But at least one lawmaker has no such worries. Not only will the $2 billion be replaced, Sen. Judd Gregg (R-N.H.) said on the chamber floor this afternoon, but it’ll be borrowed, adding further to the nation’s enormous debt.

“This is the ultimate bait and switch,” Gregg said.

Democratic leaders, from President Obama on down, have repeatedly said that the $2 billion cash for clunkers extension is paid for because it dips into unused stimulus funds earmarked for the loan guarantee program. But if that loan funding is replenished sometime later — and if the replenished funds aren’t covered by increasing revenues or enacting cuts elsewhere — then the clunkers extension will effectively have come from borrowed funds.

“The bill to pay [for] those cars is going to come due on our children and grandchildren,” Gregg said. “This is nothing more than a program which is being funded entirely by debt.”

Indeed, on the House floor last Friday, Sen. Edward Markey (D-Mass.) wanted assurance that, if the cash for clunkers extension passed, the $2 billion siphoned from the loan guarantee program would be replaced.

Rep. David Obey (D-Wis.), chairman of the House Appropriations Committee, responded:

I share the gentleman’s view that the Renewable Energy Loan Guarantee Program is of vital importance to creating a new, green economy. We have talked with the White House. We have talked with the Speaker, and I want to assure you that all of us certainly have every intention of restoring these funds.

Of course there’s always the possibility that Obey could reneg on that promise, but Gregg thinks it’s unlikely. “This is the chairman of the Appropriations Committee,” Gregg said. “When he assures you, you can be assured it’s for sure.”

Observers of this debate might recall that Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.), both ardent environmentalists, have already diluted their bill considerably in order to win the support of House Democrats from states with powerful gas, coal and auto industries. In the latest episode, it was the Democrats representing the farm states who threw the fuss, threatening to kill the bill if two key provisions weren’t changed.

The first involved a program allowing polluting farmers and agricultural companies to offset their emissions by planting trees or investing in green technologies. The Waxman-Markey bill proposed that the Environmental Protection Agency would oversee the program, arguing that the agency would be the most reliable monitor of an initiative designed to protect the environment.

But farm-state Democrats, rallying behind Rep. Collin Peterson (D-Minn.), who chairs the House Agriculture Committee, insisted that the U.S. Department of Agriculture be given that responsibility — a scenario opposed by environmentalists, who fear the USDA will prioritize farm industry concerns above the effectiveness of the offset program.

Indeed, The New York Times reports today of USDA’s shoddy record when it comes to overseeing environmental programs under its jurisdiction.

In particular, the department’s conservation agency “routinely ignored” compliance standards when giving out wetlands and wildlife grants, an investigator for the House Agriculture Committee found. The Government Accountability Office said there is potential for duplicative payments with the conservation programs, allowing the agency to release billions of dollars in payments to landowners who do not deserve them.

Another assessment from the USDA inspector general found shoddy accounting at the Natural Resources Conservation Service. The agency was unable to provide sufficient information on transactions and account balances.

No matter. The result of the Waxman-Peterson negotiations was to give USDA the job.

The second sticking point revolved around a controversial EPA initiative — mandated by Congress — designed to ensure that the country’s shift to biofuels like ethanol doesn’t lead to a spike in greenhouse gas emissions elsewhere around the globe. This happened in Indonesia, for example, where there was a widespread clearing of rain forest a few years ago to make way for palm plantations to feed Europe’s emerging biofuels market. The EPA proposed to take such global events into account as it pertains to the U.S. shift to food-based fuels.

No matter. For Peterson and the other agriculture-friendly Democrats, the so-called indirect land-use plan was a non-starter. The result? Under the compromise, EPA won’t be allowed to account for indirect land-use when calculating ethanol-production emissions until the USDA has signed off of the methodology.

“We have reached an agreement that works for agriculture and contributes to the reduction of greenhouse gas emissions in the United States,” Peterson said in a statement last night.

The House is planning to vote on the Waxman-Markey bill Friday.

–

You can follow TWI on Twitter and Facebook.

As the House works toward a deal setting new limits on carbon emissions, nuclear power is getting a boost from a core group of Democrats – the same lawmakers who have received the bulk of the industry’s campaign donations in recent years.

