Wednesday, December 16, 2009

Health Care Reform Staggers Toward The Finish

If, as President Obama predicts, health care reform legislation is approaching the finish line in the Senate, then it has been staggering fitfully across the last stretch of the track. Senators are supposed to vote on this 2,000 plus page bill before Christmas, yet none of them have yet seen the actual text of the legislation. Managers of the bill will not release the final version until CBO has completed its scoring of the measure, and of course CBO is shooting at a moving target as the compromise negotiations stutter along on the two most controversial and stubbornly difficult aspects of reform: abortion funding and the public option.

Senator Joe Lieberman says he won’t vote for a bill with a public option in it, and Senator Roland Burris says he won’t vote for a bill without a public option in it. Either way, Democrats come up one vote short of the 60 needed for passage. No matter what the resolution of the public option problem, abortion coverage is an independent and equally contentious hurdle. Women’s rights advocates insist every American woman should have an avenue to purchase health coverage including the possibility of abortion services, and right to life advocates are equally insistent that not a penny of federal taxpayer dollars should go to fund the purchase of abortion insurance, either through premium subsidies or Medicare and Medicaid coverage.

Of course, passage in the Senate, whether before or after Christmas, does not assure that health care reform becomes reality. The only thing now clear about the Senate version of the legislation is that it won’t be identical to the bill already passed by the House. That means that whatever the Senate does pass will go to a conference committee, where these two seemingly impossible issues will rise again, along with the differences in approach between House and Senate tax impositions to pay for the enormous cost of expanding health coverage for those who can’t or won’t buy it on their own. Super Bowl Sunday may come and go before American citizens know what conclusion Congress reaches regarding health care reform legislation.

Obama’s New Jobs Initiative

The Obama administration and House Democrats are pushing forward a second jobs initiative this week, though prospects for Senate consideration of the measure before year end are grim. The proposal will redirect $75 billion from unspent TARP appropriations to job creation programs and extensions of emergency assistance for those now out of work. The measure is expected to ultimately include $35 billion for highway and transit construction, $2 billion for water construction projects and affordable housing construction, and about $11 billion for school construction and renovation. Additional appropriations will include $23 billion for teaching jobs, and $6 billion for other job programs including local law enforcement, summer jobs for youth, and college work/study programs and AmeriCorps job training.

Conspicuously absent from the House measure are two programs President Obama has promoted as creating “green” jobs: so called “cash for caulkers” incentives for home and business weatherization efforts, and tax incentives for small business new hiring.

Emergency relief measures in the House bill will include $79 billion to provide a six month extension of unemployment benefits, COBRA subsidies, and other “safety net” programs for the jobless. In the expectation that Senate action on the House bill will not happen until next year, the House is at the same time including a two month unemployment and COBRA benefits extension in the Defense appropriations bill, attempting to avoid the break in benefits jobless folks experienced last time Congress stalled action on unemployment extension legislation.

The White House is also proposing a $5 billion addition to tax credits for renewable energy products, in an effort to spur hiring in the manufacturing of such things as wind turbines, solar panels and electric cars. Knowing that the $2.3 billion in the stimulus package for such projects was oversubscribed suggests that users of such new incentives are ready to move at a moment’s notice.

Speaking at a Home Depot store in Alexandria, Virginia yesterday, Obama highlighted the home weatherization programs as part of the administration’s efforts to assist the construction industry, where unemployment has reached 21%. His remarks, however, glossed over the fact that the $5.5 billion appropriated in the stimulus package for energy retrofits of federal government buildings has been painfully slow to percolate out into the economy. GSA so far has allocated only $1.5 billion of the $2 billion appropriated for use in 2009. The agency is racing to allocate the remaining half billion dollars in the final two weeks of this year. Furthermore, of the $2 billion to be allocated, only $89 million, or less than 4.5%, has actually been paid out to contractors.

Reports from contractors in this sector indicate that government projects are replacing only 15% to 30% of the private sector business lost due to the crash of the economy.

New Climate Bill At Odds With Copenhagen Developments

The only really useful document coming out of the U N climate change negotiations in Copenhagen this week is a draft of the REDD draft, Reducing Emissions From Deforestation and Forest Degradation, which will be delivered today to leaders of the 200 or so nations participating in the discussions. This draft document sets up a program for paying developing nations for conserving natural assets which reduce accumulations of carbon dioxide in the atmosphere. The payments are to be funded by industries in developed nations who contribute by purchasing offsets for their carbon emissions into the atmosphere. One top U N official, when asked about the status of talks on other issues, gave a disheartening one word response: “Terrible.” U N Secretary General Ban Ki-moon, speaking of the plan to defer conclusion of a treaty to replace the Kyoto Protocol for another year, said “We do not have another year to deliberate. Nature does not negotiate.”

Meanwhile, back in Washington, Senators Maria Cantwell and Susan Collins have introduced an alternative to the climate change legislation passed earlier by the House, called CLEAR, for Carbon Limits and Energy for America’s Renewal. Directly contrary to the policy emerging in Copenhagen, CLEAR would prohibit American industries from purchasing carbon emission credits based on offsets, such as reforestation or forest conservation in other countries. Under CLEAR, the only trading in emission credits would be permitted among fuel producers, excluding both speculators and energy users from trading in carbon emission credits. The Cantwell/Collins bill would not allow large energy consumers from trading emissions credits as a hedge against rising fuel and power prices. Why is it that some elements in the United States Senate seem to be two steps behind the rest of the world when it comes to twenty first century energy policy?

Gutierrez Introduces Immigration Bill

Illinois Congressman Luis Gutierrez yesterday introduced the Hispanic Caucus version of immigration reform legislation in the House, characterizing the bill he sponsors with nearly 90 other Congressmen as “pro-family, pro-job and pro-security.” The Gutierrez bill would immediately give “nonimmigrant status” to 12 million illegal aliens upon registration with the federal government, payment of a $500 fine, plus application fees, and clearing a criminal and security background check.

After six years, or clearance of the existing backlog of green card applications, whichever comes first, the “nonimmigrants” could apply for lawful permanent resident status. The bill also repeals the 287(g) permission for state and local police enforcement of immigration laws.

While the bill calls for establishment of a permanent system for verifying a person’s work eligibility, it does not specify whether or not the existing E-verify system would be made permanent. Republican Congressmen oppose the bill. House Judiciary ranking member Lamar Smith said “Allowing millions of illegal immigrants to stay and take away jobs from citizens and legal immigrants is like giving a burglar a key to the house.”

Business groups oppose the legislation’s creation of a 100,000 visa random lottery rather than a guest worker program keyed to the unmet employment needs of the American economy.

Friday, December 4, 2009

Lobbyists Drafting Climate Change Treaty

International treaties are a lot like Congressional legislation: if you want a preview of what will be in them, you need to get to be close friends with a lobbyist. The lead lobbying organization at the Copenhagen climate change talks starting next week will be the Climate Action Network, an amalgam of 450 environmental, business and scientific groups worldwide. CAN is already circulating a proposed draft of the new treaty to replace the Kyoto Protocol among delegates and hangers on at the Copenhagen conference.

The CAN draft treaty comes complete with all the required legal language to embody international commitments on greenhouse gas reductions, economic wealth transfers to pay for the costs of environmental controls in developing nations, and a framework for a global cap and trade system of emissions futures. Of course, blanks in the draft exist where diplomats and other government functionaries from participating nations can fill in numbers representing each country’s emission and financial commitments, but except for some minor tweaking to satisfy this or that nation’s particular wants or needs, no government leader or group of leaders from the 192 participating nations needs to bother his or her staff with the details of drafting such an important international treaty – the draft already exists, and the tweaking will be mostly handled by lobbyist cell phone conversations, E-mails and twitter tweets from hallway to hotel room during the conference.

Anyone with a blackberry, a laptop and the price of air fare to Denmark can seek to participate in the real, though informal, corridor conversations which will finalize the details of the next climate change treaty, but only those folks who have already worked at establishing trust and confidence from world leaders is likely to have significant input. If you can stand the Danish winter weather, though, and you have a subscription to twitter, it would really be fun to eavesdrop on the conversations.

Secret Health Care Reform Deals Building Up In Managers’ Amendment

While the Senate floor debate on the health care reform legislation continues along predictable partisan lines, with speeches concerning dramatic reductions in grandma’s Medicare benefits and the evils of federally funded abortion coverage, the real version of the Senate bill continues to be formed deal by deal in secret in Majority Leader Harry Reid’s Senate office just across the corridor from the stately Senate Chamber in the nation’s Capitol. Reid meets privately, one on one, with Democrat Senators, asking them what they need in the managers’ amendment he will present right before the final floor vote.

Managers of legislation in the Senate have the right to accept suggested amendments to the text of legislation which has been published to members and made available to the public, and to make those changes in the bill under debate right up until the voting begins. So, neither fellow Senators nor average citizens really know what the Senate is voting on until the last second. Reid isn’t telling anyone other than the particular Senator requesting a special provision in the managers’ amendment what he is promising, and no one at all but Reid knows what the aggregate text of the managers’ amendment looks like as time marches on.

We do know that Senator Ben Nelson of Nebraska will be proposing a floor vote on his amendment which would prohibit abortion coverage altogether for anyone buying insurance from the public option and anyone who receives a federal premium subsidy. Nelson’s proposal is even more restrictive than the Stupak amendment in the House legislation.

Meanwhile, Republican amendment proposals include everything from their pet limitations on medical malpractice non-economic damages to a $400,000 ceiling on salaries of health insurance company executives.

Mercer Consulting released results of a survey shows 70% of the businesses say they will cut the health benefits available to its employees rather than pay the proposed tax on Cadillac health insurance coverage. So much for President Obama’s promise that “if you are happy with your present health insurance, you can keep it.” Sixty-three percent of businesses responding to the survey said they would cut back benefits rather than pay the tax, and another 7% said they would terminate their health plans altogether. Only 16% of those who would cut benefits said they would return any of the savings to employees in the form of higher pay. If these numbers play out, health care reform will have a negative effect on about 89% of Cadillac plan participants, most of whom are trade union members.

