Major U.S. Companies Embrace Progressive Climate Action
Major U.S. Companies Embrace Progressive Climate Action
On Wednesday, five major U.S. corporations launched a new business coalition with the investors’ activist group Ceres to call for immediate, muscular, and progressive action to fight global warming. The founding members of Business for Innovative Climate and Energy Policy (BICEP) are Levi Strauss & Co., Nike, Starbucks, Sun Microsystems and The Timberland Company. As right-wing business organizations like the Chamber of Commerce pretend that limits on pollution will destroy the economy, the members of BICEP recognize that the true threat is failing to halt catastrophic climate change.
The eight principles embraced by BICEP for national action on global warming reflect recommendations from the Center for American Progress, Green For All, 1Sky, and other progressive organizations, including a moratorium on new coal plants, no subsidies for pollution permits, aggressive efficiency standards, and green-job creation in low-income communities.
In addition, BICEP calls for greenhouse gas emissions to be at least 25 percent below 1990 levels by 2020, in line with scientific recommendations — and more than double the target set by President-elect Barack Obama.
As Mindy Lubber, president of Ceres said in a press call, tackling global warming is integral to future economic strength:
Rather than ignore risk, address the risk and turn it into an opportunity. We need to send the right and honest market signal. Carbon pollution has a cost.
The full list of recommendations: More »
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The U.S. Chamber of Chicken Littles
The U.S. Chamber of Chicken Littles
Our guest blogger is Peter Altman, Climate Campaign Director at the Natural Resources Defense Council.
Over the last several months, the U.S. Chamber of Commerce has been holding “State Climate Dialogues” around the country, ostensibly to “stimulate a national discussion on key climate change issues.” These are much more monologue than dialogue though, and the punchline is pretty consistently a prediction of economic disaster if the Congress creates a serious climate policy.
If the Chamber’s Chicken Littles stay on message, anyone attending today’s event in Detroit, Michigan is likely to hear the same old message. But many experts disagree with this view of gloom and doom.
For instance, Dr. Martin Kushler, director of the Utilities Program at the American Council for an Energy Efficient Economy, says:
The claim that taking steps to address climate change would be bad for the economy is simply not true. We know from proven experience that we can save electricity through energy efficiency programs at one-third the cost of a new power plant. With a strong energy efficiency policy we can save money and reduce carbon emissions at the same time.
Dr. Andrew Hoffman, associate professor of management & organizations, associate professor of natural resources and associate director of the Erb Institute for Global Sustainable Enterprise, University of Michigan, said:
Think of reductions in greenhouse gas emissions as a market shift, one driven by regulations at the city, state, national and international levels. But one also driven by consumer, investor, insurance and energy markets. Any company executive who ignores these shifts does so at their peril.
This week’s event in Detroit is just the latest stop in the Chamber of Commerce’s Chicken Little Roadshow to gin up worries about efforts to solve our energy and climate problems. Speakers at these events rely on questionable assumptions and even more questionable results to make their case. More »
Global Boiling: In California, It’s ‘Fire Season All Year Round’
Global Boiling: In California, It’s ‘Fire Season All Year Round’
In a weekend interview with ABC’s George Stephanopoulos, Gov. Arnold Schwarzenegger (R-CA) talks of the impact of global warming on California’s wildfires. Climate change is lowering snowpack in the Rockies and increasing droughts, heat waves and lightning strikes, stoking more intense fires over a longer season:
Through global warming, we have now fire season all year round. We used to have fire seasons only in the fall, but now the fire seasons start in February already, so this means that we have to really upgrade, have more resources, more fire engines, more manpower and all of this, which does cost extra money.
Watch it:
By May of this year wildfires were raging at levels traditionally seen only in July. After California’s driest spring in 114 years of recordkeeping, 1700 wildfires set a record 840,000 acres ablaze from June to July, costing the state more than $200 million. Fires in the past month, the worst in the Los Angeles area in four decades, have destroyed over 1000 homes. “Through last week, 1.24 million acres burned in California, the most since 1970, when consistent, modern records were first kept.”
Last month, Sen. Dianne Feinstein (D-CA) called for the Bush administration to end delays in assistance, saying, “As the climate warms and wildland fires become bigger and more intense, a rapid response is critical to prevent the spread of fires.”
Saxby Chambliss Bailed Out Wall Street, But ‘Will Not Support’ Any Relief For Detroit
Saxby Chambliss Bailed Out Wall Street, But ‘Will Not Support’ Any Relief For Detroit
Sen. Saxby Chambliss (R-GA) today announced his opposition to “any additional relief” for the auto industry, a little more than a month after voting for the troubled $700 billion bailout for the financial industry. In an online chat with the readers of the conservative website RedState, Chambliss was asked where he stands on the auto industry bailout. He responded:
The automobile industry has systemic, deep-rooted problems that money will not solve and I will not support funding any additional relief to the auto industry.
Despite the “systemic, deep-rooted problems” in the financial industry “that money will not solve,” Chambliss voted Yea in both of the Senate votes on October 1st for the $700 billion Wall Street bailout package [Vote #212, Vote #213]. The Treasury has since disbursed hundreds of billions of taxpayer dollars to investment firms and banks, but “few are rushing to make the loans that companies and consumers need to cushion the economic slump.”