That electric utilities pushing for nuclear expansion are relying on their longtime congressional champions is not surprising. But the dovetailing of re-election dollars with support for nuclear power masks a more complicated political reality for moderate Democrats, many of whom are shrugging off opposition from environmental groups to embrace the industry as a source of low-carbon energy and a job creator in their districts.

Image by: Matt Mahurin

House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) and Rep. Ed Markey (D-Mass.), his energy subcommittee chief, are working overtime to reach a deal with centrist colleagues in time to pass their 648-page climate change bill by Memorial Day (1). Adding to that pressure, Roll Call reported this week, are calls from senior Democrats such as Majority Leader Steny Hoyer (D-Md.) and Majority Whip James Clyburn (D-S.C.) to add more benefits for the nuclear industry to the climate measure.

Hoyer and Clyburn ranked No. 3 and No. 5, respectively, among active House members on electric utilities’ list of campaign-money beneficiaries during the 2008 election cycle, according to the Center for Responsive Politics. Since 2003, Hoyer has received $348,800 from the political action committees of electric utilities, compared with $247,500 from investment firms and $133,250 from banks. Clyburn has also received more from electric-utility PACs since 2003 ($183,265) than from banks ($132,800) or investment firms ($102,750).

Another Democrat cited by Roll Call as advocating for more nuclear incentives in the climate bill, House Budget Committee Chairman John Spratt (D-S.C.), has also taken in far more from electric-power PACs than from famously influential banks and investment firms. Electric utilities have contributed $197,900 to Spratt since 2003, while bank PACs have given him just $56,000 and Wall Street PACs $21,000 during that same period.

“The industry can’t build new reactors without unprecedented levels of financial support from the American taxpayer,” Tyson Slocum, the director of Public Citizen’s energy program, said. “When your business model is dependent upon the generosity of the American public in the form of subsidies, they try to accomplish that through giving money to politicians.”

Indeed, the nuclear industry’s biggest players have ramped up their giving to Democrats even further during the first three months of this year. After giving slightly more than half of its donations to Democrats during the 2008 election, the Nuclear Energy Institute PAC sent the majority party more than $56,000 of its $60,000 in first-quarter 2009 campaign donations, according to the Federal Election Commission database.

Duke Energy, which joined NEI as a sponsor of Clyburn’s golf tournament last year, gave $56,000 during the first three months of this year – more than half of what it donated to Democrats during the entire 2008 election season.

“There is no doubt that the tide is moving in favor of nuclear power among Democrats,” Dr. Patrick Moore, the co-founder of Greenpeace turned nuclear advocate at the industry-backed Clean and Safe Energy Coalition, said in an email. Moore said he spoke to the House Nuclear Issues Working Group, which Spratt co-chairs, last week and found a receptive audience.

But not every senior Democrat has benefited from the nuclear industry’s courtship. Waxman has received $27,000 from electric-utility PACs since 2003, with Markey getting a relatively meager $21,000, according to CRP data. House Speaker Nancy Pelosi (D-Calif.), a fundraising powerhouse who has lately softened her criticism of nuclear power, took in only $46,000 from utilities over the past six years.

Are those low fundraising numbers for Waxman, Markey, and Pelosi a smart business decision by nuclear-power companies who want to steer clear of the opposition? Perhaps, Friends of the Earth spokesman Erich Pica said – but it’s also no accident that southeasterners such as Clyburn, Spratt, and Rep. G.K. Butterfield (D-N.C.) form the nuclear industry’s strongest Democratic bloc.

“New nuclear power providers have a foothold in the southeast,” Pica said. “That’s where they’re planning their renaissance. The utilities have captured the public-utility commissions and the state legislatures.”

Both Spratt and Hoyer have large nuclear plants in their districts, with operators looking to build new reactors in the coming years. Nuclear energy generates 20 percent of U.S. electricity but more than 50 percent of South Carolina’s power, as Clyburn often notes in public appearances.

“I have always said that any policy that does not include nuclear in the various mix of energy would be unfair to states like South Carolina – and under some options being discussed, could be punitive,” Clyburn said through a spokeswoman. “I would not support any policy that is punitive to my constituents.”

Hoyer is “working to ensure that the programs currently in place for nuclear development, such as tax credits and loan guarantees, match up with the new energy policy in the bill” to help the industry keep pace with rising demand for lower carbon alternatives, spokeswoman Stephanie Lundberg said.