Thursday the Senate rejected, by a vote of 58-42, a Republican amendment to the health care bill which would have restored the $500 billion in Medicare cuts the Democrats are using to “pay for” the enormous cost of the health care reform legislation.

Estate Tax Extension Faces Suffocation In The Senate

Thursday’s House vote of 225-200 in favor of permanently extending the estate tax at a rate of 45% on individual estates over $3.5 million and family estates over $7 million is no guarantee that the Senate will even take up the bill before the estate expires January 1, 2010. Senate Minority Whip Jon Kyl says Democratic Congressmen and Senators will be in for a rude shock when the estate tax revenue disappears in a puff of smoke New Years Day. Republicans universally oppose extending the tax, and enough Democrats crossed the aisle to vote against the extension in the House to suggest that mustering 60 Senate votes to continue making death a taxable event could be a real challenge for Senate leadership.

Jobs Data Points To Stabilization

Council of Economic Advisers Chair Christina Romer released a statement today commenting on the 0.2% drop in nationwide unemployment in which she characterized employment gains in temporary help services as hopeful for the future of the American economy. “It is important not to read too much into any one monthly report, positive or negative,” Romer said. “Bit, it is clear we are moving in the right direction.”

Yesterday, President Obama hosted a conference of 130 business and labor leaders at the White House to discuss job creation measures the federal government might undertake in the next month or two to keep the employment trend moving in a favorable direction. Stressing the unprecedented federal deficits and the strain they produce on the national economy, Obama pointed out that Washington presently lacks sufficient resources to fund direct government job creation legislation. “Ultimately, true economic recovery is only going to come from the private sector,” Obama told the assembled business and labor leaders and academic economists. “We have to face the fact that our resources are limited.” Obama is expected to detail forthcoming legislation to spur job creation and extend jobless relief for the unemployed in a speech next Tuesday morning at the Brookings Institution.

Expectations are that Speaker Pelosi and her Congressional colleagues will soon introduce legislation funding job creation programs with the $150 billion left over in the Troubled Asset Relief Program, despite Treasury Secretary Geithner’s preference to use the cash to pay down the national debt. Rhode Island Senator Jack Reed today proposed additional federal borrowings of as much as $100 billion to pay for one year of extended unemployment benefits and COBRA health care subsidies for those Americans still out of work. Reed may seek to attach his legislation to the forthcoming omnibus appropriations bill. About a million unemployed Americans will exhaust their benefits in January, and by March 2010 that number could rise as high as 3 million.

Additional proposals could include wage subsidies or tax benefits for hiring new workers.

Tuesday, November 24, 2009

Climate Change Advocates Move Slowly, Embracing Nuclear Power

Now that world leaders have acknowledged the impossibility of coming to any binding agreement at next month’s Copenhagen conference, Senate action on climate change legislation has lost its urgency for the time being. The Obama administration, however, still wants a comprehensive cap and trade measure, like the House bill passed earlier this year, rather than a more limited measure targeted at the electric power production industry, as some legislators have been heard to suggest.

White House climate adviser Carol Browner said last week that incremental greenhouse gas emission reduction measures are not in the cards. “We need comprehensive energy reform,” she said, including power plants, refineries, factors, farms and other sources of carbon emissions. She said she expects negotiation of an international climate treaty to replace the Kyoto Protocol will take up to a year after the Copenhagen conference.

Meanwhile, former Greenpeace commando Stephen Tindale, who once broke into a nuclear power facility to scrawl “Danger” on the side of the reactor building, acknowledges that significant greenhouse gas emission reduction in future years will depend upon construction of a large number of nuclear generating plants around the world. “It’s really a question about the greater evil – nuclear waste or climate change. But there is no contest any more. Climate change is the bigger threat, and nuclear is part of the answer,” Tindale says. “Like many of us, I began to slowly realize we don’t have the luxury any more of excluding nuclear energy. We need all the help we can get.”

Jobs Bill, Maybe, Wall Street Transaction Tax, Maybe Not

House Speaker Nancy Pelosi scoffs at the idea floated last week by some of her Democratic colleagues that new job creation legislation could be funded by a tax on stock, bond and futures transactions on Wall Street financial markets, and Obama administration officials are equally cool to the idea, though some executive branch officials have spoken favorably in recent days about the desirability of “targeted” proposals for quick new laws to boost American employment. Oregon Congressman Peter DeFazio and New York Congressman Michael Arcuri are circulating a proposal for a financial transaction tax to raise $150 billion every year. Pelosi says such a new tax could drive Wall Street jobs overseas. Treasury Secretary Timothy Geithner echoes that such a tax would be “inappropriate” for the United States.

Vice President Biden’s chief economic adviser Jared Bernstein says, though, that the administration is looking for new ways to make sure the economic recovery is not a jobless one. Bernstein’s suggestions include direct public works programs such as hiring the jobless to board up vacant buildings, help with child care, and paint school buildings.

Meanwhile, at a hearing last Thursday before the House Oversight and Government Reform Committee, Congressmen continue attacking the claim on that the $787 billion stimulus package has created 640,000 jobs so far. GAO reported at the hearing that the web site was replete with “a range of significant reporting and quality issues,” including 60,000 jobs reported as created without any dollars being spent, and 9,000 reports of money spent with no jobs created. House Oversight and Government Reform Chairman Edolphus Towns said after hearing the GAO testimony, “It is clear that errors found by GAO and others should be corrected immediately, not months later, no matter how difficult.”

Finally, economists are beginning to challenge President Obama’s campaign emphasis on green job creation as a solution to continuing economic growth. Georgia State’s Economic Forecasting Center Director Rajeev Dhawan says green jobs are “not the spark. This is not the solution to the current big unemployment problem.” His sentiments are seconded by Manhattan Institute economist Max Schulz: “For all the talk about green job creation, there’s an unavoidable problem with renewable energy technologies and the policies that promote them: From an economic standpoint, they’re big losers. Renewables can’t produce the large volumes of useful, reliable energy that our economy needs at attractive prices. Government subsidizes renewable because – all things being equal – the free market won’t.”

A recent survey by the Transportation Construction Coalition is also putting a damper on the pet political theory that additional funding for road and bridge projects will be a job saving legislative measure. Despite injecting $27 billion into such projects through the stimulus package, more than a million construction sector jobs have been lost in the past 12 months. Furthermore, this month’s Coalition survey indicates that 44% of road and transit contractors expect to lay off more permanent employees this year, even though they have received stimulus supported contracts.

Thursday, November 19, 2009 Numbers Embarrass Obama’s Bureaucrats

News reports of grievous mistakes in numbers reported for job creation on the stimulus web site have been popping up ever since the first claims by the Obama administration that the stimulus appropriations have saved or created 640,000 jobs to date. Now the worst of all seems to be a report that stimulus spending of $761,420 in Arizona’s 15th Congressional District has created 30 jobs there. The problem? There is no 15th Congressional District in Arizona!

House Appropriations Chairman David Obey said it best: “The inaccuracies are outrageous, and the administration owes itself, the Congress, and every American a commitment to work night and day to correct the ludicrous mistakes. We designed the Recovery Act to be open and transparent. Whether the numbers are good news or bad news, I want honest numbers and I want them now.” In a surfeit of understatement, Vice President Biden acknowledged, “We know this is not 100% accurate. Further updates and corrections are going to be needed.”

Job Creation On The Agenda

Quick action to stimulate employment and halt rising unemployment will be the next agenda item before Congress adjourns for Christmas. Leaders in both houses are already pressing for a compromise six month extension of the federal Highway Trust Fund at current levels, so the relevant committees can begin work immediately on a permanent six year reauthorization bill. Senate forces wanted an 18 month extension, while House Transportation and Infrastructure Chairman James Oberstar wants to finish the six year bill before Congress adjourns for the holidays. Senator Barbara Boxer, Chair of the Environment and Public Works Committee, has already accepted the six month extension strategy, and says a full six year reauthorization measure is her committee’s next priority.

Chairman Peter DeFazio of the House Highways and Transit Subcommittee, says that rising unemployment makes “infrastructure a front burner issue.” While Republican politicians say unemployment rates above ten percent show failure of the earlier stimulus legislation, House Majority Leader Steny Hoyer responds that Republicans consistently vote against economic growth bills. “Votes don’t lie. Republicans have consistently said ‘no’ to creating jobs and helping Americans during this recession,” Hoyer contends.

The renewed talk of job legislation is also bringing out lobbyists. The U. S. Conference of Mayors and the Associated General Contractors both press for transportation appropriations targeted at urban areas, where construction sector unemployment tops 18%. The Mayors are also encouraging votes in favor of increased block grants for energy efficiency and conservation, community development, and police services. Solar panel makers are lobbying for a new 30% tax credit for investments in equipment to make solar energy components, in addition to the grants already appropriated to support solar panel factory construction in California and wind turbine factory expansion in Idaho.

Proposals to fund all this job creation legislation include a new Wall Street financial transaction tax of 0.25% on stock trades, and 0.02% on commodity future trades. The annual expected revenue of $150 billion would go $75 billion for national debt reduction, $55 billion for miscellaneous job creation programs, and $20 billion for highway and other infrastructure construction. Retirement, education and health savings transactions would be exempted from the tax.

Another proposal being floated by Congressmen Barney Frank, Peter DeFazio and Earl Blumenauer is to dip into the $317 billion in as yet unspent TARP funds for infrastructure construction, assistance to homeowners facing foreclosure, and loans to small businesses. Any other unspent TARP cash or money repaid by financial institutions which got federal assistance, would go toward paying off the national debt. Unless legislators act on such measures before it adjourns December 18, Treasury Secretary Timothy Geithner is expected to notify Congress that he will extend the TARP program through October 2010.