It is true that the auto industry needs to be retooled to be a leader in America’s green recovery. But inaction now could mean irrevocable damage to jobs, businesses, and communities that would make industry reform exponentially more difficult. The implosion of the auto industry would be catastrophic for thousands, if not millions, of American families. As Center for American Progress fellows Bracken Hendricks and Dan Weiss, with Ben Goldstein, explain:
The auto industry is a bedrock of the economy, with “one in 10 American jobs related to auto manufacturing.” Its survival is essential for the future of advanced clean vehicle and energy manufacturing. What’s more, this extra help is imperative to preserve jobs.
The implications of a collapse of General Motors, Ford, or Chrysler are beginning to become apparent. On Thursday, “Standard & Poor’s Ratings Service lowered the credit ratings of two big auto suppliers, and put 13 others on watch for possible reductions, because of their ties to car makers.”
In an October 24 debate with his run-off opponent, Jim Martin (D-GA), Chambliss claimed the hundreds of billions in loans made by Treasury Secretary Hank Paulson “went to free up liquidity so that people in Georgia can once again begin to have the- the freeing up of that credit so that they buy automobiles.”
By the time the “freeing up of that credit” actually takes place, there very well may be many fewer automobiles for Georgians to buy. As economist and blogger Duncan Black commented on news that Congress lacks the votes for action on the auto industry, “It’s pretty interesting that we’re propping up the fake economy and letting the real economy wither.”
Progressives Won. Now What?
Progressives Won. Now What?
Our guest blogger is Brian Levine, a Senior Policy Adviser at the Center for American Progress Action Fund.
Last week, progressives won a resounding victory. The question is: Now what? Today, the Center for American Progress released its own recovery strategy for 2009 and beyond. The CAP report cautions against being “penny wise and pound foolish” as we confront large budget deficits in the short-term. We must invest immediately in health care, energy and education to help our economy through this crisis and lay the groundwork for future growth.
The report lays out a strategy that begins with stabilizing the economy by ensuring the solvency of financial institutions, restoring confidence to the credit and stock markets, and ending the housing crisis, while jumpstarting the recovery with an intelligently crafted stimulus package.
These steps must be accompanied by a sustained economic agenda that focuses on building the foundation for a brighter future. As the report points out:
Today’s crisis is not just the failing economy but the looming barriers to future prosperity in the form of unsustainable and growing levels of health care costs, the lack of adequate clean, dependable energy, and our inability to educate our children for the needs of our economy.
We must slow the growth of health care costs, which will require an upfront investment, partly because it requires universal coverage. In addition to covering everyone, we must incorporate new medical technologies into the system and promote more efficient delivery of care.
We need to invest in a new green energy infrastructure to create jobs now and begin the shift to clean, sustainable energy. Using energy more efficiently makes our economy as a whole more efficient. And renewable energy and efficiency are growth industries that can drive American economic leadership well into the future.
And the economic crisis must not prevent us from transforming the public education system to one that prepares our children to compete for high-quality jobs in the global economy and tackling the problem of college affordability.
After the period when deficit spending is needed to strengthen the economy, we must restore fiscal discipline as quickly as possible.
Dingell’s Climate Plan Is A Good Start, but Not Good Enough
Dingell’s Climate Plan Is A Good Start, but Not Good Enough
Our guest blogger is Robert M. Sussman, a Senior Fellow at the Center for American Progress Action Fund and former Deputy Administrator of the Environmental Protection Agency. Sussman is now overseeing EPA transition planning for President-elect Barack Obama.
House Energy and Commerce Committee Chairmen John Dingell (D-MI) and Subcommittee on Energy and Air Quality Chairman Rick Boucher (D-VA) unveiled their long-awaited draft of climate change legislation early last month. Longtime allies of the auto and coal industries, Dingell and Boucher have nevertheless produced a thoughtful and serious effort to grapple with the complexities of creating a cap-and-trade system. As they say in their memo to the full Energy and Commerce Committee, “politically, scientifically, legally and morally, the question has been settled: regulation of greenhouse gases in the U.S. is coming.”
The draft bill has a number of strengths for which Dingell and Boucher deserve credit. It is economy-wide, covering 87 percent of U.S. greenhouse gas emissions. It sets a long-term target of reducing emissions by 80 percent of 2005 levels by 2050 that corresponds with prevailing scientific consensus. It contains strong energy efficiency programs. It uses the allowance allocation process both to stimulate low-carbon energy technologies and provide consumers relief from high energy prices. It provides for strict oversight of the carbon markets to prevent manipulation and assure transparency. And it creates a “strategic reserve” of allowances that would be auctioned if allowance prices are too high, but avoids a “safety valve” that would suspend the emission cap if allowance prices exceed a predetermined level.
Despite these positive features, two aspects of the bill—the absence of allowance auctioning in the cap-and-trade program and weak emission reduction targets for 2020—raise serious concerns and should not be the starting point for legislative action in the new Congress. More »
Fox News: We Don’t Need GM, Ford ‘Ponzi Schemes’
Fox News: We Don’t Need GM, Ford ‘Ponzi Schemes’
In an interview yesterday morning with Fox News’ Megyn Kelly, Fox contributor Jonathan Hoenig calls the domestic auto industry a “Ponzi scheme” and possible government efforts to prevent their bankruptcy “thievery.” His advice to auto workers? “Buy a Honda. We’re going to get by just fine without General Motors and Ford.” After the interview, Fox News anchor Gregg Jarrett scoffed:
You retire and you get health care for life? Since when? I mean, no wonder the Big Three are broke.
