NEWS

New Lieberman-Warner plan shows $5.6T payoff to overhaul U.S. economy

05/20/2008

Darren Samuelsohn, E&E Daily senior reporter

A major global warming bill due on the Senate floor early next month would raise more than $5.6 trillion through midcentury to overhaul the U.S. economy, according to a summary of the newest version of the legislation obtained by E&E Daily.

Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) is leading efforts to rewrite the climate bill that would set a first-ever domestic cap on heat-trapping greenhouse gas emissions. The summary Boxer circulated to Senate offices late Friday gives only a broad overview of the changes she hopes to make to the bill, including six additional titles.

Foremost, Boxer does not plan to tighten the emission limits from earlier versions of the bill. The midterm target will remain at a 19 percent cut below 2005 levels in 2020, while the 2050 limit stays at 71 percent below 2005 levels.

But new language added to the bill would help industry cope with volatile compliance costs by creating a bank of extra greenhouse gas emission allowances to be released if the price for a carbon credit reaches a predetermined range. Another fix would allow industry to meet up to 10 percent of its compliance requirements by funding international reforestation projects.

Boxer will manage the climate bill on the floor during a debate that is expected to begin the first week of June, right after Congress returns from its Memorial Day recess. To pass the bill, supporters will need 60 votes to clear expected procedural obstacles, no easy task given the myriad of concerns from conservative and some moderate lawmakers.

Gearing up for that fight, Boxer is trying to convince senators that the climate bill will confront global warming while creating vast sums of new revenue that can stimulate the economy.

"This substitute reflects an enormous contribution from senators on both sides of the aisle, and I am happy to tell you it is deficit neutral, it provides a very large tax cut to assist consumers with their energy bills, and it follows the very strong advice of scientists who have told us what needs to be done to avert the catastrophic effects of unchecked global warming," Boxer said in a letter to senators sent Friday.

In her summary, Boxer attached specific dollar figures to the new programs created throughout the lifetime of the cap-and-trade program as the government distributes emission credits for free and via an auction. Previously, the bill’s authors had only provided percentages of the overall pot that would flow to the new programs.

Big ticket payouts would include: $911 billion for consumers to help with energy costs and energy efficiency projects; $566 billion for states to deal with greenhouse gas cuts; $307 billion for fossil fuel electric utilities; $254 billion for states that rely on manufacturing and coal; $253 billion for state and tribal adaptation efforts; $237 billion for wildlife conservation; and $213 billion for carbon-intensive manufacturers such as iron, steel, paper, cement, glass and ceramics.

Combined, all of the programs total more than $5.6 trillion.

Substitute ready early this week?

Boxer has pledged to release the full text of her substitute amendment early this week, but the wait has left many Senate offices nervous about what is actually in the bill. It also has added a layer of uncertainty to plans for the upcoming floor debate, including how much time will be spent on the legislation, as well as the amendment process.

One of the bill’s original co-authors, Sen. John Warner (R-Va.), said he has been in daily meetings with his legislative partner, Sen. Joe Lieberman (I-Conn.), and Boxer to get the substitute amendment ready for review.

"I’m anxious to have it," Warner said last week. "I’d assume it can be done and done correctly to reflect the views of all three of us."

Senate aides said yesterday they expect the climate bill will be a contentious point of discussion during the Democratic and Republican caucus lunches today. Several moderate and conservative lawmakers have raised concerns over the costs of the bill and the need to debate it amid such high energy prices and the slow economy.

Andrew Wheeler, staff director to Senate Environment and Public Works Committee ranking member James Inhofe (R-Okla.), called the bill’s $5.6 trillion payoff a "redistribution of wealth from American consumers to various pet projects and programs."

Wheeler added, "You can put lipstick on a pig and this is a still a pig. This is the biggest pork bill that Congress will ever consider."

If the debate occurs as scheduled next month, there is also a high potential for uncomfortable votes for the three remaining presidential candidates—Sens. John McCain (R-Ariz.), Barack Obama (D-Ill.) and Hillary Rodham Clinton (D-N.Y.)—if they show up.

And proponents of expanded nuclear power also are trying to get language added to the bill despite objections from Boxer and other liberal Democrats. "There will be nuclear in there," Warner said. "I think it will be something that those in the industry that are anxious to move forward will receive quite well."

Click here for the summary of the Lieberman-Warner substitute amendment.