Thune Wins Key Cap and Trade Vote

The war of words continued yesterday in the battle of the budget on Capitol Hill.  Sending a very interesting message to their Democrat counterparts in the House, the Senate yesterday voted to pass — by a whopping 89-8 margin — an amendment by Sen. John Thune (R-S.D.) that would prohibit the collection of funds from any future cap and trade proposal if that proposal would increase electricity rates and gasoline prices for American households and businesses.

The Massachusetts Institute of Technology in 2007 released the results of their study of a proposal similar to President Obama’s cap and trade framework.  MIT’s study concluded that under the “cap and trade” scheme, every American family would face additional energy costs of up to $3,128 by 2015.

Upon the amendment’s passage, Thune said, “The Senate acted in the best interest of every American who uses electricity, gas, and diesel fuel. The increased utility and fuel costs that would result from cap and trade legislation, as proposed by President Obama, would equate to a national sales tax on energy that would affect every family in America. In a time when many families are making sacrifices to make ends meet, Congress and the Administration should not be leveling a new tax on energy, especially one that hits middle and lower income families especially hard.”

Democrats in the House and Senate have expressed an interest in using the budget reconciliation process to fast track a cap and trade plan. The budget proposal currently before the House contains budget reconciliation language which effectively opens the door for a cap and trade proposal being included as part of any final budget that is put together — despite the fact that the budget currently before the Senate does not include any budget reconciliation language.

Yet in a pen and pad session with reporters, House Majority Leader Steny Hoyer (D-Md.) yesterday backed away from even acknowledging that cap and trade could in any way be part of a reconciliation maneuver.

“The Budget Committee does not provide for reconciliation authority as is related to cap and trade or energy,” Hoyer said.  “There is reference to reconciliation possibly being used for health care.  Reconciliation is a fallback position certainly on health care, and we don’t specifically provide for it for cap and trade. We want to cross that bridge when we need to cross it.  

Hoyer added, “We are hopeful that we’ll be able to work in a bipartisan way to achieve both the energy independence that we want to achieve, the environmental steps that we want to take as it relates to the production of energy, which cap and trade deals with, as well as an affordable, accessible, universal health care system. Both of those objectives we think are achievable. We think both of them can be achieved this year, and we are going to pursue both of them.  But I don’t want to anticipate a fight with the Senate or Republicans on this because we are hoping to work together with them on both.”

I asked Hoyer about the $1 billion reconciliation directive to the Energy and Commerce Committee included in the budget that would allow for cap and trade.  Hoyer said, “There is a reserve fund.”  

When I asked what the difference was, Hoyer responded, “The committee ‐‐ and we’ve done this in the past, provided various reserve funds. Obviously, those reserve funds have to be created by some actions of the committee at some point in time, pursuant to the budget provisions. But there is not a specific source that is identified for those reserve funds.  And as I told you last week, not by mistake, but by design, this budget is generic in the sense that what it tries to provide for is the accomplishment of objectives without deciding how you’re going to do that. That will be part of the legislative process, and obviously, members have different views on that.”

But what does all that legislative gobbledegook mean?

While walking across the street pondering this exchange with the majority leader yesterday, I happened to run into Rep. Paul Ryan (R-Wis.), the ranking member on the House Budget Committee as well as the architect of the Republican budget alternative being released today.  I asked him about any specific authorization of reconciliation for cap and trade in the House budget resolution.   

“The fact that you have a cent’s worth of reconciliation instructions to Energy and Commerce means Energy and Commerce can do whatever it wants to do in its committee’s jurisdiction,” Ryan said.  “What is the jurisdiction of Energy and Commerce?  Healthcare and cap and trade.  It does not shut down the reconciliation option for cap and trade, it preserves the option.  They’re just saying we mean to do healthcare but it doesn’t stop them from doing reconciliation on cap and trade.”