Watch clips from the interview:
The potential collapse of the domestic auto industry, the ensuing devastation of manufacturing communities, and the dissolution of the safety net for the millions of retired auto employees and their families doesn’t faze Fox News. Nearly 3 million U.S. jobs would disappear and hundreds of billions of dollars would leave the U.S. economy if GM, Ford and Chrysler were to cease operations in 2009.
The Fox News outrage at government intervention in the auto industry comes as the AIG bailout alone has reached $150 billion. But the auto manufacturing sector is much more important to American families than the financial industry. “Every auto plant job generates another five jobs among suppliers and the surrounding community,” writes auto industry representative Dave McCurdy. “By comparison, a Wall Street job generates two additional jobs.”
Ironically, the Fox anchors are right when they criticize the manufacturers for their history of fighting higher fuel economy standards (although they completely ignored the proximate causes of the frozen credit markets and a spiraling recession). Of course, Fox is normally rabidly against any government regulations or conservation of fossil fuels. Their mindless drumbeat against global warming legislation and for increased offshore drilling is exactly the kind of right-wing propaganda that has prevented innovation in the auto industry.
Transcript: More »
If It Happens, The Auto Industry Bailout Needs To Be Done Right
If It Happens, The Auto Industry Bailout Needs To Be Done Right
There seems to be a growing consensus in Washington that the federal government needs to bail out America’s auto industry. The Wall Street Journal reported today that Sen. Harry Reid (D-NV) and Rep. Nancy Pelosi (D-CA), in a letter sent Saturday, “formally requested that Treasury Secretary Henry Paulson consider giving ‘temporary assistance to the auto industry‘ using money originally appropriated to shore up the banking system.”
President-elect Barack Obama also supports this position. During an appearance on CBS’ Face the Nation, Obama’s Chief of Staff Rahm Emanuel said that “there are existing authorities within the government today that the administration should tap to help the auto industry.”
If the auto industry bailout occurs, two things need to happen. First, it needs to have much stronger oversight than the bank bailout did. As CQ noted, “reports continue to circulate about the banks potentially hoarding portions of the $250 billion Treasury has offered to invest in exchange for senior preferred stock, or using the money for purposes other than lending.” Sen. Chris Dodd (D-CT) pointed out, “That was never the intent; that’s an abusive use of taxpayer money.”
More importantly though - as Pelosi and Reid said - “federal aid should come with ’strong conditions,’ such as requirements that car makers build more fuel-efficient vehicles.” Bill Scher at OurFuture writes, “With the auto industry in dire straits, we taxpayers have maximum leverage to demand the cars necessary to help lower energy costs, cut carbon emissions and reduce our dependency on foreign oil.”
As John Podesta, President and CEO of the Center for American Progress Action Fund - who is currently on leave to head the Obama transition - said on CNN’s Late Edition:
I think we’ve got to stabilize the current situation, but we also have to build for a stable long-term path so that they’re producing the kinds of efficient vehicles that we need in this country.
Podesta added that “the auto industry directly employs about 250,000 people and if you think about the ripple effects, they are the backbone of our manufacturing economy.” Indeed, according to estimates, one in 12 U.S. jobs is tied to car manufacturing, and a bailout of the industry could help boost the U.S.’s ailing manufacturing sector.
In a statement, Dave McCurdy, president and CEO of the Alliance of Automobile Manufacturers, said that the auto industry, if rescued, “will be on the leading edge of the new energy economy“:
Our engineers and designers continue working toward the next technology breakthroughs that will even further reduce oil dependence and carbon dioxide emissions. Our work toward meeting a national solution could create the biggest wave of ‘green jobs’ our nation has seen.
This is a promise that the next administration and Congress need to ensure the auto industry keeps.
Pollution Industry Says ‘It’s Scary’ To Think Of Waxman In Charge Of Climate Legislation
Pollution Industry Says ‘It’s Scary’ To Think Of Waxman In Charge Of Climate Legislation
This week, Rep. Henry Waxman (D-CA) announced his intent to replace Rep. John Dingell (D-MI) as chair of the House Energy Commerce & Committee, which has jurisdiction over global warming legislation. On Thursday, Dingell told WJR Radio’s Frank Beckmann that Waxman is an “anti-manufacturing left-wing Democrat” with a “serious lack of understanding of people in the auto industry and manufacturing generally.”
Representatives of major greenhouse gas-emitting industries have also recoiled at the prospect of Waxman being in charge instead of Dingell.
R. Bruce Josten, the top lobbyist for the U.S. Chamber of Commerce, “took issue with the idea of a Waxman-led committee given the Californian’s support for far more aggressive greenhouse emission limits compared with Dingell,” telling E&E News, “It’s scary, isn’t it?”
The Chamber’s public comments reinforce the anonymous “refining industry insider” who told E&E News “all hell will break loose legislatively” if Waxman won.
The coal lobby has also weighed in on this dispute. Luke Popovich, a spokesman for the National Mining Association, told Bloomberg News that Waxman likely would be “a very slow learner on the importance of coal for affordable energy. It would have been problematic in the best of times to have Mr. Waxman’s views prevail.”
