The Sunday talk shows were full of talk about the health care reform fight: are there 60 votes in the Senate? is the public option off the table? are illegal immigrants covered? And, while consensus on any health care answers has been fleeting, everyone agrees on what is the most important question: how is President Obama going to PAY for health care reform?
The White House still lists climate change legislation as one of its priorities, but with Senate action on a bill getting pushed deeper into September – and closer to oblivion for 2009 – greens cannot help but worry that their cause will not only be eclipsed by health care, but also by the economy generally, unemployment specifically, and even foreign policy issues like the escalation in Afghanistan.
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Still, at least on the domestic stage, energy reform advocates should not look at cap-and-trade as a discrete issue in this mix. In fact, the closer the White House and Senate leaders can get to 60 on health care, the more likely it is that climate change legislation comes back to the fore. Why? Because with all currently proposed bills estimated to expand deficits even as Obama pledges not to sign a bill that increases them by so much as a “dime,” ever, he will need carbon cash to pay for Americans’ health care.
How can cap-and-trade still be the revenue-side boon that it once promised to be when there was a commitment to 100% auction-based trading? It can’t…at least not right away. And that raises one really interesting political possibility. Maine GOP Senator Olympia Snowe is widely-recognized as the “dealmaker” in health care. A member of the Finance Committee’s so-called “Gang of Six,” and — to many conservatives — a RINO on many issues, Snowe recently floated the idea of pressing a public option trigger for health care. Under a trigger proposal, a public option would not be available with the passage of a health care reform bill, but may become available if the reforms are found to be wanting in the coverage they extend to uninsured Americans.
If a trigger compromise were to be in the bill, it could track very nicely with increased cap-and-trade revenues as the carbon-trading market evolves from mostly allowance-based to auction-based. Greens should be watching the health care fight closely and pushing for reform, because the closer the White House gets to a bill, the more arms they will need to twist on cap-and-trade in order to pay for it.
Photo credit: Sierra Club and Gamesa, Inc. Press Release
This article is written by someone who obviously doesn't follow Congress at all. Read the healthcare bills they are paid for by cuts in subsidies to insurance companies, reduced waste, etc. and increased taxes either on the insurance companies or on the rich. The healthcare bills will all be deficit neutral with no involvement of cap-and-trade.
Also it needs to be this way since the money raised in the auction in cap-and-trade is needs to be used to reduce the effect on the poor (either via an extension of the Making Work Pay tax credit as suggested by Obama or via giving credits free to the regulated local utilities as in the House bill).
Again, this article is shockingly misinformed.
I also think there's a case to be made that a revenue-neutral carbon tax could be global climate strategy's salvation. In fact, The Age did an intereting story about it today that included research from former Undersecretary of Commerce in the Clinton administration, Robert Shapiro, and Dr Joseph Mason, of the Ourso School of Business at LSU and a senior fellow at the Wharton School.
Greg:
Thanks for reading, though I have to take some exception to the criticism. The Obama campaign and Organizing for America all the way up until about late March had still posted campaign documents that called for cap-and-trade revenue to pay for his health care plan.
While the current bills do not include that, they are still far from finalized and the point of the post is that this will find its way BACK IN, especially if there is a trigger.
I'll post a link to the Obama plan on carbon paying for health care.
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