Hill Heat

The Senate-House conference committee tasked with hammering out the five-year farm bill (H.R. 2419) had an original deadline of April 18 that was extended until today. After marathon sessions all week, negotiators have come close enough to a final package to give leadership confidence to grant a further one-week extension to next Friday, May 2.

Yesterday, Agriculture Secretary Ed Shafer said Bush would veto the farm bill if funding for the farm bill came from a requirement that stock brokers and mutual funds report the cost basis of securities sold by their clients, a tax loophole closure that was estimated to value $6.2 billion and was favored by House Ways and Means Chairman Charles B. Rangel (D-N.Y.). Negotiators decided not to test the veto and will instead raise funding through customs user fees.

Allison Winter for E&E News describes the deal:

The new framework for the bill includes a $4 billion boost above the current baseline for conservation programs, $10.3 billion in new spending on nutrition and new tax incentives for the timber and cellulosic ethanol industries. Crop subsidies and a proposed disaster relief program took the brunt of the spending cuts to offset the new spending, lawmakers said.

Catharine Richert reports for CQ Today:

House and Senate conferees have struck a long-awaited deal on the new farm bill.

The measure (HR 2419) will be worth about $570 billion over 10 years, with new funding for farm-related tax credits, a disaster aid program, and new funding for food stamps.

Those programs will in part be paid for by a $400 million cut to direct payments — a subsidy farmers get based on their acreage and the type of crop they grow — and a $250 million cut to a $4 billion disaster-aid fund.

But most of the offsets for the extra spending will come from extending customs user fees, a revenue-raiser favored by the Bush administration.

Nutrition programs would get a significant boost. Food stamps and food aid would top out at about $10.2 billion, up from an initial proposal of $9.5 billion.

Over the weekend, lawmakers will continue their discussions about preventing very wealthy farmers from collecting government subsidies. The conferees say they will have a conference report ready for House and Senate floor action by Monday.

Darren Samuelson of E&E News reports that Sen. George Voinovich (R-Ohio), with assistance from the White House, is working on a legislative alternative to the Lieberman-Warner Climate Security Act (S. 2191). The version of the plan that E&E News acquired included:

• Voluntary goals of 2006-level emissions by 2020 and 1990 levels by 2030
• Tax incentives for advanced coal and nuclear power
• A “backstop” cap-and-trade program

The IPCC Fourth Assessment Report outlined the need for industrialized nations to achieve reductions of 25-40% below 1990 levels by 2020, targets the Annex I Kyoto signatories recognized in Bali.

From E&E News:

On the other side of the climate debate, Sen. George Voinovich (R-Ohio) is taking the lead in writing his own climate change bill that could come up as an alternative to the Lieberman-Warner measure.

Sources on and off Capitol Hill started circulating details of Voinovich’s proposal last week. An executive summary of the Voinovich plan obtained yesterday by E&E Daily shows a plan heavy on tax incentives for new energy technologies such as “clean coal” and nuclear power, with a cap-and-trade program used as a backstop if the low- and zero-carbon energy sources do not meet certain milestones.

The summary said those milestones would be to reduce U.S. emissions to 2006 levels by 2020 and 1990 levels by 2030. Voinovich spokesman Chris Paulitz said yesterday that the summary was “well outdated,” though he did confirm the senator was working on alternatives.

“He’s trying to figure out a way to make the environment cleaner that doesn’t kill our economy,” Paulitz said. “Right now, there’s not a bill in the Senate that does those two things.”

Voinovich is getting help from the Bush administration on his climate proposal, as well as others. “We’re working with everybody who we can humanly think of,” Paulitz said. Of the White House, he added, “It’d be silly to exclude a branch of government that would play a key role.”

From the Think Progress Wonk Room.

Alberto Gonzales brought disgrace to the Department of Justice as Attorney General, putting loyalty to the President above duty to the country, until the weight of numerous scandals forced his resignation in August 2007. As the New York Times described, he left “a Justice Department that has been tainted by political influence, depleted by the departures of top officials and weakened by sapped morale.”

Now all eyes are turning to Stephen L. Johnson, administrator of the Environmental Protection Agency (EPA)—set up by President Nixon in 1970 to be an independent watchdog for the health of the environment and the American people. It has become clear that Johnson has subverted that mission, in contravention of science, ethics, and the law. What Gonzales did to Justice, Johnson is doing to the EPA.

On February 27, Sen. Sheldon Whitehouse (D-RI) compared Johnson to Gonzales after a shameful performance before Congress. Two days later, unions representing more than 10,000 EPA career staff suspended their relationship with Johnson, citing his “failure to engage in good faith.” Yesterday, the Union of Concerned Scientists (UCS) released a survey of staff scientists documenting widespread political interference during his tenure.

