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WHAT IT ALL MEANS
April 7, 2011

Posted by Matt Dempsey Matt_Dempsey@epw.senate.gov

EPW POLICY BEAT: WHAT IT ALL MEANS

INHOFE PRAISES OVERWHELMING BIPARTISAN OPPOSITION TO EPA's CAP-AND-TRADE AGENDA

Link to Inhofe-Upton Energy Tax Prevention Page

The moment of truth arrived: 64 senators voted yesterday, in various ways, against EPA's cap-and-trade agenda.  The House just passed Upton-Inhofe, 255 to 172, as 19 Democrats voted to repeal that agenda.  So what happens next?

The debate is surely not over-EPA will press ahead and the Energy Tax Prevention Act will come up again-so it's useful to recount what happened and why.  Here's a brief list of the major issues, and how they played out:

It's Not About Kids with Asthma: In countless speeches and meretricious ad campaigns, EPA's cap-and-trade supporters, desperate for some compelling basis for their position, cast the debate as protecting kids with asthma or protecting "dangerous" carbon "polluters."  Support for the Energy Tax Prevention Act, they said, was tantamount to "gutting" the Clean Air Act.  Of course such tripe made little headway, and the reason was obvious to the sane: carbon dioxide poses no threat to public health and the bill in no way affects federal laws governing real pollutants and toxic emissions.  Not to mention the inconvenient fact that carbon emissions (and ozone) have declined while cases of childhood asthma have increased. (See chart here)  Green activists overplayed their hand, and erased whatever shred of credibility they possessed.

Repudiation of the Tailoring Rule: The tailoring rule was EPA's trump card, pulled to answer charges that its regulations would trample small businesses.  But now it's dead. 

Tailoring emerged so EPA could avoid the self-described "absurd results" from regulating GHGs under the Clean Air Act, i.e. requiring churches and schools to get PSD permits before expanding.  So tailoring exempted small sources-temporarily.  But the rule blatantly violates Clean Air Act, and the DC Circuit will likely defenestrate it. 

EPA's cap-and-trade supporters threatened to vote on the rule, daring Republicans to oppose "regulatory relief" for small businesses.  They did so yesterday, in the form of the Baucus amendment, which would have codified tailoring.  Yet the American Farm Bureau opposed it, on grounds that a limited permitting exemption would not exempt farmers and ranchers from the higher electricity, diesel, gasoline, and fertilizer costs caused by EPA regulation of refineries and power plants.  And by voting for Baucus, one would have voted for EPA's cap-and-trade agenda, albeit in modified form.  The Farm Bureau, and many others, said "no deal."

Combined with Democrats opposed to any restriction on EPA, and Republicans who know the tailoring rule is a sham, the Baucus tailoring amendment suffered an ignominious defeat, losing 93 to 7.

Doing Away with the Rockefeller Two-Year Delay: It was dubbed the compromise measure, but was filled with holes, and would have delayed news jobs, new construction, and economic expansion.  By a vote 88 to 12, the Rockefeller two-year delay is no more. 

The bill ultimately foundered on its inconsistent logic.  As articulated by its sponsor, the purpose of the bill was to rein in EPA's GHG regulatory authority, which, he said, is "broad and potentially far-reaching," and which could "touch nearly every facet of this Nation's economy, putting unnecessary burdens on industry and driving many businesses overseas through policies that have been implemented purely at the discretion of the executive branch and absent a clearly stated intent of the Congress."  If that's the case, one wonders, why a two-year delay and not repeal? 

The American Lung Association comically expressed concern that Rockefeller would "interfere with EPA's ability to implement the Clean Air Act."  It would not; on the other hand, it would not categorically block EPA's ability to implement GHG regulations.  For both of these reasons, Rockefeller went down, and it won't rise again.

Nowhere to Hide: Many members have publicly aligned themselves with concerned constituents, say manufacturers or farmers, who oppose EPA's GHG regulations.  One Democratic senator, for example, wrote a letter to EPA Administrator Lisa Jackson in February, arguing that "any approach to reducing greenhouse gas emissions must recognize the unique situation of energy-intensive manufacturers."  Of course, EPA's regulations don't, and can't: "It is disconcerting," the senator wrote, "that, to my knowledge, the EPA has neither a plan in place nor the authority to provide these protections to U.S. manufacturing, a sector of the economy critical to the continued economic recovery of my state and so many others." 

Well put.  Yet this senator voted against the Energy Tax Prevention Act, the only solution to fully address the aforementioned concerns.  He fails to grasp that delays, carve-outs, and exemptions won't solve the underlying problem: EPA will raise energy prices and send manufacturers overseas.  Now this senator and others will have to explain why, with their vote, they stood by and let it happen.

What the Future Holds: With 19 House Democrats supporting Upton-Inhofe, and 64 senators on the record in some way against EPA, all eyes are on EPA and the White House.  Will EPA change course?  Will President Obama accept that his cap-and-trade agenda is wildly unpopular, and agree to repeal it?  Don't hold your breath.  That means the debate continues, and the battle over the Energy Tax Prevention Act carries on.  The bill will come to the floor again, and soon, so members will once again have to decide whether they stand with consumers, manufacturers, farmers, and small businesses, or with EPA's barrage of GHG regulations that will harm all of them. 

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