Economy:

Energy Future Coalition's Detchon discusses energy provisions in House recovery plan

As Congress' $825 billion economic recovery plan heads to the House floor this week, many Republicans are questioning the tight deadline for passage of the stimulus. During today's OnPoint, Reid Detchon, executive director of the Energy Future Coalition and executive director of the climate and energy program at the U.N. Foundation, previews this week's House floor debate and discusses the key energy measures included in the plan. He addresses whether picking energy "winners and losers" in the stimulus could cause market issues in the future. Detchon also explains how the stimulus could set the tone for other legislative goals this year.

Transcript

Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is Reid Detchon, executive director of the Energy Future Coalition and also the executive director of the climate and energy program at the U.N. Foundation. Reid, it's nice to have you back on the show.

Reid Detchon: Glad to be here.

Monica Trauzzi: Reid, the House has just wrapped up a week of markups on the $825 billion stimulus bill and Speaker Pelosi has said that the bill will be on the floor next week. She's trying to keep things moving in order to meet that February 13 deadline for passage. There's a sense on the Republican side though that Congress is sort of rushing through the copy in order to meet this deadline. Is enough analysis happening of the economic benefits of the stimulus?

Reid Detchon: Well, I think any time -- and I say any time, have we ever done an $825 billion package before? No, so you could study this forever, but we have an economic crisis in this country and the purpose is to get money into the economy and get people working again. So, I think that analysis probably does suffer, but I think the Congress needs to and is probably willing to take that risk in order to stimulate the economy.

Monica Trauzzi: Are we going to find out six months down the line though that we're not actually getting the job and economic benefits that we were hoping for?

Reid Detchon: I think, inevitably, if you do an $825 billion package you're going to have some disappointments along the way. You're going to have jobs that aren't, more likely you're going to have waste. Clearly, you're going to have money go places that a prudent person wouldn't do if you had all the time in the world to think about it. But I think that the economy needs a jump-start. It needs a real lightning bolt and this is what Congress is trying to do and certainly what the new administration is trying to do.

Monica Trauzzi: And congressional leaders and President Obama have been pushing hard for this to be a real bipartisan approach. But we're hearing, you know, some complaints from the Republican side of the aisle. Do you think this is becoming very partisan or will it pass with both sides agreeing?

Reid Detchon: Well, it's a little hard to predict yet, but I think that Republicans, John McCain said it very well. He looked at the election results. He's looked at the poll numbers for President Obama and I think Republicans are in a difficult position if they are seen as obstructing something that is meant to help the economy when people are suffering. Now, I understand that they can have concerns about the relative share of tax cuts versus spending programs and the way particular programs are being designed, but as Nancy Pelosi I think said yesterday, we won the election. So I think that the Democrats are going to put their firm stamp on it and clearly the Obama team is trying to bring Republicans on board and would like to see very big majorities. It will be a test of the diplomatic skills of the new team and of the leadership in both houses.

Monica Trauzzi: So, based on what we've seen in this last week with all the markups of the bill, is this undergoing a major facelift? Are we seeing lots of changes coming out of these markups?

Reid Detchon: That's not been my impression to date. I think that, among other things, putting together an $825 billion package is not simple. And so I imagine people will try to change around the edges and I imagine some Republicans will want to pick out particular programs that they don't agree with and make an issue out of it. But I don't see this being fundamentally restructured.

Monica Trauzzi: So, let's talk about substance a bit. In terms of the energy provisions, what are some of the key measures included that you think they've gotten right and where do you think more work needs to be done?

Reid Detchon: Well, I think the Obama team and the president himself have stayed remarkably focused on a transition to a new clean energy economy. And the balance that has to be struck and the difficulty of dealing with a stimulus bill is that you want to create jobs in an 18-month period. You want to get that money out there and just as you can't magically start a highway project that doesn't exist some of these projects take time to develop. You can't build major, new transmission lines to bring renewable energy to market in 18 months. There's a planning process that has to go on. And so I think that there's been a little bit of difficulty in thinking through where can you spend money quickly to good effect that also advances the larger agenda?

Monica Trauzzi: There are a couple of reports circulating that contend that the stimulus is essentially picking winners and losers when it comes to energy and not letting the market decide. Doesn't this pose problems down the line when you're not letting the market decide?