Wednesday, November 18, 2009

Copenhagen Climate Change Summit Expectations Slashed

The Obama administration is backpedaling rapidly on the eve of the Copenhagen conference for negotiating a replacement for the soon to expire Kyoto Protocol on greenhouse gas emission controls. Deputy National Security Adviser for Economic Affairs Michael Froman said Monday “It was unrealistic to expect a full, legally binding international agreement to be reached between now and when Copenhagen starts in 22 days.”

Congressional leaders acknowledge that climate change measures in the Senate have been bumped off the fast track by the extended health care reform debate and the need to focus on job creation and financial market reform before any detailed cap and trade emissions program can be put into place. UN Secretary General Ban Ki-moon expects the Copenhagen talks to result in little more than a political agreement to continue negotiations on the terms of a potential binding replacement treaty.

Senator Dick Lugar acknowledges that the present is an especially difficult time for US negotiators to enter into discussions about payments to developing nations to help them convert to clean technologies and cope with already occurring climate changes. “There’s the thought of transfer of wealth to so-called developing countries and billions of dollars in the midst of this [American unemployment at 10.2 %]. This is real money. All I’m saying is, get real,” Lugar pronounced. President Obama and other world leaders are now looking for a two step process, with Copenhagen representing the first step: a nonbinding political agreement calling for greenhouse gas reduction and aid to developing economies. Step two will be another meeting late next year to negotiate a binding treaty, presumably after Congress has committed the US to specific emission reduction goals.

Small And Family Business Tax Breaks In The Works

Politicians believe small businesses are the job engine of the US economy, and besides direct job creating measures, legislative leaders are also proposing work on a couple tax breaks for family owned and other small businesses before this session of Congress comes to a close. Despite Obama administration resistance to a permanent fix for the estate tax this session, House Ways and Means Chairman Charles Rangel is still pushing for permanent changes in the estate tax.

On the Senate side, Senators Thomas Carper and George Voinovich have introduced a bill to index the estate tax exemption to inflation. Their measure carries a cost of $23 billion in lost revenue to the federal government. A different measure supported by Congressmen Shelly Berkley and Senator Blanche Lincoln, would lower the estate tax rate to 35% and raise the exemption to $5 million, costing a revenue loss of $70 billion altogether.

Carper and Voinovich tout their proposal as a compromise measure. “For the sake of families and small businesses, we can’t let the estate tax go back into full effect,” Carper says, “and yet as long as we are running huge budget deficits we can’t afford full repeal, either.”

In an effort to give a break to some businesses which entered unwittingly into discredited tax shelter investments, the House Ways and Means leadership and the Senate Finance leadership are proposing a measure to relieve small businesses from fines grossly disproportionate to the tax benefits they purported to receive with the barred tax shelters. Some businesses have been fined as much as $300,000.00 for claiming an improper tax benefit of $15,000.00. House Ways and Means Oversight Subcommittee Chairman John Lewis spoke about such situations: “This is not fair. Small businesses should not be run out of business by tax shelter penalties aimed at big corporations.”

Last June the IRS stopped collecting the disproportionate penalties, to give Congress an opportunity to correct the situation. A bill introduced in both houses of Congress Monday would limit the penalty to 75% of the tax benefits improperly claimed.

Jobs Are Job One

House Majority leader Steny Hoyer said Tuesday that he and other House leaders are pushing for a December 18 floor vote on another job creation bill. He said the measure will focus on public sector jobs, job generating tax credits, infrastructure projects, and assistance to state governments. “Clearly, 10.2% unemployment is unacceptable and is causing great pain to literally millions of people around the country,” Hoyer stated.

Hoyer added that he believes the legislation ought to include another extension of unemployment benefits and health insurance premium assistance for those out of work.

On the Senate side, Majority Leader Harry Reid says his first priority after finishing health care reform legislation will be a jobs bill. Senate Democratic Policy Chairman Byron Dorgan echoes that sentiment. “With 10% unemployment, the first priority for our government is to focus on helping the private sector create new jobs,” Dorgan announced. Leaders in both houses are now considering the possibility that a six year Highway Trust Fund reauthorization measure could be designated a jobs bill and pushed through Congress on a faster track than anyone thought possible a few weeks ago.

Meanwhile, there are signs that the North American economy may be turning around. Since the beginning of this year, 6,080 new capital investment projects totaling $350.9 billion have begun in the U.S. and Canada. Another 3,633 capital projects, representing investment of $1.2 trillion, though delayed, are still expected to begin in a year or two. The discouraging factor is that 2,835 investment projects, representing $283 billion of investment, have been put on hold indefinitely or cancelled outright.

Highlights of economic investment are the light rail sector, with $17 billion of new construction begun this year, and semiconductor manufacturing, with $10 billion total investment in 2009.

Friday, November 6, 2009

Back To Square One On Climate Change

Senator Barbara Boxer’s action in discharging the climate change bill from her Environment and Public Works Committee without and Republican committee members in attendance has angered so many leaders on both sides of the aisle in that chamber that three Senate leaders have determined to go back to the drawing boards and craft an entirely new measure for consideration, rather than continuing to advance the Kerry/Boxer bill reported out Thursday.

Democrat John Kerry, Republican Lindsey Graham and Independent Joe Lieberman are already working on Plan B, a bill to promote green job creation while protecting the coal and steel industries, expanding nuclear power production, authorizing more offshore oil drilling, and subsidizing renewable energy research and development.

The possibility that plan B will focus on job creation rather than reducing carbon emissions and fighting climate change has fractured the environmental interests into warring factions. One side of the fissure, including the Environmental Defense Fund, is already putting out ads featuring energy made in America, 1.7 million “green jobs,” and reduced dependence on foreign oil. The other side, including the World Wildlife Fund and the Center for Biological Diversity, excoriates what they see as dilution of the global warming alarm message in favor of soft soaping ads they call “climate-light.”

Meanwhile, with Senate leaders acknowledging that a floor vote in any sort of climate change bill in the Senate won’t likely happen this year, energy lobbyists are ramping up their spending, and representatives of African nations are walking out of negotiations in Barcelona preliminary to the UN conference on a replacement agreement for the Kyoto Protocol set for December in Copenhagen. It remains to be seen whether the Boxer maneuver is a complete barrier, or just a speed bump on the road to Congressional action later in the calendar.

Military Construction Appropriation Coming Soon To Your Senate Floor

Senate Majority Leader Harry Reid said he hopes the Senate will pass the military construction appropriations bill early next week, in time for the Veterans’ Day holiday. The bill appropriates a total of $133.9 billion for military and veterans’ affairs, including a total of $23.2 billion for military construction projects not funded in the stimulus package.

Senators Rip Texas Wind Farm Use Of Chinese Made Turbines

In a blinding flash of protectionism, New York Senator Charles Schumer has written a letter to Energy Secretary Steven Chu, asking Chu to block federal funding for development of a huge $1.5 billion Texas wind farm which will be build using turbines manufactured in China. The project is expected to create 330 jobs in Texas and 800 jobs in the Chinese factory which will build the turbines. “The purpose of the Recovery Act was to jump start the economy to create and save jobs – American jobs,” Schumer wrote. “American taxpayer dollars should not be used to finance those Chinese jobs.”

Walt Horniday, president of one of the U. S. partners in the project, responded, “This project will not take place without the planned benefits of the American Recovery and Reinvestment Act. Any characterization of this planned project as anything other than an economic development lifeline to the wind industry during tough economic times is just inaccurate.”

National Republican Senatorial Committee Chairman John Cornyn of Texas used the wind farm project as one example of a failure of Obama administration economic policies. “This just shows how ridiculous this whole stimulus proposal was,” Cornyn said, acknowledging, however, that “Texas would like to have the investment.” Cornyn seems to forget that the American Recovery and Reinvestment Act was crafted in Congress, and apparently passed without much thought by Senators and Representatives as to what American businesses would do with the $787 billion they were doling out.

Thursday, November 5, 2009

Boxer’s Committee Reports Out Climate Change Bill, Hopes For Copenhagen Conference Dim

The Senate Environment and Public Works Committee chaired by Barbara Boxer reported out the Kerry/Boxer climate change legislation on a vote 0f 11-1, with none of the Republican members in attendance. The lone Democrat voting against the bill was Senate Finance Committee Chairman Max Baucus, who strongly opposes the bill’s 20% greenhouse gas emission requirement. Baucus’ opposition to the bill will make it difficult to secure passage in a floor vote.

The 950 page legislative measure must still be pieced together with the work product of five other Senate committees having some sort of jurisdiction over global warming and greenhouse gas emission legislation, and a floor vote in the Senate looks unlikely before next year.

State Department Special Envoy on Climate Change Todd Stern holds out little hope of any significant action on an international climate change treaty at the Copenhagen conference coming up next month. The current treaty, the Kyoto Protocol, which the U.S. refused to ratify, expires in a little over a year. Noting that developing nations see carbon emissions as a problem created by developed economies, and worry that their own economic growth will be suppressed by a climate change agreement restricting their emissions, Stern said “The mentality that looks at the world through those lenses will not produce results.”

Nevertheless, in the absence of US action establishing a basis for belief that the economies of the first world are willing to negotiate in good faith, there is little chance that anything will come out of Copenhagen beyond a calendar for future talks. Range Of Mistaken Data Expands

It isn’t just education where job creation figures reported on the federal RAT Board website have proven inaccurate. In addition to the situations we covered earlier where schools were reported to have saved or created more jobs than they have teachers on their payrolls, it seems other areas of the stimulus spending are also over reporting job preservation or creation statistics.

For a particularly egregious example, Fayetteville National Cemetery in Arkansas used $1,047 in stimulus cash to purchase a single lawn mower. The agency reported to that its lawn mower purchase saved or created 50 jobs. Huh?