The most prominent examples of Johnson’s malfeasance are under investigation by Congress – the blatant disregard of the Supreme Court mandate to regulate greenhouse gases and allow states to do so as well, and the overruling of scientific recommendations on smog standards at the behest of President Bush.

However, there are numerous further acts exposed by the Public Employees for Environmental Responsibility (PEER) that are running below the radar:

• Refusing to enforce the agency’s “Principles of Scientific Integrity” involving fluoride drinking water standards, organophosphate pesticide registration, and control of mercury emissions from power plants.

• The shuttering of EPA’s network of technical libraries without waiting for Congressional approval in 2006 – to be reopened only with documents that undergo a political review.

• The abandonment of proposed rules protecting children and workers from lead paint in 2004 – rectified this March after years of lawsuits.

• Violating the Endangered Species Act in failing to consider the harmful effects of pesticides on Chinook salmon.

The common thread behind all these actions is service to corporate polluters above public health. PEER has also exposed increasing corporate influence on pesticide labelling, scientific research, assessement of the health risks of new chemicals, and even the drafting of rules to allow testing pesticides on children.

In December, EPA staff privately urged Johnson to resign if he denied the California waiver petition to regulate greenhouse gases. Last month, Sierra Club president Carl Pope called for the resignation of Johnson because “he is entirely a creature of the whim of the President, the vice president, and other White House officials.” Three weeks ago, Friends of the Earth followed suit.

Yesterday, Rep. Waxman sent a letter to Johnson about the UCS report, asking him to “be prepared to respond to its findings” in an Oversight Committee hearing in May.

Rep. Markey has replied to the EPA’s refusal to obey a Global Warming Committee subpoena. In his letter, Markey says the committee is willing to keep confidential any documents turned over until June 21. If the EPA does not agree to this accomodation by 6 PM tomorrow, the “Committee is prepared to proceed with all its legal rights,” including “a vote of contempt” for Johnson.

Yesterday, Rep. Henry A. Waxman (D-CA), Rep. Ed Markey (D-MA) and Rep. Jay Inslee (D-WA) released a document entitled “Principles for Global Warming Legislation,” saying they “are designed to provide a framework for Congress as it produces legislation to establish an economy-wide mandatory program to cut global warming emissions” and that they “will meet the United States’ obligations to curb greenhouse gas emissions and also will provide a pathway to the international cooperation that is necessary to solve the global warming problem.”

The principles are summarized:

The principles include the following elements: strong science-based targets for near-term and long-term emissions reductions; auctioning emissions allowances rather than giving them to polluting industries; investing auction revenues in clean energy technologies; returning auction proceeds to consumers, workers, and communities to offset any economic impacts; and dedicating a portion of auction proceeds to help states, communities, vulnerable developing countries, and ecosystems address harm from the degree of global warming that is now unavoidable.

The specific 14-point elements provide specific language that is more complicated than the above summary. For example:

• The document recognizes that an increase in global temperatures greater than 2°C above pre-industrial levels will bring about “dangerous and irreversible changes to the Earth’s climate” and that the IPCC calls for an industrialized-nation minimum target of 25% below 1990 levels by 2020, but calls for a U.S. target of 100% of 1990 levels.
• The language for scientific lookback provisions would be technically satisfied by Lieberman-Warner’s current provisions (Sec. 7001-7004), which only mandate action by 2020.
• The document does not actually call for full auction of allowances, saying: “If any allocations are given to polluters, they must be provided only to existing facilities for a brief transition period and the quantity must be limited to avoid windfall profits”; no definition of “brief” or “windfall profits” is given
• “Significant” auction revenue should be dedicated to “clean energy and efficiency measures” – “clean energy” is defined as “technologies and practices that are cleaner, cheaper, safer, and faster than conventional technologies.” The document does not distinguish between renewable and non-renewable technologies
• Only clean technology, a priority of Rep. Inslee, is recommended to receive a “significant” portion of auction revenues; however, the document says that auction revenues “sufficient to offset higher energy costs” should go to low- and middle-income households.

The document is written with an eye to the Lieberman-Warner Climate Security Act (S. 2191), the cap-and-trade legislation expected to reach the Senate floor in June. In part, this is because the document is expressly focused on cap-and-trade legislation; questions of broader policy (agriculture, transportation, architecture, urban planning, health) are only touched on. Many of the provisions are written in such a way that the language in Lieberman-Warner satisfies them (such as the 2020 target, lookback provisions, call for complementary policies, and most of the auction proceeds language).

Points of difference include the document’s call for 80% reductions from current levels by 2050 (Lieberman-Warner’s 2050 target is estimated to achieve a 62-66% reduction from current levels) and the emphasis on auction rather than allowance giveaways. Lieberman-Warner allocates a significant percentage of allowances for public purposes, giving them to states, tribal governments, federal agencies, and load-serving entities who would then sell the allowances to emitters to use their value; this document emphasizes instead using auction revenues.