The environmental community continues to oppose new nuclear plants, pointing to the safety risk from aging, waste-producing facilities such as New York’s Indian Point and the massive cost burden of plant construction. The non-partisan Government Accountability Office (GAO), Congress’ investigative arm, estimated last year that government loan guarantees for the nuclear industry carried a 50 percent risk of default.

“New reactors are not going to be a good deal for the public in terms of cost or energy issues – it seems to me that these officials should understand that,” Michael Marriotte, director of the Nuclear Information and Resource Service and a critic of nuclear expansion, said.

Moreover, Marriotte noted that liberal skepticism about nuclear power can still pack a punch, as it did in 2005 when Sen. John McCain (R-AZ) lost four votes for his climate-change bill after adding new nuclear subsidies. “Most of the people who are pushing to add nuclear power to the Waxman-Markey bill are not going to vote for the final bill anyway,” he added.

The nuclear industry counters with more than just its contributions to campaign coffers. Those asking Congress to fund new clean-energy development banks and loan guarantees point to Gallup’s 2009 environmental poll, which found that more than one-quarter of all Americans strongly favor nuclear – a notable uptick from previous years. Nuclear power was embraced by 71 percent of Republicans and 52 percent of Democrats in the survey, representing an eight-year high in support across party lines.

“Over the last four years, we’ve seen a big change in the way Democratic party members are looking at nuclear,” NEI senior political affairs director Hannah Simone said. “At a time when the economy is weak and jobs are needed, we’re actually an industry that wants to build and expand and grow, as opposed to other industries that don’t have that capability.”

But as the nuclear industry’s Democratic allies seek more concessions in the climate bill, both supporters and foes of new plants are reminding Congress of a simple truth: the very concept of regulating carbon emissions gives nuclear power a competitive advantage.

“The best thing for advocates [of nuclear power] is this carbon pricing,” said Judi Greenwald, vice president for innovative solutions at the Pew Center on Global Climate Change.

The climate bill “is going to add cost to [nuclear’s] competitors,” she added, “so it will function as a subsidy for nukes. I think the nuclear industry should be excited about a cap-and-trade program.”

Elana Schor is a freelance journalist in Washington. She has written for The Guardian, The Hill and Talking Points Memo.

One area of contention is the distribution of carbon allowances, which polluting companies will need to obtain for each ton of carbon dioxide they plan to emit. The Obama administration has called for — and continues to push for — 100 percent of permits to be auctioned off, while some industry leaders and moderate Democrats support giving out some or all allowances for free in order to reduce the economic burden on polluting companies and consumers.

The original Waxman-Markey draft did not specify how the allowances would be distributed, but now Waxman has signaled that he is open to the free allocation of 40 percent of permits to local electricity distribution companies and 15 percent to the industries that would be most vulnerable to international competition under the agreement, according to E&E Daily (via Climate Progress). The free permits would slowly be phased out in favor of a 100% auction within 10 to 15 years.

Another major compromise involves the short-term emissions reduction targets. The Obama administration called for a 14 percent reduction by 2020, while the Waxman-Markey bill stipulated a 20 percent cut. Now Bloomberg reports that Waxman has agreed to a 17 percent target, while E&E Daily says Waxman will settle for 14 percent. The long-term target — an 83 percent reduction by 2050 — will probably remain in place.

While environmentalists will no doubt be disappointed by Waxman’s capitulation — particularly since even the ambitious draft bill was unlikely to reduce emissions as far as some scientists have urged — it was inevitable that some compromise was in order if the legislation was to have any chance of passing. It is still unlikely to win much or any Republican votes, but Waxman may have done enough to address the concerns of moderate Democrats on his committee.

Waxman still hopes to vote the bill out of committee by Memorial Day.

This is the largest assault on democracy and freedom in this country that I’ve ever experienced. I’ve lived through some tough times in Congress: impeachment, two wars, terrorist attacks. I fear this more than all of the above activities that have happened.

You may recall Shimkus from some of his other rational, non-hyperbolic arguments, such as the time he publicly reasoned that high carbon dioxide levels might not be so bad. After all, the dinosaurs didn’t seem to mind.