The real criticism of the stimulus spending, beyond the obviously outrageous job creation claims of some of the reporting government agencies, is that, despite President Obama’s promise that 90% of the stimulus created jobs would be in the private sector, of the 640,000 jobs the web site claims were created or saved by stimulus appropriations, 325,000, or more than 50%, are in the public sector. So much for accuracy of economic predictions.

Postal Service Shipping Rates Increasing

If your business ships documents or products using U. S. Postal Service flat rate boxes, widely advertised as an economical and efficient shipping method on TV, your costs will go up the first of next year. While small flat rate box shipping cost will remain $4.95, medium box rates will increase from $10.35 to $10.70, and large box rated will go up from $13.95 to $14.50.

Express mail envelope rates will increase from $17.50 to $18.30. Standard, parcel post and first class mail rates will remain unchanged.

Wednesday, November 4, 2009

House Health Care Reform Measure Sharpens Differences

Tuesday night’s release of a 42 page managers’ amendment to the 1990 page House health care reform bill sharpens the focus of Congressmen on the differences within the Democratic caucus which still plague efforts to marshal the required 218 votes to pass the legislation. Still missing from the 2032 page legislative package are the provisions respecting denial of federal funds for abortion coverage, and for excluding illegal immigrants from participation in federally subsidized health insurance.

The fact that these two issues remain the most contentious within the Democratic caucus gives Republican Congressmen hope that there is still a chance to delay or derail health care reform altogether. House Rules Committee Chair Louise Slaughter expects the House floor vote on the health reform measure to take place Saturday, since language for the abortion provision is still being worked out, and will have to be included in the rule on the bill, expected to come up for a Rules Committee vote at 2:00 p.m. Friday. “We’re further trying to craft language,” said Congressman Jim Langevin, leaving House Majority Leader Steny Hoyer’s office this afternoon. “We don’t want the abortion issue to be the issue that derails universal health care reform.”

Republicans are already bridling at the move to leave the abortion provision to consideration in the vote on the rule, since the proposed language will not be made public for 72 hours before the floor vote. Michael Steel, spokesman for House Minority Leader John Boehner, complained, “If Speaker Pelosi intends to address critical issues like taxpayer funding for abortion in the rule, they should make it available for the American people to read for 72 hours. Transparency means putting the whole bill online for 72 hours.”

New things which are covered in the terms of the managers’ amendment include a $1 billion dollar fund available to states for use in controlling health insurance premium increases, language forcing insurers to disclose pricing differences between on exchange and off exchange policies, limits on “excessive or unjustified” health premium increases, and an estimated $24 billion “pay for” ending paper mill tax credits for burning “black liquor” as a cellulosic alternative fuel.

In the meantime, in efforts to focus the political differences over health care policy, Republicans have introduced their own 219 page health care reform measure, eliminating mandates for citizens to buy coverage and for employers to offer it, and limiting malpractice damage awards for pain and suffering and impaired quality of life to $250,000 in any case of injury or death.

Senate Majority Leader Harry Reid predicts debate on health care reform in that chamber will spill over into December, and would not commit to being able to send a bill to the Oval Office before the end of this year. “We’re not going to be bound by any timelines. We need to do the best job we can for the American people,” Reid announced at a news conference.

Text of Managers’ Amendment:

Text of House Bill:

Text of Republican Alternative: Numbers Miss By A Mile

Figures don’t lie, and the teacher will check your work. Obama RAT Board officials responsible for reporting on the economic effects of the spring’s stimulus legislation must have missed class the day that lesson was presented. In a rush to produce figures showing a positive effect of the $787 billion appropriation on the American economy and employment, the website got it wrong – way wrong. Just looking at numbers reported on and comparing them to what we know about local suburban school districts here shows that “teaching jobs created or saved” as reported on the federal website exceed the total number of teachers employed in the district. Who knows what other mistaken numbers are contained in the federal information? says the $1.25 billion in education funding received by Illinois schools from the stimulus package saved or created 14,330 teaching jobs in the state. A quick review of district by district reports demonstrates, however, that the reported number on the website could be off by more than 20%. Some examples:

Dolton/Riverdale: says 382 teaching jobs were created or saved. The district employs only 240 teachers altogether.

Kankakee: says 665 teaching jobs were created or saved. The district employs only 600 teachers altogether.

North Chicago: says 473 teaching jobs were created or saved. The district employs only 290 teachers altogether.

Wilmette: says 166 teaching jobs were created or saved. The district’s superintendent says there were no teaching jobs created or saved.

The average margin of error in just these four examples is over 22.6%. That’s just not “close enough for government work.”

Chinese Drywall Situation Under Health Scrutiny

Congress, the Consumer Produce Safety Commission, USEPA and the Centers for Disease Control are investigating whether smelly Chinese drywall installed in 100,000 new homes in 30 different states is a health hazard to the families living in the houses. Acknowledging the existence of indoor air contamination in the affected homes, which are the subject of civil lawsuits in Louisiana, Florida and other states, Michael McGeehin of CDC says other contaminants besides sulfurous gasses have been identified in the homes in question, including formaldehyde. Health officials say the formaldehyde does not come from the drywall, and further testing is needed to determine whether the medical symptoms of home occupants are caused by gasses emitted from the drywall.

Federal officials awaiting test results say it may be another month before they have answers to the health issues plaguing people who live in the homes, where dramatic corrosion of copper water pipes and air conditioning coils is just one of the problems the drywall is causing. CPSC head Inez Tenenbaum has talked with Chinese government officials about the drywall issue, but has received no commitments of help in dealing with the problem from China.

Record Hill In Maine Getting Wind Farm Despite Congressional Foot Dragging

Even though the timetable for Congressional action on climate change legislation keeps getting pushed further and further down the calendar, some renewable energy projects are proceeding without waiting to see what Congress has in mind for the future of fuel and power in America. Record Hill Wind, a project being built along a north to south ridge line in Roxbury, Maine, is already under construction. The project will include 22 wind turbine generators along the peak of the ridge line, optimally arranged to catch the prevailing westerly winds from Canada and New Hampshire.

The 50.6 megawatt facility will produce 130 million kilowatt hours of power annually – enough to power every household in Oxford County. Delivery and erection of the turbine generators will start next June, with the facility to be commissioned in early fall 2010.

Union Pacific And CenterPoint Building $370 Million Container Terminal In Joilet

Construction is underway on a 785 acre rail/highway container terminal at the Union Pacific property in Joliet, near I-55 and I-80, with general contractor Ragnar Benson already putting down over 18 miles of railroad tracks. The fast track construction project is expected to create 1,200 construction jobs between now and June 2010.

William Charles construction is the site work contractor, and it will be placing 470,000 tons of ballast underneath the 10 rail tracks in the project. The facility will ultimately handle half a million containers a year.

Mandatory Paid Sick Leave Bill Introduced

House Education and Labor Chairman George Miller is pushing a bill to require employers to grant paid sick leave if they ask workers with the H1N1 flu or other contagious illness to stay home from work. Miller says 50 million Americans have no paid sick leave, particularly in the food service and hospitality industries, and that these workers are the most likely to face employer requirements to stay away from work if they get sick. Employees, Miller insists, should not have to choose between their paychecks and the health of coworkers and customers.

The bill applies to all businesses with 15 or more employees, but exempts any business already providing at least five days of paid sick leave to workers. Miller plans to hold a hearing on the bill this month, and bring it to the floor for a quick vote before the flu season gets info full swing.

Friday, October 30, 2009

Climate Change Coal Compromise Soothes Baucus

Montana Senator and Finance Committee Chairman Max Baucus is backing down from his considerable disappointment expressed during hearings earlier this week on the Kerry/Boxer climate change measure, now that incentives have been written in for “early actors” who adopt carbon sequestration technology at their coal fired power plants if they can capture 50% of greenhouse gas emissions. Montana has the largest coal reserves of any state in the nation, but they are mostly undeveloped because transportation costs for Montana coal price it out of the market in rust belt states with numerous coal fired power plants. Construction of new, efficient, carbon capturing coal fired power plants could develop a big new market for Montana coal.

Pennsylvania’s Arlen Specter and Ohio Coal Association President Mike Carey are both still opposing the Kerry Boxer bill because they say it will be a job killer in their states. Senate Environment and Public Works Chair Boxer has scheduled a markup of the Kerry/Boxer bill in her committee beginning Tuesday, following three days of hearings featuring 54 witnesses on the bill this week. Republican members of the committee have said they will delay the measure by boycotting the markup, which would deny Boxer the quorum required under Senate rules for conducting a markup of the bill.

Senator Durbin Says Front Loaded Infrastructure Spending Should Be The Next Stimulus

Although no one has as yet proposed a specific mechanism for funding a six year, $500 billion reauthorization of the federal Highway Trust Fund, it seems everyone in Congress expects that will be the funding level once new revenues are decided upon. Illinois Senator and Majority Whip Dick Durbin suggested yesterday that one additional move the folks in Washington can make to further stimulate the economy would be to “front load” that spending, instead of using the money evenly across the six year time period.

Durbin’s idea is to allocate $150 billion to the first of the six years, accelerating road, bridge, transit and waterway construction projects to the present, while leaving $70 billion per year for the remaining five years of the reauthorization. Durbin is enlisting Pennsylvania Governor Ed Rendell, California Governor Arnold Schwarzenegger and New York City Mayor Michael Bloomberg in his effort. While House Ways and Means Chairman Charles Rangel has not proposed any revenue measure for funding the $500 billion, Durbin says Senate Finance Chairman Max Baucus “has come up with enough money to take us through next year.”

Meanwhile, the continuing resolution attached to the Interior – Environment appropriation bill on its way to the Oval Office today extends the Highway Trust Fund at current levels through December 18, 2009, and Senate Environment and Public Works Chair Barbara Boxer is still at loggerheads with House Transportation and Infrastructure Chairman James Oberstar respecting how to keep funding road projects currently underway until revenue measures supporting a six year reauthorization can be proposed and passed.

