President Talks Climate Change, 'Cash for Clunkers,' with House Democrats

Jake Tapper
ABC News
May 5, 2009

President Obama signaled a willingness to compromise on major environmental
legislation, a key House Democrat said today.

The president held a private meeting in the State Dining Room Tuesday morning
with Democratic members of the House Energy and Commerce Committee, after which
members of the committee spoke to reporters.

The most contentious issue in the Climate Change bill -- on track to be voted on
in the House this year, House Energy and Commerce Committee, Rep. Henry Waxman,
D-Calif., said -- is a "Cap and Trade" system.

In "Cap and Trade," the federal government would limit the amount of carbon
emissions permitted, and require companies to bid in an auction for permits to
emit greenhouse gases.

Eventually the government would lower the amount of credits available. Firms
that reduced their emissions below the required level could auction leftover
credits to other polluters.

Some power companies have been lobbying for the administration to initially give
free allowances to some utility companies, so as not to drive consumers' utility
bills too high.

The president has previously stated that his preferred approach was a "100
percent auction," with some Democrats discussing giving tax rebates to consumers
adversely impacted.

Asked how President Obama today received suggestions to allow free allowances,
Waxman said that the president "wants us to try to work out our bill. And he’s
giving us a lot of latitude to do that. He wants us to move. He wants legislation."

When a reporter suggested that such a move would be contrary to the president's
budget, which counts $645 billion in tax revenue raised from "Cap and Trade"
fees, Waxman said, "I wouldn’t say it’s contrary. He wants us to get to a point
where we’re going to have an auction and eventually we will look into an

Waxman said that off-shore drilling expansion was also discussed during the
meeting, though the president had previously stated his opposition to such drilling.

The group of House Democrats said they made progress on one key provision of the
Climate Change bill: so-called "Cash for Clunkers" legislation.

"Once in a while when you're in Congress, you do something that really matters
in people's lives," the president said in the meeting, participants recounted,
referring to the compromise worked out on "Cash for Clunkers."

Amidst some disagreements between more environmentally-conscious members of the
committee, and those from Michigan and other Rust Belt states, a collaborative
agreement was reached today, Rep. Betty Sutton, D-Ohio, the author of the
original bill, told ABC News.

Under the new agreement, consumers will be able to trade in a "clunker" -- a car
that gets 18 miles per gallon or less -- for a voucher for a new fuel-efficient
car. The amount of the voucher will range from $3,500 to $4,500, depending upon
the fuel efficiency of the new vehicle.

"Cash for Clunkers" legislation will likely be folded into a larger Climate
Change bill, which Waxman said is on schedule to pass the House this year.

"We are determined to pass a bill by this year and our committee is on a
schedule to complete the markup on the legislation by Memorial Day recess,"
Waxman said. "The president said that he wants legislation, he wants us to move
as quickly as possible. He said this is an opportunity to move and we ought to
take this opportunity."

Waxman said that the environmental legislation will not interfere with the
health care reform bill, which President Obama has suggested is a higher priority.

Asked how the committee plans on dealing with requiring polluters to reduce
carbon emissions, he said, "the proposal for dealing with the carbon emissions
is to put a cap on the amount of emissions that will be reduced over the years
and within that cap we will have market-based system to promote innovation to
reduce our reliance on carbon energy."

Republicans and some Democrats suggest that the costs to corporate America of
any fee on pollutants -- what's called "Cap and Trade" -- will be passed on to
consumers, constituting a hidden tax. (House Republicans are even doing their
own count of Democratic Senators and Members of Congress who have expressed
concerns about the bill.)

Waxman said the burden on consumers and particular regions would be factored
into the legislation.

"It’s going to require during that transition of period of decades for the
Congress to deal with the cost to consumer and the cost to different industries
and the development costs of the new technologies, and the allocations of the
credits under the cap and trade bill."

The California Democrat added that the committee members "are trying to be
mindful of the regional concerns and the rate-payers particularly, the
consumers, and that’s the purpose of our legislation and we’re going to maintain
the integrity of that." He said the committee aims to protect the "rate-payers,
the public, and to ameliorate the harm that may come to any region of the
country that might be affected by the cap because of their industry."

As for that other legislative body, the Senate, where Cap and Trade would have a
more difficult time surviving a vote, Waxman said "the Senate is waiting for us
to put together a consensus with the business community and the environmental
community. ... We think we have the ability to get that kind of consensus."

Consensus among Democrats in the House Energy and Commerce Committee, said Rep.
Ed Markey, D-Mass., is no small thing.

"If we can reach agreement with the coal sector, with the steel, with the auto
sector, with the refining sector on our committee which is very representative
of the Congress on the whole, then we believe that will be a template for
passage in the Senate as well."

Take the varied voices on Cash for Clunkers, for instance.

"We had to decide how green these cars need to be to get that credit,"
environmentally-focused Rep. Jay Inslee, D-Wash., told reporters.

"It's a good agreement," agreed former committee chairman Rep. John Dingell,
D-Mich., a leading protector -- some say enabler -- of the U.S. auto industry.

"It means sales of autos, it means fuel efficiency and it means progress."


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