In general, the House document is in line with the Sanders-Lautenberg principles, though Sanders-Lautenberg is stronger on the scientific language. However, it is considerably less aggressive than the progressive 1Sky principles. For example, there is no language even hinting at a coal plant moratorium, which has been called for by Reps. Waxman and Markey (H.R. 5575).

The full document of principles is after the jump.

Originally posted at the Think Progress Wonk Room.

In continued defiance of Congressional oversight, the Environmental Protection Agency (EPA) has flatly declined to obey a subpoena from the House Committee on Global Warming and Energy Independence. The subpoena for documents relating to the EPA’s refusal to obey the Supreme Court mandate to regulate greenhouse gases was issued by a unanimous, bipartisan vote on April 2, a year after the Supreme Court decision.

On April 11, the EPA requested and received an extension to respond, but today the agency has decided not to turn over the documents:

Whether or not the EPA has “grave concerns” about “erroneous impressions,” a “chilling effect,” and “institutional prerogatives,” these are not legally defensible reasons to defy a Congressional subpoena. In a terse response, Committee chair Ed Markey (D-MA) found the reasoning “unpersuasive.” The letter continues:

Of course, if the EPA simply turned over the documents, it would no longer be under such a “cloud.”

Three of eleven titles were cleared by the farm bill (H.R. 2419) conference committee yesterday. The research, trade and credit titles are less controversial than ones remaining, as conferees come upon the Friday deadline for renewing the farm bill or filing for an extension. Allison Winter reports for E&E News that the conferees expect to ask for a short extension:

“A long-term extension is totally not acceptable to me,” said House Agriculture Chairman Collin Peterson (D-Minn.).

Senate Agriculture Chairman Tom Harkin (D-Iowa) said he plans to plow forward with marathon conference sessions this week, in the hope of reaching enough agreement to justify a short-term extension of current farm programs.

“The best outcome is if by Friday we have this done, but I don’t think that is going to happen,” Harkin told members of the conference committee today. He said he plans to ask for an extension of a “few days.”

A significant matter of dispute is the title that deals with tax incentives:

The tax package includes incentives for endangered species habitat, cellulosic ethanol, biodiesel and residential wind credits, among a host of other provisions. Farm bill conferees on the House side asked members today to strip it, while senators pleaded to keep at least some of the incentives, even if they are pared down.

“We feel like we are being held hostage by the Senate Finance Committee,” said House Agriculture ranking member Bob Goodlatte (R-Va.). “We’re concerned about jurisdictional issues and the total amount of money.”

In remarks to reporters after the meeting, Sen. Kent Conrad (D-N.D.) suggested lawmakers may cut about $1 billion from the tax title.

On Thursday, the Congressional Budget Office issued its cost estimate of the Lieberman-Warner Climate Security Act, finding it would create a $1.2 trillion cap-and-trade market through 2018 in carbon allowances, $946 billion of which in the form of corporate giveaways that would become windfall profits. Because of the failure of the legislation to account for the effect of the system on receipts from income and payroll taxes, the CBO estimated that the bill would generate a $15 billion budget deficit over the first ten years, with greater than $5 billion in deficits each decade following.

Because ownership of the allowances is not limited to emitters, the CBO interpreted the emissions allowances as the equivalent of a revenue-generating tax. Allowances given away are interpreted as “direct spending” – that is, revenues lost (“CBO considers the distribution of such allowances at no charge to be functionally equivalent to distributing cash”). Assuming enactment of the bill at the end of 2008,

CBO estimates that implementing this legislation would result in additional revenues, net of income and payroll tax offsets, of $304 billion over the 2009-2013 period, and about $1.19 trillion over the 2009-2018 period. We estimate that direct spending would increase by $281 billion and about $1.21 trillion over the same periods, respectively. Those changes in revenues and direct spending would stem almost entirely from the process of auctioning and freely distributing allowances under the cap-and-trade programs established under this legislation.

Over 78% of Market’s Value Dedicated to Polluter Giveaways Of the $1.2 trillion market, $260 billion is auctioned and $946 billion freely given to covered emitters. Because the CBO estimates that most of the cost of emissions reduction “would ultimately be passed on to consumers in the form of higher prices for energy and energy-intensive goods and services,” the $946 billion in emitter giveaways would become windfall profits. The effect on consumers is the same whether the allowances are given away or auctioned.

Banking’s Effect – Faster Reductions Up Front, Higher Allowance Value Furthermore, the CBO estimates that the unrestricted ability to “bank” emissions allowances (allowances distributed in one year may be redeemed at any time in the future) would encourage companies to attempt to “undertake significantly more mitigation than necessary to meet their annual emission caps” in early years because of the initially low allowance price and an expected rate of return “significantly greater than CBO’s estimate of the expected long-run inflation-adjusted rate of return to capital in the U.S. nonfinancial corporate sector,” raising the price by about 27 percent higher than a no-banking policy over ten years.