Climate Progress’s Joe Romm responds, “If actually trying to prevent catastrophic global warming is ’scary’ then all I can say is ‘Boo!‘”
UPDATE: Josten and Popovich are the top figures in the Alliance for Energy and Economic Growth, the front group formed in 2001 to promote the Cheney energy bill.
UPDATE 2: In 2006, the New Republic’s Bradford Plumer wrote this review of Dingell’s impact on clean-air legislation during his 50-year tenure: More »
Heritage’s Broken Conclusions On A Green Recovery
Heritage’s Broken Conclusions On A Green Recovery
Our guest blogger is Dr. Robert Pollin, Professor of Economics and Co-Director, Political Economy Research Institute (PERI), University of Massachusetts-Amherst.
In a November 5 blog post, Dr. David Kreutzer, Senior Policy Analyst for Energy Economics and Climate Change in the Center for Data Analysis at The Heritage Foundation, claims that policy initiatives to advance a green investment agenda necessarily hurt economic growth and employment. In particular, Kreutzer claims the report I co-authored, Green Recovery, suffers from a “broken windows” fallacy:
The authors of this study fall prey to the classic “broken windows” fallacy whereby spending money creates jobs as the expenditure multiplies throughout the economy. The fallacy comes from ignoring the equally large destruction of jobs (actually larger because of something called “deadweight loss”) from taxing the $100 billion, which eliminates a similar cascade of job creation elsewhere.
Kreutzer reaches this broken conclusion by ignoring all the findings in Green Recovery. Contrary to Kreutzer’s claim that green jobs require the “equally large destruction of jobs” in other sectors, green investments are all potent sources of net job creation relative to spending on traditional fossil fuels, including oil, coal and natural gas. Our research found that green infrastructure investment program would create nearly four times more jobs than spending the same amount of money on oil energy resources. For each $1 million of green investments paid for by cutting oil subsidies, a net 12.5 jobs are created. Green investments produce net job creation because their labor intensity and domestic content are significantly higher than investments in fossil fuels.
Labor Intensity: With green investments, more money is being spent on hiring people and less on machines, supplies, and consuming energy. Imagine hiring construction workers to retrofit buildings or install solar panels, or bus drivers to expand public transportation offerings, as opposed to drilling for oil off the coasts of Florida, California, and Alaska.
Domestic Content: When we retrofit public buildings and private homes to raise their energy efficiency, or improve our public transportation systems, virtually every dollar is spent within the U.S. economy. By contrast, only 80 cents of every dollar spent within the oil industry remains within the U.S.
Through public investments in energy efficiency and renewable energy, we overturn the long-held conventional wisdom reflected in Kreutzer’s critique — that we can have a green economy or a growing economy, but we can’t have both. In fact, not only can we have both, but green public investments to fight global warming are, at once, a powerful engine of job creation and a necessary instrument for achieving environmental sustainability.
Read an extended response from Dr. Pollin, in which he also discusses the question of energy costs and how Kreutzer overlooked the economic impact of global warming.
UPDATE: At Climate Progress, Joe Romm offers a detailed critique of Kreutzer’s blog post, writing that it is a “truly bizarre disanalysis that conflates greenhouse gas regulations with a green recovery or green economic stimulus.”
A Letter To Obama: Build A 21st Century Transportation System
A Letter To Obama: Build A 21st Century Transportation System
Our guest blogger is David Goldberg, Communications Director at Transportation For America.
Congratulations! Your election, and results from down-ballot votes around the country, represents a resounding call for a new direction.
The Transportation for America campaign, representing more than 100 organizations and thousands of energized citizens around the country, salutes you. And we join you in seeking infrastructure investment that will stimulate the economy now and lay the groundwork for a clean-energy future that is less dependent on oil.
Americans are ready for this bold vision. Even in this tattered economy, citizens in California, Washington, Hawaii, Colorado and at least 10 other states voted themselves a tax increase so they could jumpstart construction of light rail, commuter train service, high-speed rail and other clean transportation options. Now they, and dozens of other communities, need a federal partner that can step up and do its part.
We call on you to follow through on the vision you offered in the campaign by acting rapidly, starting with the transition and during the first 100 days, to urge Congress to pass a smart package of stimulus investments as well as a new national transportation program. Appoint a Secretary of Transportation with a proven record of understanding both urban and rural needs, as well as how transportation, growth and development, the economy and the environment interact.
By fixing our highways, bridges and transit systems, and pushing ahead with ready-to-go rail projects, we can create millions of jobs that can’t be outsourced, launch a clean, green economic recovery, and get started on building a 21st century transportation system.
To quote our next president: “Yes, we can!”
Join Transportation for America in sending this letter with your own thoughts to the President-elect.
Big Business May Be Against The Free Choice Act, But The Public Solidly Supports It
Big Business May Be Against The Free Choice Act, But The Public Solidly Supports It
Yesterday, the Wonk Room noted that conservatives are beginning to warn against the supposedly anti-business agenda of the newly-elected progressive government, beginning with the Wall Street Journal’s report that businesses are bracing “for a cooler climate.” Meanwhile, McClatchy reported today that big businesses are preparing “for a less friendly Washington” and are concerned about “rapid passage” of the Employee Free Choice Act:
Business lobbies can take solace in one important development: Democrats appear to have failed to win enough Senate seats to reach the 60-vote margin needed to cut off debate and force votes on controversial legislation.