Consortium Using Stimulus Cash To Erect Chinese Made Wind Generators

A consortium of American and Chinese companies, using Chinese bank financing and US government grants and loans under the stimulus legislation, plans to build a $1.5 billion wind farm on 36,000 acres in West Texas, using 240 2.5 megawatt wind turbines manufactured in Shenyang, China.

Construction is scheduled to begin next March, when the first turbines will be arriving on site. The project will create 300 temporary and 30 permanent jobs, and when completed, should generate 600 megawatts of wind power. Companies involved in the project include A-Power Energy Generation Systems, U. S. Renewable energy Group, and Cielo Wind Power.

Thursday, October 29, 2009

Broadband Oversight Hearings Highlight Burdensome Grant Paperwork

House Small Business Chair Nydia Velazquez gave Commerce Department and Agriculture Department officials an earful Wednesday over the complexity of the 200 page long grant application for businesses seeking to extend broadband coverage into communities needing the most help. The grant process has fallen nearly a month behind schedule, and Velazquez complained that the application paperwork discouraged otherwise viable applicants from getting grants and loans to extend service to folks needing help the most. “More often than not, small businesses can’t afford in house lawyers, accountants, or support staff,” she pointed out in asking the bureaucrats to find a more streamlined grant process.

Small Business ranking member Sam Graves echoed her concerns. “As the first round of broadband funding concludes,” he remarked, “it is imperative that government make changes.”

Greenhouse Gas Limit Debate Moves To Senate

How far should the United States reduce greenhouse gas emissions below their 2005 levels? This issue has plagued the drafters of climate change legislation in the House, which ultimately passed a measure establishing the goal of a 17% reduction by 2020. Now, in the Senate Environment and Public Works Committee hearings on the Kerry/Boxer bill proposing a 20% reduction, Senate Finance Committee Chairman Max Baucus says he believes the proposed 20% reduction will be too much of a drag on economic recovery, and that he has serious reservations about the Kerry/Boxer bill.

Senate Environment and Public Works Chair Barbara Boxer can get her bill reported out of her committee without Baucus’ vote, but doing so would highlight a leadership split which would make floor debate rancorous and passage difficult. Meanwhile, the Obama administration’s budget called for only a 14% reduction. Seems like lawmakers have a long and winding road to travel before a final piece of legislation materializes on this issue.

Wednesday, October 28, 2009

Broadband Construction Stimulus Grant Program 288% Oversubscribed

Yesterday’s hearings at the Senate Commerce Committee regarding oversight of the stimulus package grants of $7.2 billion for construction of broadband networks in unserved and underserved areas of the nation revealed that 2,200 applications seeking a total of $28 billion in funding have been submitted against the appropriation. Commerce Committee Chairman Jay Rockefeller and Missouri Senator Claire McCaskill both complained about the fact that responsibility for awarding the funds is divided between the Commerce Department’s National Telecommunications and Information Administration and the Agriculture Department’s Rural Utilities Service. Have they forgotten that they are part of the Congress which set up the stimulus package that way?

Meanwhile, Comcast and a number of other internet and cable TV providers are complaining that a large number of the grant applications, supposedly intended to get internet service to citizens in areas of the nation where none is available, propose network construction in areas where the companies already provide service.

Senate Cap And Trade Hearings Highlight Democratic Party Fault Lines

Ongoing hearings in the Senate Environment and Public Works Committee on the Kerry/Boxer cap and trade bill are bringing to light fissures in the Democratic Party block regarding the proposed climate change legislation. Opposition to Senator Barbara Boxer’s chairman’s mark of the 923 page bill, released Friday, was voiced by both Senator Arlen Specter and Senate Finance Committee Chairman Max Baucus. Baucus says he has serious reservation about the measure’s goal of reducing U.S. greenhouse gas emissions 20% below 2005 levels by a 2020 deadline. Specter wants Congress, rather than USEPA, top set the emission limits. “There’s a great deal to be gained by certainty so people can make plans,” Specter told USEPA Administrator Lisa Jackson. “That’s our job.”

Republican critics of the Kerry/Boxer bill are threatening to delay forward movement of the proposed law by skipping meetings of the Committee scheduled to mark up the bill, thereby denying Boxer the quorum required for holding a mark up under Senate rules. They complain about USEPA’s failure to run any economic modeling of the Kerry/Boxer bill, which EPA justified based on the similarity of the measure to the House passed bill EPA already analyzed. In the face of such a maneuver, Boxer’s committee could report the bill out without a markup, under Senate Rule 14.

West Point Public Works Privatization Plans Stifled

Army plans announced last March to contract with Ginn Group of Peachtree City, Georgia, to take over plumbing, carpentry and grounds maintenance services at the United States Military Academy at West Point, New York, have fallen victim to a GAO report contending the plan would be a waste of tax dollars, and political opposition from New York Congressman Maurice Hinchey. Senator Charles Schumer announced Monday that Secretary of the Army John McHugh proposes to scrap the privatization plans, though the Army has taken no formal action yet.

Defense Contract Audit Agency Head Reassigned

Defense Contract Audit Agency Director April Stephenson, under criticism for creating “a work environment not conducive to performing quality audits,” has been reassigned to the staff of Undersecretary of Defense Robert Hale, and will be replaced by Army Auditor General Patrick Fitzgerald, effective November 9. Stephenson was roasted in a GAO report last month for emphasizing the churning out of reports over independence in auditing defense contracts.

Highway Trust Fund To Advance By Baby Steps

Senate Environment and Public Works ranking member James Inhofe said yesterday that it looks like the federal Highway Trust Fund will get another one month funding extension at current levels while House and Senate leaders continue trying to iron out their differences over proceeding towards a full six year reauthorization and the revenue sources for funding $500 billion over the six year reauthorization period. Senate leaders fear the revenue debate will get in the way of work on health care reform and climate change, the Obama administration’s apparent top priorities. Meanwhile, a construction industry already on life support awaits news regarding whether there is any medicine in the cabinet to keep it alive while Congressional leadership postpones the search for a cure.

Monday, October 26, 2009

Oberstar Still Insisting On Highway Trust Fund Reauthorization By Year End

Now that Senate leaders have backed off an 18 month temporary extension of the federal Highway Trust Fund, House Transportation and Infrastructure Chairman James Oberstar is digging in his heels and insisting on a much shorter two month extension, with permanent reauthorization to be enacted before the end of this year. Oberstar has been discussing the temporary fix with Senate Environment and Public Works ranking member James Inhofe, and describes their meeting as a “nice conversation,” but still wants to stick with a two month temporary extension bill he plans to bring to the House floor this week. “The planets are in motion,” Oberstar remarked.

Senate Majority Leader Harry Reid plans to bring a bill for a temporary six month extension to the Senate floor, also this week. Soothsayers predict a conference report calling for extending present funding levels by four months.

EPA Sees 180 New Nuclear Power Plants Over The Horizon

USEPA’s analysis of pending climate change legislation predicts construction of 180 new nuclear power reactors by 2050, more than doubling the currently operating 104 reactors in 31 states, which provide 20% of the nation’s electric power. Presently the Nuclear Regulatory Commission has only 30 applications pending for new reactor construction. At an estimated investment of $10 billion each, the projected increase represents total projected cost of nearly two trillion dollars.

It will be interesting to see whether environmental groups come out in greater force against nuclear waste storage or carbon sequestration as the debate over details of greenhouse gas reduction legislation proceeds in Congress. Either way, nasty stuff is getting buried underground in someone’s back yard.

Sunday, October 25, 2009

Unemployment Benefits Extension Still Tied Up With Amendments

The cloture vote in the Senate on extending unemployment benefits for an additional 14 weeks in all states, and 20 weeks in states with more than 8.5% unemployment, set for last Friday didn’t happen. The vote is rescheduled for Tuesday afternoon, depending on whether or not Senators can agree on proposed amendments on extending and expanding the homebuyer tax credit in the stimulus package, and extending business loss tax carry back provisions an additional two or three years.

Present leadership plans are to pass whatever final package is approved in the Senate, and send it to the House without any conference committee, for action later this week. Senate Majority Leader Harry Reid and Senate Finance Chairman Max Baucus are proposing a one year extension of the homebuyer tax credit, to begin phasing down from the $8,000 in the stimulus package in April, 2010. Real estate and housing construction interests oppose this version of the measure, citing April through June as the best home sales months of the year. Senator Johnny Isakson of Georgia proposes a seven month extension of the full $8,000 credit to carry through the summer selling season.

National Association of Realtors President Charles McMillan says the summer months are needed to bring down housing inventories to a normal six month level. “We can achieve a consistent six month supply if the $8,000 tax credit is extended without phase outs through mid 2010. Consumers, particularly first time buyers, need certainty about the amount of the credit so that they can plan their transaction without any worry that a timing problem would penalize them,” he said in a letter to Majority Leader Reid.

The Reid/Baucus proposed amendments also include extending the tax loss carry back from two to four years, but using it only in 2008 or 2009 tax years, with a 20% reduction in the credit. Senator Jim Bunning of Kentucky wants a five year carry back, for both 2008 and 2009 losses, with no reduction, but that would involve a costly $16.3 billion revenue loss. The proposed offset to the cost of extending the tax loss carry back is a $17.1 billion revenue raiser involving a requirement that corporations report transactions with each other on 1099 forms to the government.

Finally, funding of the unemployment benefit extension is also controversial. Reid and Baucus want to extend the federal unemployment payroll tax to cover the $2.4 billion cost, while business groups and Republicans oppose extending the payroll tax, and seek instead to fund the extended benefits from unspent stimulus cash.

