off to them and if Bush could gather world leaders in July in Hokkaido at the G8 summit, again, it's not really President Bush's idea. Originally this was Tony Blair's idea of many years ago. But if Bush could, as the catalyst for this, bring all the world leaders together in Japan and if they could agree on 50 percent by 2050 is the number that keeps getting talked about, it will help the process. But so much of what really, really, really will get done happens in Copenhagen in 2009, which is when Bush is long gone.
Monica Trauzzi: And final question here. Darren mentioned the impact of the upcoming elections on the prospects for legislation. What are the two of you thinking in terms of how the elections are going to impact legislation this year?
Ben Geman: Well, I think largely picking up on what Darren was saying, like I said before, I don't see a huge space for anything major happening on energy policy this year. And that certainly would be one of the reasons. I mean I think you've got several factors sort of working against it. One, of course, is, as you pointed out a couple of times, the noise surrounding the races. And I think, again, I would just note that if you look at the agreement that was reached last year, that sort of represented the possible between this White House and this Congress and to the extent that you've got proposals from both the Democrats and the White House that they are sort of very cherished, neither one can get them past the other side. I mean the president has been mentioning again of late that he wants to see drilling in the Arctic National Wildlife Refuge. I mean that just simply will not happen with this Congress. And similarly, you've got potentially Congress taking another chance at a renewable electricity standard, which would sort of say utilities must supply escalating amounts of power from renewable sources. They had a very difficult time with that last year, veto threats, filibusters. I'm not necessarily sure that there's any greater chance this year did that would get across the finish line. So I don't see a ...
Monica Trauzzi: So is there a specific timeframe though? Is there a specific month that if you don't get it in by that time you're just not going to make it through?
Ben Geman: I don't know that I could peg a specific month. I do think it's probably fair to say that the closer we get to November the odds start to go downhill and eventually go into freefall.
Darren Samuelsohn: I just wanted to throw in one thing. I was looking back at historically presidential election years you have seen environmental laws get signed, Everglades in 2000, Safe Drinking Water Act in 1996, all the way back to '72, the Clean Water Act. So I mean things have gotten done in presidential election years. There are a lot of factors that may be a little bit different this year with President Bush and his unpopularity, but hard to say. And looking back at history it is possible.
Monica Trauzzi: Well, it will be an interesting year certainly. Thanks for coming on the show.
Ben Geman: Sure.
Dan Berman: Thank you.
Monica Trauzzi: This is OnPoint. I'm Monica Trauzzi. Thanks for watching.
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