That’s what happened at a House Energy and Environment Subcommittee hearing this morning on “The Role of Offsets in Climate Legislation.” Chairman Edward Markey (D-Mass.) attempted to engage six expert witnesses in a nuanced discussion of the merits of carbon offsets. But he was essentially preempted by denials and occasional hostility from several Republicans on the subcommittee.

Rep. Joe Barton (R-Tex.), the ranking member of the House Energy and Commerce Committee, opened his response to Markey by saying, “I’m not sure we need climate change legislation, as you well know, Mr. Chairman, but if we do need it, offsets might be something we could do theoretically, if they work, which I don’t think they do.”

Fair enough, although it raises questions about the purpose of the debate (and Barton didn’t help his case when he said later, “I’m probably below average in my ability to understand these things”). But Rep. John Shimkus (R-Ill.) really took it to another level when he started berating the witnesses, who despite their different perspectives agreed on the general need to address climate change.

First, Shimkus asked all of the witnesses whether cap-and-trade legislation with offsets would raise energy prices, and insisted on a yes-or-no answer. Every witness attempted an “it depends” response but was quickly and rudely cut off by Shimkus — everyone, that is, but the last witness, whom Shimkus told not to bother to answer.

He then had the following exchange with one of the witnesses, Graeme Martin of Shell Energy:

Shimkus: What’s the advantage of cap-and-trade over a carbon tax?
Martin: A cap-and-trade program gives you environmental certainty. …
Shimkus: So you don’t trust the government to use the tax revenue?
Martin: No, that’s not it, it’s –
Shimkus: No, I think it is.

[End of conversation.]*

At least Rep. Ralph Hall (R-Texas) had a sense of humor about his disagreement with the hearing’s premise when he told Markey, “I’ll listen to your outrageous proposal with an open mind.”

The hearing was a window into what will certainly be a very strange debate, as Congress weighs the details of legislation whose underlying principles are vehemently denied by a large percentage of the lawmakers on the right side of the aisle. It’s akin to discussing the organization of an evolution textbook with someone who doesn’t even believe in evolution, let alone that it should be taught in schools.

Ultimately, if this legislation is going to pass, it’s going to have to squeak by with some concessions to moderates, and the climate change deniers will be left largely out of the debate.

*Some of the wording of this exchange is slightly paraphrased, due to the sluggishness of my note-taking. Apologies.

It was no mystery that Rep. Henry Waxman (D-Cal.) was intent on making environment-friendly changes when he swept the chairmanship of the powerful House Energy and Commerce Committee from beneath auto-friendly Rep. John Dingell (D-Mich.) in November. And this week, that house-cleaning began in earnest.

In a reshuffling that will remove several Dingell allies from key environmentally sensitive posts, Waxman melded two E&C subcommittees — the Energy & Air Quality panel and the Environment & Hazardous Materials panel — to form the Energy and Environment subcommittee, of which Rep. Edward Markey (D-Mass.) will be the chairman, the Boston Globe reported today.

Markey, who also heads the House committee on energy independence and global warming, has long been among the most fervent congressional environmentalists, pushing for increased fuel efficiency standards and protection of the Alaska’s Arctic National Wildlife Refuge, among a long list of pet causes.

Displaced in Waxman’s reorganization will be Rep. Rick Boucher, a Virginia Democrat who has long protected the interests of Big Coal. Boucher, who heads the soon-to-be-disbanded Energy and Air Quality Subcommittee, will instead take control of the Subcommittee on Telecommunications and the Internet, a post currently held by Markey. Rep. Gene Green (D-Tex.), another Dingell ally who now heads the soon-to-be-extinct Environment & Hazardous Materials panel, is apparently out of a chairmanship.

Grist writer David Roberts has a nice wrap-up today of the implications of all this reshuffling:

This gives Markey a one-two punch: he can craft and help pass climate/energy legislation through the Subcommittee while using the Select Committee to educate other committee chairs about how the issue affects their jurisdictions. I can’t think of another committee chair who has the same kind of megaphone with which to drum up support for his own legislation, in the House and among the public.

With this move, Pelosi’s House further cements itself as the likely force for boldness on climate/energy issues in coming years. The Speaker is by all accounts a sincere and committed greenie. She has Waxman at the helm of the relevant committee. She has Markey running the relevant subcommittee and doing education/advocacy. Dingell and his allies — the go-slow lobby — have been cleared away. All systems are go.