Stimulus Impact Expected To Begin Tapering Off Now

White House Council of Economic Advisers Chair Christina Romer says the impact of the stimulus package Congress passed early this year has already reached its peak impact, and will now begin to taper off. The stimulus won’t contribute any significant economic expansion in 2010, Romer says. She testified to the Joint Economic Committee that she expects unemployment to remain above 9.5% nationally through the end of 2010, peaking at 10.1% during the second quarter of next year. She acknowledged considerable uncertainty in her estimates, pointing out that the economy needs to add nearly 100,000 jobs a month just to keep up with population growth, before any recovery of the 7.2 million jobs lost since the beginning of the recession can be expected.

Political Rancor Holds Up Government Appropriations

Unable to come to any agreement on funding levels for most major federal government departments in the Senate, Congress is preparing to pass another continuing resolution to keep federal government’s doors open through December 15, 2009. The current continuing resolution expires October 31. The resolution will probably be attached to one of the appropriations bills expected to come out of conference committees this week for floor votes in both houses. The most likely vehicle for the continuing resolution appears to be the conference report on the Interior and Environment Department appropriations for FY 2010.

Highway Trust Fund Extension Battle Narrows

Last time Congress paid any attention to the need for a long term federal funding mechanism for highway, waterway and transit construction, the battle was between House leaders who wanted a long term bill by the end of this year, and Senate leaders, who wanted an 18 month extension to try and figure out how to make up for declining motor fuel tax revenues as vehicles get better mileage while folks drive less. The Senate desired extension through March 2011 would have pushed any tax increase needed beyond the next election cycle.

The battle is still going on, but Senate leaders have backed down to asking for a temporary funding extension at past levels through the next six months, and House Transportation and Infrastructure Chairman James Oberstar seeking a three month extension, so a six year permanent funding bill can be completed before year end. Either way Congress will have to face the revenue issue before the next elections. Oberstar has a draft bill appropriating $500 billion over the next six years, but House Ways and Means as yet has not begun to explore ways to raise that much revenue. Motor fuel taxes won’t do it at present rates of taxation and fuel consumption. Motor fuel tax increases, a new tax on miles driven, with some method of tracking personal and commercial vehicle mileage, and other alternatives have been raised, but none has been explored in detail.

Climate Change Initiatives Still Face Major Hurdles

In a speech at MIT Friday, President Obama praised the efforts of Congressional leaders to move forward climate change legislation, ahead of hearings this week in the Senate Environment and Public Works Committee on the Kerry/Boxer cap and trade bill. Environment and Public Works Chair Barbara Boxer will preside Tuesday, Wednesday and Thursday over hearings which will include 54 witnesses from various federal agencies to be involved in administering the proposed legislation, business and industry leaders who will be affected by the measure, and analysts involved in predicting its costs to various sectors of the American economy.

Boxer hopes to mark up the bill in her Committee the first week in November, but Environment and Public Works ranking member James Inhofe is threatening to withhold the required quorum for a markup unless the complete text of the bill is released, together with details of the USEPA cost analysis of the proposal. Other government climate change initiatives also face strong opposition.

Wisconsin Congressman David Obey is heading up a contingent of Great Lakes Democrats seeking to block a new USEPA rule on ship diesel fuel sulfur content, The EPA proposal would prohibit ships operating within 200 miles of US coastlines from burning high sulfur diesel fuel. The effect of the 200 mile limit would mean all lakers would be required to burn only low sulfur diesel, significantly increasing shipping costs over competing rail and highway transportation of cargo. James Weakley, president of the Lake Carriers Association, estimated that compliance would cost $210 million annually in increased fuel costs, bankrupting 24% of the lake carrier fleet. On the opposite hand, EPA estimates the rule will prevent at least 13,000 air pollution related deaths by 2020.

Paper mill “black liquor” burned as alternative fuel at the mills, produces tax credits of $2.5 billion annually for the paper industry. An IRS memo made public last week appeared to qualify black liquor for a $1.01/gallon tax credit as a cellulosic biofuel, which would magnify tax credits for paper mills by a factor of ten. However, before that can happen, USEPA will need to approve black liquor under the Clean Ari Act, and the agency has no procedure for registering non-transportation fuels. Current technology makes it impossible to use black liquor as a motor fuel.

President Obama wants to end the existing tax credit for black liquor, and Senate Finance Chairman Max Baucus and ranking member Charles Grassley have drafted legislation to do just that.

Some Senate leaders are pressing the committees with jurisdiction over climate change legislation to report out their bills by Thanksgiving, so the bills can be combined and brought to the Senate floor before the end of this year. After that, a conference committee would have to merge any Senate bill with the measure already passed by the House, and bring it up for final votes in both chambers.

Health Care Debate Likely To Extend Into Next Year

Unresolved issues in the merger of five committee measures on health care reform include Medicare reimbursement rates as a basis of payment to doctors and hospitals under any public option, regional disparities in payments to rural hospitals, coverage for medical devices, and the always thorny issue of federal funding for abortion services. Versions of the bill presently under consideration in Congress attempt to be “abortion neutral,” requiring availability of insurance plans covering abortions as well as plans which do not. The issue of how to account for premium payments from individuals required to buy private insurance, but subsidized by government tax credits towards their premium payments, is more complex. Can that person use federal subsidies to pay part of the premium for a policy covering abortion services? If not, how is that restriction not a denial of the individual’s right to get an abortion?

Congressman Bart Stupak of Michigan leads a group of about 40 legislators who say they won’t permit health care reform legislation to come to the floor unless a vote is allowed on an amendment specifically prohibiting federal funding for abortion. No one has as yet offered language parsing the accounting complexities enforcement of such a ban in the context of mandatory individual health insurance coverage subsidized in part by taxpayer money.

A floor vote in the House on health care reform is expected the week of November 6, with leaders advising Congressmen to expect to stay in Washington Saturday November 7 and the following Monday and Tuesday as well. The Senate vote will likely come later. According to House Republican Study Committee Chairman Tom Price, conference committee work merging the measures from the two chambers will likely “bleed into January or February.”

Friday, October 23, 2009

Urban Democrats Press For Additional $4 Billion For High Speed Rail Construction

While the Obama administration is seeking only $1 billion for high speed rail construction in the 2010 Transportation/HUD appropriations bill, urban region Democrats in Congress want to bump that number up to as much as an additional $4 billion, on top of the $8 billion already included in the American Recovery and Reinvestment Act.

States wanting to create high speed, intercity rail corridors have already submitted applications for $50 billion in funding against the $8 billion the stimulus package makes available, and leaders in both houses believe high speed rail construction is one way to create new jobs with good pay. Also, many believe the level of 2010 funding for high speed rail development will indicate whether the stimulus funds for that purpose are merely an aberration, or a real government commitment to improving intercity rail transportation infrastructure across the nation. Senator Charles Schumer of New York says expansion of high speed rail networks will help "the country mitigate some of the environmental, energy and congestion issues that plague our roads and airspace."

No New Stimulus, But Some Job Creation Measures, Pelosi Says

House Speaker Nancy Pelosi says her chamber will not consider another major stimulus package this session, but that Congressmen are preparing some individual measures designed to promote increased employment in the coming months. Bills under consideration, according to Congressional leaders, include the stalled expansion of unemployment benefits, increasing the tax loss carry back time period for businesses, extending and expanding the home buyer tax credit, a business tax credit for new hires, increased transportation construction appropriations, and extensions of food stamp and COBRA health insurance benefits for the jobless.

President Obama is proposing an increase in SBA lending limits from $2 million to $5 million to stimulate hiring by small businesses. He plans to lower the interest rate smaller community based banks pay to borrow from the Treasury Department for loans to smaller businesses in SBA programs.

Tuesday, October 20, 2009

Housing And Real Estate Groups Press Home Buyer Tax Credit Extension

The Mortgage Bankers Association, National Association of Realtors and National Association of Home Builders sent a letter to Treasury Secretary Timothy Geithner, Housing and Urban Development Secretary Shaun Donovan, and National Economic Council Chairman Lawrence Summers, urging a one year extension of the $8,000 home buyer tax credit, as well as expansion of its applicability to all purchasers, not just first time buyers, an increase in the amount of the credit, and making the money available to cover closing costs.

Senate Banking Chairman Christopher Dodd and Georgia Senator Johnny Isakson are proposing legislation to extend the $8,000 credit for an additional seven months, removing the first time buyer limitation, and doubling the income threshold to $150,000 per person and $300,000 per family. Their proposal would cost an estimated $16.7 billion.

Chicago Based Walsh Construction Participates In $1.3 Billion LAX International Terminal Expansion

Family owned Chicago contractor Walsh Construction, in a joint venture with Austin AECOM, has been awarded $1.3 billion in contracts for expansion and renovation of passenger terminals at Los Angeles International Airport. The bond financed project is not part of the federal stimulus appropriations. This work represents the first significant improvement to the LAX international terminal since the City of Angels hosted the 1984 Summer Olympics. It will add over a million square feet of space to the terminal, with two new concourses and nine new gates.

Energy Projects Moving Forward With Or Without Congressional Climate Change Action

While the politicians in Washington grind their teeth over the details of thousand page legislative proposals on energy policy, some energy projects continue to move forward without awaiting Congressional action. The federal Minerals Management Service has approved plans by Shell Offshore, Inc. for exploratory drilling in the Beaufort Sea off Alaska's North Slope, where producers expect to find 8.2 billion barrels of oil reserves and 27.6 million cubic feet of natural gas reserves.

On the other end of the renewability spectrum, Siemens Energy of Germany has been awarded six wind turbine generator orders for installation across the North American continent, aggregating $900 million. The 242 turbines in the combined six orders will have a power generating capacity of over 565 megawatts.

Can The Government Regulate Cap And Trade When It Can't Handle Energy Star?

While in the business of handing out $300 million in stimulus rebates to consumers who purchase Energy Star rated appliances, the US Department of Energy acknowledges in an internal audit that that it does not properly track whether products labeled with the Energy Star actually meet the required specifications for energy efficiency. Windows, and certain lighting products carrying the Energy Star label have to be tested by independent labs, but manufacturers can self-certify refrigerators, washing machines, dishwashers, water heaters and room air conditioners, and certain manufacturers, as well as Consumer Reports, note that tests have shown certain Energy Star labeled appliances do not live up to federal requirements.

