What the healthcare act means for US climate legislation

The signing of the US healthcare bill on Tuesday has once again sent the compass needles of Washington’s pundits spinning. Having spent the past few months characterising Washington’s Democrats as political zombies incapable of passing major reforms, commentators are now pondering the fate of the congressional Republicans who failed to stop the White House’s agenda from lurching back to life.

At the moment, it’s hard to judge exactly what this will mean for climate change legislation. The White House will need a handful of Republican Senators to offset expected Democrat defectors from coal states, so the lessons that the Republicans draw from the healthcare process will be crucial.

One possibility is that the law is simply dead. Flipping Republicans into the “yea” camp was always going to be tough – especially as their Senate leader Mitch McConnell appears to have chosen a more-or-less explicit strategy of blocking all major Democratic legislation on principle. It is likely to be even more so, now that this week’s defeat has left many Republicans feeling deeply bitter – as demonstrated by John McCain this week:

“There will be no cooperation for the rest of the year,” McCain said during an interview Monday on an Arizona radio affiliate. “[Democrats] have poisoned the well in what they’ve done and how they’ve done it.”

On the other hand, the scale of the setback over healthcare has prompted some soul-searching among parts of the US right – most prominently by George W Bush’s former speechwriter David Frum:

At the beginning of this process we made a strategic decision: unlike, say, Democrats in 2001 when President Bush proposed his first tax cut, we would make no deal with the administration. No negotiations, no compromise, nothing. We were going for all the marbles. This would be Obama’s Waterloo – just as healthcare was Clinton’s in 1994. [... But] This time, when we went for all the marbles, we ended with none.

The advantages of offering to share the marbles could be considerable: many of the Republican party’s biggest donors are in the oil and gas industry, and opposition Senators could have huge influence in shaping the final bill if they were able to provide the votes to get it through Congress.

The initial noises coming from the Senate suggest that progress on the climate front is grinding slowly forward. But the path to passage of a bill – particularly one that includes a price on carbon emissions – seems a lot narrower than the one leading towards failure.

For one thing, the Frum argument for constructive participation only really works if Republicans are convinced a bill would still pass without their support – and the arithmetic of getting to 60 Senate votes looks tough.

In theory, Democrats could use the same reconciliation process they used for the healthcare bill, which only requires 50 votes. However, the Senate has already voted by a 67-31 majority not to use the tactic on this issue. And tellingly, the White House and congressional leadership have been indicating that financial reform, jobs, and immigration are the key priorities ahead of the November midterm elections.

Nonetheless, one factor that favours passage of a Senate bill is that large parts of the energy lobby are strongly in favour of legislation that would give them more certainty over long-term investment plans. In particular, the oil and gas industry is pushing hard to level a playing field which it sees as favouring the coal sector.

A loosening of federal restrictions on offshore drilling may form a crucial part of any deal. That may not seem particularly green, but lobbyists will make the T. Boone Pickens argument that oil and gas usage – particularly gas – will supplant energy from dirtier coal-burning plants. More importantly, a sweetheart deal for the offshore industry could help win votes from Senators such as Florida’s Mel Martinez, Louisiana’s Mary Landrieu and Alaska’s Mark Begich, not to mention Lindsey Graham himself, whose home state of South Carolina hopes to add more than 2,000 jobs from exploration of its offshore reserves.

Related links:
A multi-pronged approach for the US climate bill (FT Energy Source)

Energy Source is no longer updated but it remains open as an archive.

Insight into the financial, economic and policy aspects of energy and the environment.

Read our farewell note

About the blog

Archive

« Feb Apr »March 2010
M T W T F S S
1234567
891011121314
15161718192021
22232425262728
293031