teacup pigAs the Kerry-Graham-Lieberman climate bill teeters on the precipice, some greens are once again pushing for climate legislation to move through the budget reconciliation process, which requires only a 51-vote majority, instead of the standard bill process, which (thanks to absurd filibuster rules) requires a 60-vote supermajority.

Kate Sheppard has a post making the most salient point: it almost certainly ain’t gonna happen. The Senate voted 67-31 last April to rule it out for climate legislation; the Senate Budget Committee passed a similar amendment last week. Maybe if Graham bails and the KGL process falls apart completely it will revive a reconciliation push, but it’s highly unlikely. That would require political brass balls, and neither the Senate Dem caucus nor Obama has demonstrated any on this issue.

What about the substance, though? Is a climate bill via reconciliation a good idea on the merits?  As we contemplate these weighty and (my colleagues tell me) deathly boring issues, let us carry along with us some tiny little teacup pigs. OMFG SO CUTE.

Reconciliation 101

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teacup pigReconciliation is widely misunderstood. It’s not an all-purpose procedural trick that allows the Senate to pass legislation with a simple majority. It was designed to ease passage of the federal budget, and ever since the famed Byrd Rule, only provisions that have direct budgetary impact can be included in it. The health-care reform bill didn’t pass via reconciliation — it passed with 60 votes in the Senate and was amended via reconciliation. The amendments affected only aspects of the bill that had direct budgetary impact (subsidies, taxes, etc.). The other parts of HCR, like insurance industry reforms, couldn’t have passed via reconciliation, because they aren’t budget-related. (Read this classic post in which Jon Chait basically loses his mind trying to explain this, for the gazillionth time, to political reporters.)

So: only budget-related items — taxing and spending — can pass via reconciliation. What does this mean for climate legislation?

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Climate through the reconciliation filter

teacup pigYou can think of good climate policy as a three-legged stool: legislation, regulation, and investment. U.S. elites like to pretend that all regulation is “command and control” and discredited in our enlightened neoliberal age, but neither America nor any other developed democracy behaves that way in practice. Regulations are rules of the road, and most roads need rules. (Energy markets, in particular, are in dire need of both simpler and greener rules.)

Reconciliation would effectively chop off the regulatory leg of the stool. It would, for instance, rule out at least half the provisions in the Waxman-Markey ACES bill that was passed by the House last summer, most importantly renewable-energy standards (which drive cleantech deployment and innovation) and energy-efficiency standards (which save money and reduce emissions). On the bright side, it would also preclude any rollback of EPA authority or preemption of state climate programs.

Reconciliation allows for changes to taxes and expenditures. In climate legislation, money can be raised (sticks) and spent (carrots) in a number of ways. It can be raised through a price on carbon: a cap-and-trade system like ACES, a hybrid system like the (rumored) KGL bill, a cap-and-dividend system like the Cantwell-Collins pony, or the much-feted “simple carbon tax.” Despite the heated disputes among proponents of those different systems, they’re more or less equivalent economically.

Money could also be raised by rolling back existing tax breaks and subsidies to fossil fuels. Solve Climate has an excellent post on how difficult it is to determine exactly what counts as a subsidy, but also the potentially enormous sums involved.

Money can be spent any number of ways — as free permits under a cap-and-trade system or cash under a carbon tax — on a number of things: clean energy RD&D, dividends to taxpayers, reductions in distortionary taxes, and (most likely!) transition assistance to pay off affected and politically opposed industries.

It’s clear, then, that in terms of carbon pricing and spending, reconciliation offers quite a bit of flexibility to satisfy industry demands and smooth out regional disparities. In this way it is unlike health-care reform, the structure of which simply couldn’t have worked without the regulatory measures; a climate bill through reconciliation would be incomplete, but a clear improvement over the status quo.

Two bills?

teacup pigThe above considerations suggest a possible strategy: pass efficiency and clean-energy standards in a separate bill through the normal committee process, and pass carbon pricing/spending through reconciliation.

Problem is, it’s not clear that either of those bills could get enough support to pass. Renewable-energy standards have failed many times before in the Senate, and the one that passed through Bingaman’s Energy Committee is weak to the point of useless. Same for its efficiency provisions; for reasons that continue to mystify me, the Senate isn’t that bold on efficiency either.

Nor is it clear that there are 50 votes in the Senate for a climate pricing system. Check out Brad Johnson’s compendium of silly climate-related amendments that have found majority support in the Senate, including a couple with the absurd stricture that no climate policy raise electricity or gasoline prices. Even now in E&E’s running compendium of Senate climate votes [PDF], there are only 39 in the “yes” or “probably yes” category.

This is to say nothing of the simple fact that it’s incredibly difficult to get any bill going in the Senate, much less two. The order could screw things up too: Pushing a bill through reconciliation first could so exacerbate partisan tensions as to make passage of a separate energy bill impossible. Passing an energy bill first could further sap the already tenuous political will to price carbon.

To sum up

There is a path to strong climate policy that travels through reconciliation. But for it to succeed would require a strong, coordinated push from Senate Democrats, in concert with the White House and at considerable political risk, for bills that likely wouldn’t be much stronger than what KGL proposes.

If there were political will for such a push, on either end of Pennsylvania Ave., it would be swinging behind the existing bill. There are some signs of life, but as yet nothing of the intensity that will be required to secure victory against long odds. Fecklessness, it seems, rules the day, and reconciliation is not a path for the feckless.

In short, reconciliation — like Cantwell-Collins, like the carbon tax, like the energy-only bill, like so many others that have come and gone in this debate — is another pony, gamboling just out of reach, enticing largely because it it’s hypothetical, serving mostly to distract attention from the haggard pack horse that is, for all her faults and infirmities, the only ride we’ve really got. 

teacup pig