This numbers game is important because unions have their eye on rapid passage of the Employee Free Choice Act, which was supported by Obama and Vice President-elect Joe Biden. The legislation would end seven decades of secret balloting during union drives and instead allow organizers to collect signatures from a majority of workers to form a union. This process is called “card check.”
First, McClatchy is spreading some misinformation about the bill: it would not end secret balloting. But more importantly, lost in all this discussion of businesses concerned about the Free Choice Act is the fact that the general public supports the bill. As swing-state polling from American Rights at Work and Peter D. Hart Research Associates shows:
- Nearly two-thirds (60%) of voters believe in even in these tough economic times, it is important to pass the Employee Free Choice Act, and nearly one-third (31%) of voters strongly believe it should be a priority for Congress.
- When told about proposed legislation in Congress that would “make it easier for workers to form unions by allowing employees to be represented by a union when a majority of their coworkers sign cards saying they want to join that union,” voters favor the Employee Free Choice Act by nearly three to one (55% favor; 28% oppose).
- Voters “are more than twice as likely to say big corporations having too much power (50%) creates a bigger problem for people like them than big labor unions having too much power (23%).”
- Overall, 55% of voters in these states say they approve of labor unions, compared with just 27% who say they disapprove.
As American Rights at Work pointed out, “Despite an extraordinary $20 million spent in nine battleground states to defeat candidates who support the Employee Free Choice Act, voters soundly rejected this misleading anti-union campaign from corporate interests and overwhelmingly backed candidates who support working families.” On election day, an anti-union ballot initiative in Colorado also failed to pass.
Being in a union can considerably improve many facets of a worker’s life, through increased wages, better health insurance, and better retirement benefits. It would be nice for some media outlet to focus on that aspect of the Free Choice Act, instead of constantly allowing businesses to say how bad it will be.
UPDATE: Roll Call reports that the U.S. Chamber of Commerce has vowed to fight the bill:
U.S. Chamber of Commerce President Thomas Donohue vowed in a press conference Thursday morning that his business association would continue its battle against the Employee Free Choice Act. “Labor unions and trial lawyers will expect payback,” Donohue said. “Their agendas should alarm every business, small and large.”
Obama Plans Green Economy ‘Listening Tour’ Before Inauguration
Obama Plans Green Economy ‘Listening Tour’ Before Inauguration
Dan Kammen, the director of the Renewable & Appropriate Energy Laboratory at UC Berkeley and a top adviser to President-elect Barack Obama (D-IL), has told E&E News that Obama may conduct a nationwide “listening tour” to allow his team to hit the ground running for a green recovery:
The incoming Obama team is considering a “listening tour” around the country on energy and environmental issues before Inauguration Day in an attempt to build momentum for its policies and legislative plans.
Last month, Obama told Time’s Joe Klein that an “Apollo project” for a “new energy economy” is his top priority:
That’s going to be my No. 1 priority when I get into office.
In yesterday’s victory speech before a crowd of 125,000 in Chicago’s Grant Park, Obama indicated that listening to all people of this nation will be central to his administration:
There are many who won’t agree with every decision or policy I make as President, and we know that government can’t solve every problem. But I will always be honest with you about the challenges we face. I will listen to you, especially when we disagree. And above all, I will ask you join in the work of remaking this nation the only way its been done in America for two-hundred and twenty-one years - block by block, brick by brick, calloused hand by calloused hand.
In the 75 days before Obama takes office, he will also have to weigh in on major events already on the calendar: More »
Waxman Plans To Challenge Dingell For Control Of Energy And Commerce
Waxman Plans To Challenge Dingell For Control Of Energy And Commerce
John Dingell (D-MI) and Henry Waxman (D-CA)
Roll Call reports that Rep. Henry Waxman (D-CA) plans to challenge Rep John Dingell (D-MI) “for chairmanship of the influential Energy and Commerce Committee.” The Committee has jurisdiction over a wide array of issues, including energy policy, health care, and interstate commerce.
In the 110th Congress, Dingell and Waxman took very different stances on global warming issues. In stark contrast, Dingell opposed California’s petition to set automotive emission standards for greenhouse gases, while Waxman led hearings to investigate why the EPA denied the California waiver.
The two also took different paths after Speaker Nancy Pelosi (D-CA) called in January, 2007, for rapid action on legislation that would limit greenhouse emissions. Waxman introduced the Safe Climate Act in March to reduce emissions by 80 percent by 2050. Dingell, a longtime defender of the auto industry, instead worked through a series of hearings and white papers on this complex issue to introduce draft legislation this October.
Dingell “put aside” the global warming legislation to push a provision in the 2007 energy bill that increased fuel economy standards for the first time in decades. When signed by President Bush in December, it marked a major achievement for the environment and the economy — but has since been used by the Bush administration for an excuse for inaction on mandatory global warming regulations.
As Roll Call writes, “The move marks a major showdown between two Democratic powerhouses.”
UPDATE: E&E News reports:
“This is a fight for all the marbles,” said one refining industry lobbyist. “If Henry gets this, my god, given the scope of jurisdiction of the Energy and Commerce Committee, all hell will break loose legislatively if Waxman chairs this thing.”