Reid Detchon: Well, I think you want to use the market, but the market has been the problem in a sense. It's driven us toward dirty energy that happens to be cheap. Now, that will be addressed further down the line with climate legislation that might rebalance that equation. But in the meantime, I think that the administration and the leadership in Congress is looking down toward a day when America is going to need to depend on clean energy. Clearly, we're going to be in a carbon constrained world and the idea that we would invest in anything other than the technologies of the future is crazy. So, in that sense, they're picking winners and losers. They're saying, yes, we want a clean energy future. But I think that, A, that was adjudicated in the campaign and, B, it was a topic on which McCain and Obama agreed almost entirely. So I think that the American people are very clear about their preference.

Monica Trauzzi: And some Republicans say that the bill that's currently being marked up puts too much money into government programs and it's just further expanding government influence. Is that accurate?

Reid Detchon: Well, I think it's overstated. My recollection of the analysis is something like 80 percent of it would be handled in the private sector. But I'll give you an example that we feel strongly about, which is energy efficiency. There's no better investment that you can make for the economy than reducing our energy waste. And this is something where a year ago I would have said we would have a real problem in spending a lot of money because it's hard to find the skilled labor to do it. But the building industry is flat on its back. They are not building homes. They are not building commercial buildings. They are sitting around and that's an ideal pool of labor to go to work tomorrow. Let's start retrofitting buildings all around the country. We think let's set a very high bar. The city of Chicago, in their climate action plan, set a goal of retrofitting 40 percent of the commercial and residential building stock in Chicago by 2020. That is a very ambitious goal, but it's one that the country could take on to its own benefit. And we can get started on that very fast using utilities as the intermediary and set in motion an efficiency investment program that will carry on not just on the basis of federal money, but for decades based on rejiggering our rate structure at the state level so that efficiency investments are rewarded and utilities are driving this at very high levels.

Monica Trauzzi: Where does this all go when it gets to the Senate? Where could it potentially get derailed?

Reid Detchon: Well, of course, the Senate has its own political rules that make life difficult, but I don't think that there will be a unified Republican view on this. And I think that getting it passed is, I think, a foregone conclusion. But we've seen some somewhat discouraging early word about the numbers on efficiency in the Senate that are lower than the House. And we think that's exactly the wrong direction to go. The House numbers are good. They're not terrific, but they are substantial investments. We think, if anything, the Senate should increase them, not decrease them.

Monica Trauzzi: If Congress is able to get this passed on deadline and have some sort of bipartisanship do you really see this bill sort of setting the tone for the other legislative goals that Democrats have for the year?

Reid Detchon: Well, I do think that the attempt to create a bipartisan working majority is something that will carry forward. And I think we will see some evidence on this -- I think the Republican Party, particularly in the Senate, is you might say split between the McCain wing, which is the voters have spoken. Let's find a way to work together. And, how would I say it, bitter-enders who say, no, that's not what our constituents want and we're going to oppose these proposals. So I think that there will be a tension in the Republican Party over that that will get sorted out over time, but I don't think it will go all one way or the other.

Monica Trauzzi: And one of those proposals coming down the pipeline is cap and trade and there were some concerns early on that cap and trade was almost doomed this year because of the economic crisis. But we're already hearing, both in the House and Senate that they're moving forward with hearings. You know, Waxman is saying he wants to have a bill by May. How far does this issue get this year?

Reid Detchon: Well, we'll have to see how the legislative strategy plays out, but I think that the framing that we can't do this in tough economic times is exactly wrong. We need to invest in the technologies that are going to be the basis of our manufacturing future, the basis of our energy future, and there's no point in investing in those technologies unless there's a market signal so that they can succeed economically against their competitors. We have to readjust the marketplace so that clean technologies can compete economically and dirty technologies, which have had the atmosphere as a free garbage dump for the last 200 years, have to pay the costs associated with that in that circumstances. Then we're going to be moving to clean energy technologies with the private sector investing in it and driving the market for them. I think that, in that sense, cap and trade or some kind of way to put a price on carbon is absolutely essential as part of our energy investment program.

Monica Trauzzi: Essential, but maybe not this year?

Reid Detchon: Well, that will be a matter of strategy. I think that if I were doing it I would put the two together and say this is a unified vision folks. We can't have a strategy where we do energy over here and climate over here. Energy and climate are the same. And we need to have a unified strategy. People keep saying the U.S. has no energy strategy. That's because our energy strategy has been let's do more of everything. Well, that isn't a strategy. A strategy is we're going to face a carbon constrained future and we'd better get ready for it and if we do it right, we'll lead the world in these new technologies.

Monica Trauzzi: All right, lots to watch this year. We'll end it right there. Thanks for coming on the show again.

Reid Detchon: Thank you Monica.

Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.

[End of Audio]

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