The internal audit noted that promised retail assessments of Energy Star labeled products have often not materialized, and that when the Department of Energy does find non-conforming products in stores, it is not following through to see that the Energy Star labels are removed from the non-conforming goods.

Friday, October 16, 2009

Despite Obama's Restrictions, Lobbyists Still Have Plenty Of Access

When the economic stimulus legislation passed, President Obama made a big show of restricting the federal officials charged with distributing the $787 billion from accepting meetings, e-mails, documents or phone calls from lobbyists from businesses seeking to share in the grants and contracts stemming from the huge appropriations. So, the front door of the administration was shut tight on K Street. However, as many industry groups have managed to discover, there's a wide open back door, and they are making good use of it.

Every rule coming out of the federal bureaucracy has to be vetted by the Office of Management and Budget for a review of its impact not only on government budgets but also on the parties to be regulated by the rule. The OMB office charged with this task is called the Office of Information and Regulatory Affairs, or OIRA. OIRA keeps meticulous records of who sits in on meetings to review each proposed rule. Regulations require OIRA to meet with anyone who asks, from a business or organization likely to be regulated under a proposed rule.

One of the rules drawing a lot of back door lobbying was the stimulus legislation's mandate that domestic industries be favored in government construction contracts funded with stimulus cash, called the "Buy American" provision. In March and April OIRA hoisted three meetings with more than 20 people to discuss the Defense Acquisitions Regulations Council proposed buy American rule, including six lobbyists from the United Steelworkers Union, the United Autoworkers Union, and the American Steel and Iron Institute. The Japanese Embassy (Japan makes steel, too) also attended one of these meetings. So much for closing the door on lobbyists.

A second proposed rule, on the renewable fuel standard provisions on calculating greenhouse gas emissions from ethanol production, attracted more than 40 people to four meetings in March, including lobbyists representing Shell Oil, the American Petroleum Institute, the Environmental Defense Fund and the Union of Concerned Scientists. The biggest lobbyist draw of all so far was the EPA proposed rule on industry reporting of greenhouse gas emissions, which attracted over 50 folks to six meetings last month, including lobbyists for Chevron, BP America, Exxon, Mobil, Shell, the American Petroleum Institute, and the American Paper and Forest Association. Seems like government always has a back door.

Transparency Can Hoist Obama On His Own Petard

Republican politicians all across the country today are preparing to skewer the Obama administration with its own partial data on economic stimulus activity released yesterday on the website. The reports thus far show only 30,083 jobs created by stimulus appropriations spent to date. Obama's allies argue that the reported data represents only 5% of stimulus spending to date, and that if the other 95% of the spending is creating or saving jobs at the same rate, the stimulus actually produced 600,000 jobs directly. They further argue that these 600,000 jobs would have meant an indirect creation of a similar number, for a total job creation of about 1.2 million due to the stimulus appropriations.

Vice President Biden's Chief Economist Jared Bernstein says, "All signs - from private estimates to this fragmentary data - point to the conclusion that the Recovery Act did indeed create or save about 1 million jobs in its first seven months." Republicans point instead to Obama's failed promise that the appropriations would hold unemployment under 8%. Ken Spain, spokesman for the National Republican Congressional Committee, put his response this way, "After wasting taxpayer dollars to produce an unimpressive 397 jobs in Michigan, middle class families are still asking one thing: Where are the jobs?"

Republican Leadership Seeks To Tap Stimulus Cash For Social Security Payment

Continuing to argue that the American Recovery and Reinvestment Act is not working, Senate Minority Leader Mitch McConnell and House Minority Leader John Boehner both said yesterday that the Obama administration's proposed one time $250 check to each Social Security recipient should be paid for with unspent cash from the stimulus appropriations. Neither leader went so far as saying he would oppose the measure if it is not paid for. The Obama proposal would cost about $14.25 billion, to fund a single check to each of about 57 million Social Security recipients.

House Speaker Nancy Pelosi views the proposal as an extension of the economic stimulus package, noting that the original legislation provided a similar $250 check to each Social Security beneficiary. Boehner said, "I'd be happy to support the president's proposal; if we pay for it out of stimulus funds that have not been spent. The stimulus bill is not working."

International Coal To Expand Williamsville Underground Mine

International Coal Group, Inc. is beginning work on a $20 million expansion of its Viper underground coal mining operation near Williamsville, Illinois. The Viper mine is a room and pillar underground mine bringing up coal from the Springfield Seam, also known as the Illinois Number 5 Seam. Viper sells 58% of its output to electric utilities, and processes the raw coal at its preparation plant on the mine site.

Thursday, October 15, 2009

Economic Factors Could Stymie Climate Change Accord

CBO Director Douglas Elmendorf testified yesterday to the Senate Energy and Natural Resources Committee that overall employment may not be significantly impacted by cap and trade legislation, but that particular industries heavily reliant on production or consumption of fossil fuels will be hard hit as employment shifts away from them toward renewable energy sectors of the economy. "The shifts will be significant," Elmendorf said, and added that addressing climate change will require "some cost to the economy."

At the same hearing, Senator Sam Brownback of Kansas said Kansas City utilities predict a 44% increase in energy prices under the Kerry/Boxer proposal, while Senator Mary Landrieu of Louisiana said oil refinery operating cost increases under the measure could force Louisiana refineries out of business, resulting in more foreign gasoline imports. Adding to the confusion, Larry Parker of the Congressional Research Service, when asked by the committee to review various cost estimates released by federal agencies and private interests, testified that "long term cost projections are at best speculative, and should be viewed with attentive skepticism."

The same sort of troubling economic uncertainties plague the run up to the UN Copenhagen conference on climate change. The range of economist predictions regarding the world wide cost of greenhouse gas emission reduction runs from a low of $100 billion per year by 2020 to a high of $1 trillion per year. Luiz Alberto Figueiredo Machado, the lead climate negotiator for Brazil, sums up the global situation succinctly: "The level of ambition in funding is not matching up to the sense of urgency everyone now has. ... Developing countries are not convinced that the market will find them the $100 billion they need. They want guarantees."

At the same time, pledges from the governments of industrialized nations to the UN Adaptation Fund for fighting climate change have almost completely failed to materialize. And, some planned clean energy projects already on the drawing boards are being scuttled because lack of growing demand for power has scotched their project financing. Dong Energy of Denmark is pulling investment out of two planned clean coal power plants, in Scotland and Germany, though it remains involved as a design consultant on the Scotland project. E.On AG of Germany has shelved plans to build a controversial Kingsnorth clean coal power facility in southeast England.

However, one California company, eSolar Incorporated of Pasadena, has partnered with Clean Energy Solutions of South Africa to distribute eSolar's power technology in a seven nation swath across sub-Saharan Africa. Earlier this year eSolar licensed its solar thermal power plant technology to Acme Group for development of power facilities in India over the next decade.

Bipartisan Home Ownership Assistance Proposal

Republican Senator Johnny Isakson of Georgia and Democratic Senator Chris Dodd of Connecticut are introducing a $16.7 billion proposal to extend the $8,000 first time home buyer tax credit through June 30, 2010, and making it available to single filers earning up to $150,000.00 and joint filers making up to $300,000.00. The Senators expect to offer their proposal as amendment to legislation scheduled for floor action this week.

Republican Leadership Slams Job Creation Tax Credit

Without waiting for the Obama administration to even propose new legislation creating tax credits for businesses which hire new workers, House Minority Whip Eric Cantor yesterday said credit access was more important to business growth than tax credits for new hiring. "We need to do something to look at how small businesses can access credit, how can they regain their certainty to go ahead and invest capital," Cantor pronounced. "I think that many have demonstrated this type of tax provision is fraught with peril and potential for abuse - and frankly not able to deliver the real results that we want."

House Subcommittee Passes $315 Million Drinking Water Safety Bill

Wednesday the Energy and Environment Subcommittee of the House Energy and Commerce Committee passed by voice vote HR 3258, which would require USEPA to establish drinking water system standards for security against terror attacks. Rules promulgated under the bill would apply to all drinking water systems serving more than 3,300 people. The measure appropriates $315 million in 2011 to finance drinking water system upgrades away from use of high risk volatile purification chemicals.

Subcommittee Chairman Edward Markey noted that the legislation has the backing of the Association of Metropolitan Water Agencies. Republican members of the panel criticized the bill as "an environmental notion masquerading as national security." The measure requires drinking water systems to adopt what the USEPA will define as "inherently safer technology" for water purification.

Wednesday, October 14, 2009

Eight Senators To Watch On Healthcare Reform

Tired of trying to figure out what 100 Senators are going to do about the 5,000 pages of proposed health care legislation floating around the conference rooms of the Capitol? The bill will need 60 votes to pass the Senate, but there are eight key Senators to watch. You can call them the Wind Sock group, because their reaction to the way the five different committee proposals are eventually merged into a final bill will tell everyone which way the wind is blowing in Washington.

The key to the votes of this group of 8 is the so called "public option." Three members of the Wind Sock group are in the "must not have" position, three are in the "must have" position, and the other two have already compromised on the possibility of a public option in the future initiated by a "trigger" proving unavailability of affordable health insurance from private insurers in certain regions of the country. A change in the position of any one or more of these Senators could well be predictive of the direction the final legislation is taking as it is sculpted behind the closed doors of Capitol conference rooms and offices.

The "must not have a public option" group: Republican Susan Collins of Maine, Democrat Blanche Lincoln of Arkansas, and Democrat Mary Landrieu of Louisiana. The "must have a public option" group: Democrat Roland Burris of Illinois, Democrat John Rockefeller of West Virginia, and Independent Bernie Sanders of Vermont. Finally, the "trigger" advocates are Republican Olympia Snowe of Maine and Democrat Ben Nelson of Nebraska. Stay tuned.