‘Vital First Steps’: Extending Unemployment Benefits
‘Vital First Steps’: Extending Unemployment Benefits
Today, Bloomberg reported that Congress may be taking up a stimulus bill in a lame-duck session following today’s election, and that “lawmakers are facing growing calls for a measure that would dwarf the $168 billion economic stimulus package signed into law in February.”
The size of the stimulus bill is the subject of serious debate, with economists saying anywhere from $300 billion to $500 billion may be necessary “to prevent a deepening recession.” Goldman Sachs economists said that the measure should equal $500 billion “in order to offset a big slowdown in consumer and business spending.”
The Wonk Room has been arguing that the stimulus should be aimed at infrastructure projects, which - as Paul Krugman noted - “the country badly needs in any case.” However, there is another key facet that the stimulus bill should address: unemployment benefits. The U.S. unemployment rate was 6.1 percent in September. As former Secretary of Labor Robert Reich noted:
More than 1 in every 5 people out of work have been looking for six months or more. And many are running out of unemployment benefits. The National Employment Law Project estimates nearly 800,000 will run out this month. And another 350,000 in November and December. That means they won’t be able to pay their bills, including their mortgages. Already this year, almost half of mortgage delinquencies have been caused by homeowners’ lacking of income or employment.
This idea has already garnered opposition from conservatives in Congress. As CNN Money reported today, House conservatives are against extending unemployment benefits:
Mike Steel, an aide to House Minority Leader John Boehner, R-Ohio, said the Republicans would prefer to pass a stimulus bill that didn’t include extensions in unemployment benefits, food stamps and infrastructure projects, arguing they take too long to effectively boost the economy.
Boehner and other conservatives are incorrect if they believe extending unemployment benefits will not quickly boost spending. As the Center for American Progress has noted, “the immediate macroeconomic benefit of putting more money in the pockets of unemployed Americans looking for work is reason enough to extend benefits. This is stimulus money that will swiftly and assuredly flow back into the economy.”
As CAP’s Michael Ettlinger wrote, “moves to help the unemployed and those who are being hit hardest by the deteriorating situation should be included” in a stimulus package, as they are the “vital first steps to getting our economy stabilized and providing stimulus to stop the bleeding.”
Are You Better Off Than You Were Eight Years Ago?
Are You Better Off Than You Were Eight Years Ago?
Our guest blogger is Adam Jentleson, the Communications and Outreach Director for the Hyde Park Project at the Center for American Progress Action Fund.
In 1980, Ronald Reagan famously asked America, “Are you better off than you were four years ago?”
After eight years of conservative rule, it’s worth posing a similar question – are Americans better off today than they were eight years ago?
As our new memo shows, unless you happen to be a big corporation or make enough money to be in the top percentage of earners, the answer is probably no:
A variety of metrics can be used to judge this question and assess what eight years of conservative policies have wrought. The picture painted here is clear: from job growth to debt, and from income disparity to national poverty indices, the conservative approach of putting big corporations and the very wealthy ahead of the middle class has failed to create prosperity that can be shared by all Americans.
Norm Coleman’s Economic Agenda: Pay Raises and Spending Freezes?
Norm Coleman’s Economic Agenda: Pay Raises and Spending Freezes?
The Wonk Room and ThinkProgress have already documented Sen. Norm Coleman’s (R-MN) embrace of the Neo-Hooverist agenda, after he said that his “plan” to tackle the economic crisis is to “balance the budget in 5 years” and install a variety of spending cuts and freezes.
Last night, during a debate on Minnesota Public Radio (MPR), Coleman doubled down on the Neo-Hoover line when he was asked which item on his agenda he would sacrifice due to the financial crisis. The only “agenda item” that Coleman was able to come up with was congressional pay raises, but he was quick to advocate a five-year spending freeze:
Coleman: You can start with congressional raises. You can put a cap on spending for five years. […]
Moderator: So is there anything that you would be willing to give up in light of the financial situation facing the nation?
Coleman: I’ll give up my raise.
This answer is interesting on two fronts. First, it would appear that Coleman is saying congressional pay raises are part of his platform, though Bob Collins of MPR noted “Technically, I don’t think a raise for himself was on his agenda.” Also, in September, “when a supporter suggested he should push Congress to take no pay increase or per diem increase for the next four years to show solidarity with struggling Americans,” Coleman said members of Congress “deserve a reasonable pay raise but not special treatment.”
The far more important point, though, is that Coleman has not backed down from his spending freeze, even though a host of economists, budget analysts, academics, and lawmakers have said that now is not the time to chill government spending. Indeed, Harvard economist Martin Feldstein wrote last week that “the only way to prevent a deepening recession will be a temporary program of increased government spending.”
Today, in the Washington Post, Robert Rubin and Jared Bernstein became the latest to join the chorus:
[W]e both agree that our economic future also requires public investment in critical areas like education, health care, energy, worker training and much else. […] [C]ertain public investment can help us meet our fiscal challenges.
Will Norm Coleman come around to supporting increased infrastructure spending, or will he continue to cling to the Hoover agenda?
Reynolds’ Rant
Reynolds’ Rant
Our guest bloggers are Robert Gordon and James Kvaal, senior fellows at the Center for American Progress Action Fund.
In this weekend’s Wall Street Journal, Alan Reynolds accuses us of being lawyers, not economists. We are guilty as charged. But the rest of Reynolds’ rant is wrong.
