Cap and Burn: Democrats achieve historic collapse on cap and trade bill - Wall Street Journal
June 9, 2008
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The Wall Street Journal
Cap and Burn
Democrats achieve historic collapse on cap and trade bill.
June 9, 2008; Page A16
For months, Democrats and the environmental lobby promoted last week's Senate global-warming debate as a political watershed. It was going to be the historic turning point in U.S. climate change policy. In the event, their bill collapsed in a little more than three days.
Democrats failed to secure a majority, much less the 60 Senators necessary, for a procedural vote on Friday morning that would have allowed the real work of amending the bill to begin. By that point, Majority Leader Harry Reid had already made it plain that he wanted the bill off the floor as quickly as possible – despite calling climate change "the most critical issue of our time." But not critical enough, apparently, even to let his Members vote on the merits, much less amendments.
The strange death of this year's cap-and-trade movement was so unexpected that some are already predicting a shift in the politics of global warming. That's premature. Still, the postmortem holds lessons for the next time this issue emerges.
Until last week, the Democratic M.O. on climate change was to lash the Bush Administration for its supposed inaction and then pass responsibility onto regulators and the courts. Proponents thought they had the whip hand. Yet this time they had to defend an actual piece of legislation – and once it was subjected to even preliminary scrutiny, the Democrats crumpled faster than you can say $4 gas.
Bad timing was the least of it. Republicans methodically dismantled the cost and complexity of "cap and trade," which sounds harmless but would inflict collateral damage on the wider economy in lost GDP and higher prices up and down the energy chain. Conveniently, the Democrats would also bestow unto Congress (read: themselves) some $6.7 trillion in new tax revenues and carbon welfare handouts over the next four decades. Some of the most effective opponents – like freshman GOP Senator Bob Corker – support climate regulation but view the current scheme as frivolous, dishonest or both.
Their task was helped along by the incompetence of the Democrats, especially floor manager Barbara Boxer. Environmentalists deemed it blasphemy that anyone would oppose their grand ambitions, instead of trying to persuade. "I resent the Senator from Tennessee saying our bill is a slush fund," Ms. Boxer said at one point, apparently serious.
After Mr. Corker called the bill "the mother of all earmarks" and "a huge unnecessary transference of wealth," Ms. Boxer was reduced to arguing that it's really "a huge tax cut for the American people" and "will not increase gas prices." These are delusions, or worse. Cap and trade is designed to raise energy prices, which are supposed to spur the investments and behavior changes needed for a less carbon-intensive economy.
Such realities are beginning to seep into liberal precincts. After the bill bottomed out, no fewer than 10 Democrats from the Midwest and South – whose economies rely on coal-fired power or heavy industry and thus will be disproportionately affected – registered their displeasure with Mr. Reid and Ms. Boxer. Including Sherrod Brown (Ohio), Carl Levin (Michigan), Jay Rockefeller (West Virginia) and Jim Webb (Virginia), the Senators said they could not support cap and trade "in its current form" because it would cause "undue hardship on our states, key industrial sectors and consumers."
Even Barack Obama and John McCain backed away from a bill they claim to favor. Mr. McCain said he opposed it because it didn't do enough for nuclear power, while Mr. Obama blamed the failure on Republicans. But the word on Capitol Hill is that both Presidential candidates urged Mr. Reid to yank the bill, lest they get trapped into voting for higher energy prices.
Maybe a vast reordering of the American economy in the name of solving a speculative problem isn't as popular as the greens believe. And perhaps President Bush's approach to climate change – voluntary reductions and subsidies for alternative technology – will seem a lot more realistic once the partisan fevers of the moment have passed.
That's not to say that cap and trade won't return in a more politically potent form next year. The greens will regroup and try to do a better job of buying off their adversaries, especially businesses that could profit from carbon regulation. Nonetheless, this past week has shown that the more transparent any cap and trade debate is, the less chance this tax and spend idea will become law.
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