The "Real" Health Care Reform Bill Is Being Sculpted In Secret

Despite being the only Republican vote in favor of the Max Baucus Senate Finance Committee health care reform proposal yesterday, Senator Olympia Snowe of Maine is likely to be excluded from the meetings of Democratic congressional leaders as they take the five lumps of pla-dough they have been handed by three House and two Senate committees, and attempt through Congress' byzantine legislative processes to sculpt them into a final piece of legislation which can garner the required number of votes in House and Senate roll calls before delivery to the Oval Office for President Obama's signature.

Why exclude her? Well, the Democrats don't want their secret deliberations disclosed to Republican talk show hosts, the press, and opposing Republican leaders in either chamber until their undoubtedly contentious negotiations are completed, and they come up with a single version of the legislation which they think can pass both the House and the Senate. After all, the real policy disputes over the details of this new law divide the Democrats from each other far more than they divide the Republicans from the Democrats.

Going forward, the process will probably look like this: Senate Majority Leader Harry Reid has only two versions of the legislation to merge, and says he expects to bring something to the Senate floor the week after next. House leaders will wait to see what the Senate passes before completing merger of their three bills, since they don't want to pass a House bill which would only die aborning in the Senate. Once the House sees what the Senate has passed, leaders there can bring either the Senate version, or a similar version highlighting only those policy differences they think they can push through the conference committee, to the House floor. Until a conference committee report emerges on this one, most Representatives and Senators, like the ordinary citizens outside the beltway, will have no idea at all what is being voted on.

We do know the final bill will require all citizens to buy health insurance, either through their employers, or individually, or pay a fine in the form of additional taxes. We don't know how big the fine will be. We also don't yet know whether or not the final measure will require employers to provide health insurance to employees, or whether it will include a government run health insurance company to compete with private insurers for premium dollars from those uninsured who will be forced to have coverage under the new law.

Most significantly, we don't know how Congress will ultimately raise the cash to pay for all this. The Senate version imposes a 40% tax on health plans costing over $8,000/year for individuals or $21,000/year for families, while the House increases income tax rates for those individuals earning over $500,000/year or families earning over $1 million/year.

Health insurers and labor unions have already come out strongly against the Senate Finance Committee bill. Unions, which often have negotiated hefty health plan benefits for their members, strongly oppose the "Cadillac health plan tax" in the Baucus measure, as do business groups, which don't want to lose generous benefit packages as a way to attract the most talented work force. Health insurance companies say the Finance Committee bill penalties are too low to force the healthiest young folks to buy health insurance, and that premiums will skyrocket because only the sick uninsured will become new health insurance customers.

The saddest fact of all is that there is still no commitment from either House or Senate leadership to give Senators and Congressmen, much less average citizens, sufficient time to read over the final legislation before either chamber votes on it.

Boxer Schedules Climate Change Hearings

Senate Environment and Public Works Chair Barbara Boxer has scheduled three days of hearings the last week of October on the Kerry/Boxer version of cap and trade legislation, despite the fact that USEPA has not yet finished its cost analysis of the proposed legislation, and CBO will not score the proposal until after her committee marks up the legislation. Witnesses scheduled at the October 27 hearing include Energy Secretary Steven Chu, Interior Secretary Ken Salazar, Transportation Secretary Ray LaHood, EPA Administrator Lisa Jackson, and FERC Chairman Jon Wellinghoff. Witnesses for the following two days have not yet been announced.

USEAP is analyzing the proposed bill without knowing the details it will include regarding nuclear power production, and without details of a final allocation formula for emission credits. Coal state senators Thomas Carper, Robert Byrd, Arlen Specter, Max Baucus and Mark Werner have expressed satisfaction with the draft bill's treatment of the coal industry, including incentives for construction of a new generation of carbon capturing coal fired power plants.

Immigration Reform On The House Agenda

Illinois Congressman Luis Gutierrez held a rally yesterday on the Capitol's West Lawn where he outlined his proposals for immigration reform legislation he proposes to introduce "probably sometime right after Thanksgiving." Representative Jan Schakowsky said she expects the Gutierrez bill will include both a pathway to citizenship for workers already here illegally, along with tougher enforcement measures and border security controls. Gutierrez said he expects his bill will require illegal immigrants applying for citizenship to submit to criminal background checks and also to take English proficiency classes. He said he believes his bill is needed to keep families together.

House Judiciary Committee ranking member Lamar Smith immediately spoke out in opposition to the Gutierrez outline. "Allowing millions of illegal immigrants to stay and take jobs away from citizens is like giving a burglar a key to the house," he said.

Tuesday, October 13, 2009

New Mexico Clean Power Hub Adopting Superconductor Pipelines

New Mexico governor Bill Richardson is announcing today that the Tres Amigas SuperStation hub, the first connection among all three United States major power grids, will use superconduction technology to transfer and balance the transfer of gigawatts of electric power from one region of the nation to the other two. The United States electric power transmission infrastructure is divided into three main grids, or interconnections: the Eastern, Western and Texas Interconnections. There are a few locations where two of the three can share power across their geographical boundaries, but there is nowhere yet that a sharing arrangement among all three exists.

That is about to change. Tres Amigas SuperStation, to be built on 22.5 square miles of land near Clovis, New Mexico, is one place having easy access to power from all three interconnections. The project is designed to use a triangular arrangement of underground direct current superconducting electric power "pipelines" to enable all three regional grids to share and balance power transmission. Such an interchange is required to make it possible for clean hydroelectric, wind, and solar power generated in less populated areas of our country to be efficiently sold in more populated locations. The successful implementation of any of the cap and trade proposals now pending in Congress will require the existence of the Tres Amigas Superstation, or something like it.

Tres Amigas has already received the right to lease the 22.5 square miles from the New Mexico State Land Office, and is in the process of filing for FERC permission to operate as a merchant transfer entity, allowing Tres Amigas to charge a fee for power transfers across its hub.

Parking And Transit Link Up

Green roofed parking garages with energy conserving lighting circuitry are the wave of the future, according to attendees at the Parking Show of Shows in National Harbor, Maryland this week. Martin Stein, president of the National Parking Association, explains the connection between parking availability and mass transit ridership: "Without abundant parking near transit stations in suburban areas, people won't bother to hop on subways and trains. The perception of convenience is very important."

According to Gloria Ohland of Reconnecting America, "There is this whole dynamic and irony at play here. Unless there are parking spaces, you're not going to get people to use transit." Dave Rich, a parking consultant at Rich & Associates, says the marriage of parking and transit is a growing segment of his business. "Forty percent of the projects we're doing right now involve planning and conceptual design of parking in transit oriented environments." So, all you green advocates out there, remember, if you want people to get out of their cars, you need to give them someplace to park.

Corn: Feed, Food, Booze Or Fuel?

Widening splits among the three major lobbying groups in the ethanol industry seem to be torpedoing a unified front regarding the treatment of ethanol as a fuel in pending climate change legislation in Congress. Growth energy, an ethanol lobby formed last year by ethanol plant builder Jeff Broin and retired General Wesley Clark, believes the National Corn Growers Association and Renewable Fuels, the third big ethanol lobby, are soft on ethanol fuel development because RFA is dominated by Archer Daniels Midland, a major livestock feed processor.

Tom Buis, Washington, D.C. lobbyist for Growth Energy, says flatly: "When we have excess grain, like we do, and idled corn ethanol plants, like we do, and we have an increasingly expensive reliance on foreign oil, there's an easy solution to all of this - ethanol." Growth Energy is known for advertising countering the argument that using corn based ethanol for motor fuel increases food prices, and for lobbying hard against USEPA's plans to consider jungle deforestation in evaluating the impact ethanol as fuel has on climate change in awarding carbon emission reduction credits under proposed cap and trade legislation.

Healthcare Reform Battle Lines Are Drawn

This afternoon the Senate Finance Committee reported out its version of a health care reform measure, on a vote of 14 - 9, with Maine's Olympia Snowe the only Republican senator voting in favor of the bill. Snowe said her vote was only for the bill as it now stands, and she reserved judgment on her floor vote until she sees what emerges from the close door leadership conference to merge the Finance Committee proposal with Ted Kennedy's earlier HELP version of the legislation.

The next step is for Senate and House leaders to merge the bills the five committees have reported out, and bring the legislation to the floor of each chamber for a vote. But, the policy differences within the Democratic Party won't be ironed out in either house of Congress - that final pressing will have to await conference committee work, since it seems clear the House and Senate will not pass identical versions of health care reform bills. The Senate bill may not pass that chamber if it includes the so called "public option," while House leaders insist they cannot pass a bill with out a public option.

Furthermore, the two chambers can't agree on how to pay for the trillion dollar cost of the legislation over the next decade. The House version will rely on a "millionaire tax" imposed on individuals earning more than $500,000 per year, or families earning over $1 million a year. The Senate bill imposes a 40% tax on health insurance plans costing over $8,000 per year for individual or $21,000.00 per family, known as the "Cadillac plan" tax. House Majority Whip James E. Clyburn of South Carolina says the "Cadillac plan" tax will never pass the House. "I think taxing benefits is a tough thing to do. On the House side we're coming up with a much better "pay for" than taxing benefits.

Another hurdle for any final reform legislation is yesterday's insurance industry analysis predicting that the Senate Finance Committee's action in cutting back penalties for families who choose not to buy health insurance will drive up premiums for those who are covered to as much as $26,000.00 per family by 2020.

So here's the scoop - the average citizen still has no idea what this legislation will look like, if it passes at all - and neither do the Senators and Congressmen who will have to vote on it. Senator Snowe acknowledged as much: "My vote today is my vote today. It doesn't forecast my vote tomorrow," she said. It will be a major stroke of luck if the conference committee version of this legislation is available to Senators and Congressmen in time for them to read it carefully before they vote on it, much less available to the general public for perusal and feedback to our elected representatives before the final roll calls.