Reynolds disputes our organization’s estimate that John McCain’s tax plan is worth $3.8 billion to the five largest American oil companies. He claims that we excluded the oil companies’ deductions and credits from our analysis. But we did include deductions. And though we excluded credits — because they are not publicly available — they would have only increased the size of our estimate.
Our estimate is conservative in other ways as well. It used 2007 profits, even though oil companies are breaking all the records this year. It did not count McCain’s big expansion in deductions for business investment. And it did not include oil companies’ foreign profits.
We analyzed 200 companies last spring, and our results have been featured in millions of dollars worth of advertising. None of these companies have disputed our results. In fact, no one did until Reynolds wrote his column three days before the election.
Reynolds gets the big things wrong as well. There is little reason to think corporate taxes put American businesses at a competitive disadvantage. Corporate tax collections are among the lowest in the world because our code is riddled with special interest deductions, credits and exemptions that shield corporate profits from tax. While corporate tax reform is overdue, John McCain’s plan would drive up the deficit, shift the tax burden onto middle-class wages, and harm the economy.
Roubini To The Neo-Hooverites: An Economic Stimulus Package Can Make The Deficit Smaller
Roubini To The Neo-Hooverites: An Economic Stimulus Package Can Make The Deficit Smaller
The Wonk Room has been arguing recently that an economic stimulus package is a necessary step towards recovering from the current financial crisis. The counter argument - which Matthew Yglesias calls “Neo-Hooverism” - is that the government should exercise fiscal restraint and curb spending, out of concern for widening deficits.
However, during a hearing today before Congress’ Joint Economic Committee, New York University Economics Professor Nouriel Roubini explained that failure to enact a fiscal stimulus could actually result in wider deficits as the economy contracts. In his estimate, this would send the U.S. into a “very severe recession.” Watch it:
Roubini is part of a growing chorus of voices calling for a fiscal stimulus. Yesterday, Gov. David Paterson (D-NY) and Gov. Jon Corzine (D-NJ) joined in, saying that “state governments would face devastating cutbacks if they did not receive assistance soon”:
“We are cutting all we can,” Mr. Paterson told the House Ways and Means Committee. “Therefore, we feel that targeted, sensible actions by the federal government will provide relief for us now.”
CAP’s Michael Ettlinger agrees, noting that “of particular importance are steps to help state governments so that they don’t become a drag on the economy as their revenues dry up and demand on their services grows.”
Today, the economic stimulus package also received an endorsement from Professor Martin Feldstein, an economic adviser to Sen. John McCain (R-AZ). In the Washington Post, Feldstein wrote:
The only way to prevent a deepening recession will be a temporary program of increased government spending. Previous attempts to use government spending to stimulate an economic recovery, particularly spending on infrastructure, have not been successful because of long legislative lags that delayed the spending until a recovery was well underway. But while past recessions lasted an average of only about 12 months, this downturn is likely to last much longer, providing the scope for successful countercyclical spending.
As Matthew Yglesias noted, Feldstein “gingerly avoids pointing out that this is the reverse of what his preferred candidate is proposing.” Indeed, McCain has said that he will freeze government spending on everything besides what he deems to be “vital” programs.
Feldstein believes that government spending is the only way to avoid a deeper recession. Will McCain get the message and endorse a full stimulus package?
Note To McCain: It’s ‘A Matter Of History’ That Hoover Cut Federal Spending
Note To McCain: It’s ‘A Matter Of History’ That Hoover Cut Federal Spending
During an appearance on Fox News’ Hannity & Colmes last night, Sen. John McCain (R-AZ), as he is fond of doing, invoked Herbert Hoover to warn against Sen. Barack Obama’s (D-IL) economic plan. “There was a president named Herbert Hoover,” said McCain. “They raised taxes, they practiced protectionism and they went from a serious recession into a deep depression. Now, that’s a matter of history.” Watch it:
However, there is another matter of history that McCain should look at regarding Hoover’s actions. Responding to the recession, and “convinced that a balanced federal budget was essential to restoring business confidence, Hoover sought to cut government spending and raise taxes.”
In fact, before the 1932 election, Hoover was touting his successful push to reduce government spending:
The extension of governmental expenditures beyond the minimum limit necessary to conduct the proper functions of the Government enslaves men to work for the Government….[T]he ordinary expenses of the Government have been reduced upwards of $200 million during the present administration. They will be decidedly further reduced.
Hoover’s approach was clearly unsuccessful, and late in his administration, he tried to recover:
As conditions worsened, Hoover’s administration eventually provided emergency loans to banks and industry, expanded public works, and helped states offer relief. But it was too little, too late.
There is a growing consensus among economists, budget analysts, and lawmakers that the next administration should not subscribe to what Matthew Yglesias has called “Neo-Hooverism” — mass spending reductions as a response to the financial crisis. McCain, however, consistently promises to balance the budget and has advocated a complete spending freeze on everything besides several “vital issues.”
If McCain really wants to use Hoover as an example of what should not be done in response to a recession, he needs to include the entire story, and not cherry-pick the most convenient of Hoover’s actions.