Lion’s Share of Auction Revenues Go to Privately Controlled R&D The CBO estimates that in the first decade $123 billion, 47% of auction revenues, would go to the Climate Change Credit Corporation to allocate as it sees fit within its mission of funding industrial research and development – the corporation is set up as a private entity with a board selected by Presidential appointees.

Yesterday morning, the Senate passed the Ensign-Cantwell clean energy package (S.Amdt 4419) by a vote of 88-8. The package is attached to Sen. Chris Dodd’s (D-Conn.) Foreclosure Prevention Act (S. Amdt 4387 to H.R. 3221), which was approved 84-12.

The future of the energy package now depends on whether the House is willing to consider it a “stimulus” that merits deficit spending.

The eight senators in opposition were Sens. Alexander (R-Tenn.), Bunning (R-Ky.), Byrd (D-W.Va.), Carper (D-Del.), Dodd (D-Conn.), Kyl (R-Ariz.), Sessions (R-Ala.), and Voinovich (R-Ohio). Alexander and Kyl’s alternate version of the package (S. Amdt 4429), which would have extended credits by another year and lowered the wind production credit, died by a 15-79 vote. Dodd had vigorously argued that the renewable tax package was not germane to his housing bill.

Not voting were the three presidential candidates and Sen. Liddy Dole (R-S.C.).

Originally posted at the Think Progress Wonk Room.

In his Senate Environment and Public Works nomination hearing today, David Hill, the Bush nominee for the General Counsel of the Environmental Protection Agency (EPA), was asked by Sen. Barbara Boxer (D-Calif.) what the EPA Administrator should do “if the President of the United States tells him to do something illegal.”

I believe that the courts have held, Senator, that within the unitary executive the administrator and the EPA, just as with all executive agencies, work for the President and are responsible to the President of the United States.

The “unitary executive” theory is a formerly obscure legal argument that asserts “all executive authority must be in the President’s hands, without exception.” Supreme Court Justice Samuel Alito is a champion of the doctrine, as is Vice President Cheney’s chief of staff, David Addington.

Boxer’s question was not purely hypothetical. The current administrator of the EPA, Stephen L. Johnson, has overruled his staff’s scientific recommendations on global warming regulations and ozone limits – both apparently at the behest of the White House.

Yesterday, Rep. Henry Waxman (D-CA) issued a subpoena to compel the EPA to turn over documents involving communications with the White House.

Hearing transcript:

The WSJ’s Dana Mattioli reported yesterday afternoon on the latest development in congressional oversight of the EPA’s California waiver decision:

In a letter today, two senior Republicans on the House Committee on Oversight and Government Reform asked the panel’s chairman, Henry Waxman (D., Calif.), to investigate whether top EPA staffers either violated federal rules that restrict regulators from lobbying, or “misused their positions to surreptitiously influence” EPA’s decision on whether to allow California to regulate carbon-dioxide emissions from vehicles.

Reps. Tom Davis (R-VA) and Darrell Issa (R-CA) are mad at Margo Oge and Christopher Grundler, the senior EPA officials tasked with evaluating California’s waiver request and (unsuccessfully) telling Administrator Stephen Johnson that he had no choice but to grant it. Congressional oversight of that decision revealed that the pair subsequently provided former EPA Administrator William Reilly—at Reilly’s request—talking points with which to argue the waiver’s merits to Johnson.

Davis and Issa argue that this deserves the same level of scrutiny that Waxman devoted to a surreptitious plan to lobby Congress and governors against the waiver—Johnson may have also been a target, but he could not recall whether that was the case—deployed last summer by Secretary of Transportation Mary Peters, White House officials, and industry lobbyists.

This actually isn’t the first time that congressional Republicans have gone after Oge and Grundler. During a hearing that followed the revelation of the Reilly memo and other EPA documents, Senator James Inhofe (R-OK) asked Administrator Johnson whether his employees had violated the Hatch Act. Johnson defended their actions, saying that he has “always encouraged my staff to give me candid and open advice” (he just reserves the right to ignore it, even when phrased as a clear mandate and not simply advice, and the resulting fallout severely alienates staff unions).

Rep. Waxman responded to the letter by pledging to give it “careful consideration,” while noting that the Committee had “found no evidence that EPA career staff lobbied members of Congress with respect to [California’s request]” (translation: the Davis-Issa analogy to his previous investigation is bunk). For his part, Reilly, who ran EPA under the first President Bush and granted California several waivers, has said that his communications with career staff who served under him were not unprecedented, let alone improper or illegal.