Heritage Foundation Compares New Deal To Nazi-Soviet ‘Collectivism’
Heritage Foundation Compares New Deal To Nazi-Soviet ‘Collectivism’
The Heritage Foundation, a once proud bastion of conservative thought, is now resorting to absurd historical revisionism and mentions of “Nazi Germany” to attack needed progressive policies. Heritage blogger Nick Loris responds to the United Nations Environmental Program’s Green Economy Initiative and the Center for American Progress’s Green Recovery program with this absurd rant:
The United Nations is proposing an environmental ‘New Deal’ that would “be similar to Franklin D Roosevelt’s New Deal which helped the US recover from the Great Depression of the 1930s.”
First, the reality is that FDR’s New Deal did not help the U.S. recover from the Great Depression but simply made things worse. Second, the only thing a green ‘New Deal’ will do is lead us down a Green Road to Serfdom. (Nobel Laureate Friedrich Hayek’s The Road to Serfdom is a telling portrayal of what collectivism in the Soviet Union and Nazi Germany can lead to: impoverishment and oppression of freedom.)
In fact, economists broadly agree stimulative government spending is necessary to prevent a further collapse of the global economic system — just as the New Deal and the deficit spending of World War II restored the health of the global economy in the last century.
Scientists are warning with increasing stridency that carbon emissions must be drastically curbed to prevent a collapse of the world’s climate system. Instead of recognizing the real threat of the climate crisis, Loris writes, “The threat of climate change legislation is very real and very scary.”
Loris’s charge of Nazi-Soviet “collectivism” is utterly bizarre. The U.N.’s Green Economic Initative is a mainstream capitalist effort, with research overseen by Pavan Sukdhev, a top investment banker and self-described “total capitalist.” Its press release celebrates venture capital firm Kleiner Perkins, public-private partnerships, and growth of international markets. CAP’s Green Recovery program primarily uses tax credits and federal loans to spur private investment, as well as investment in a 21st-century public infrastructure.
A cap and trade system to limit greenhouse pollution would correct what economist Sir Nicholas Stern called “the greatest market failure in history” — the failure to put a price on the pollution that is causing global warming. The fossil fuel industry is energy- and capital-intense, but creates few jobs. Despite Loris’s baseless claims that “taxing and spending does not create wealth,” moving to a green economy will in fact generate more jobs and greater economic growth, as California’s green economy has proven.
The Heritage Foundation is sliding into irrelevance. The last eight years of conservative misrule in Washington have demonstrated convincingly the failure of the right-wing policies it heralds. By all logic, preserving the planet from runaway global warming and restoring the health of the international free-market economy should be conservative ideals. Instead, they’re spending their time and money promoting puerile YouTube videos.
Boehner Proposes Tax Cuts For Corporations and Millionaires To Save The Economy, Again
Boehner Proposes Tax Cuts For Corporations and Millionaires To Save The Economy, Again
Today, Rep. John Boehner (R-OH) is “preparing to unveil a major economic initiative” aimed at “economic recovery.” Based off of an earlier “alternative” to Rep. Nancy Pelosi’s stimulus package - and outlined in a memo circulated last weekend - Boehner’s plan includes tax cuts for coprorations and zeroing out the capital gains tax.
Ultimately, the plan is a mere conglomeration of ideas plucked from the conservative tax cut wishlist and won’t do what Boehner intends:
- If we cut taxes on small businesses, they’ll use the money to create jobs.
As the Wonk Room has previously noted, tax cuts do not spur business investment. Private business investment actually rose after President Clinton’s tax increases and fell after both the Reagan and Bush tax cuts. As Princeton professor Uwe E. Reinhardt wrote “I would challenge supply-siders to explain why the owners of small businesses — say, restaurants — would expand the capacity of their establishments or build new restaurants at a time when customers stay home, even if they were given a tax cut on the income from their restaurants.”
- A zero capital gains tax is the fastest way to rebuild Americans’ 401(k)s.
The benefits from a capital gains tax cut go overwhelmingly to millionaires, particularly given the current economic climate, in which “the middle class doesn’t collect capital gains, or dividends, in any material amount.” As Michael Ettlinger pointed out “benefits of capital gains tax cuts overwhelmingly go to those who own capital assets outside of retirement.” Furthermore, Ettlinger noted “a 0% capital gains rate would in fact be a disaster for the market.” “Given the uncertain times we face, it’s far more likely that a zero rate on capital gains would prompt a massive exodus from the market than a massive entry into it,” he wrote.
Boehner is also proposing a reduction in the corporate tax rate from 35 percent to 25 percent. As the Wonk Room has noted over and over, this proposal does not create jobs. A study by the Center for American Progress Action Fund found that increased corporate profits do not trickle down, and that corporations invest little in new commercial structures such as factories and office buildings.
As evidence that his plan will be well received, Boehner cites a New Models/Winston Group survey showing that “the American people overwhelmingly believe the focus of government economic policy should be economic growth and jobs, not income redistribution or ’spreading the wealth around.’” However, according to the latest Pew Research poll, “only 25 percent of the public agrees with the centerpiece of the conservative tax program: making all of the Bush tax cuts permanent.”
Instead of presenting a bailout stimulus package economic recovery plan based on trickle-down tax cuts - much in the manner of Sen. James Inhofe (R-OK) - Boehner should take a serious look at stimulus thru infrastructure investment, an idea which is gathering widespread support and could actually help the economy recover.
McCain’s Series Of Flaccid Stimulus Proposals
McCain’s Series Of Flaccid Stimulus Proposals
Today, Sen. John McCain (R-AZ) held a roundtable with some of his economic advisers, including