Looks like Tea Party America has busted a cap in cap-and-tax. Following sweeping Republican election victories, President Barack Obama has conceded his cap-and-trade plan to cut carbon emissions is dead for the foreseeable future. “I think there are a lot of Republicans that ran against the energy bill that passed in the House last year, Obama said at a Nov. 3 press conference. “And so it’s doubtful that you could get the votes to pass that through the House this year or next year or the year after.”
Yet Obama added that cap-and-trade “was just one way of skinning the cat.” You see, the president has a plan B: Let the Environmental Protection Agency work its magic on American business. The EPA would begin regulating pollution from large factories and power providers starting in January. Now Obama acted like the agency has no choice. “The EPA is under a court order that says greenhouse gases are a pollutant that fall under their jurisdiction,” he added.
But that isn’t quite true. The Supreme Court ruled in 2007 that the EPA had the right to regulate emissions of greenhouse gases under the Clean Air Act – but it was not mandated to act. Even regulators admit this alternative is more economically harmful than a system where companies can offset carbon use by purchasing tradable permits. (And a straight carbon tax offset by payroll tax cuts would be even better.) But that drawback is a desirable feature to the White House. They’ve been hoping the threat of onerous EPA action would spur business to bring Republicans around.
The GOP response earlier this year was to try and strip the EPA of its relevant authority. The effort didn’t work, but it might next year. Republicans could try the same approach or attempt to cut funding for what it now mocks as the Employment Prevention Agency. Either measure would easily pass the GOP-controlled House. The Senate, still run by Democrats, would be a tougher slog. But between six additional Republicans and a dozen nervous red-state Democrats up for reelection in 2012, an anti-EPA bill might have the 60 votes needed for passage.
Obama could still veto the bill, of course. But legislation that merely forestalled EPA action until the economy perked up might stay his hand. Or Republicans could attach it to some more important spending measure, reducing the chances of a veto. And the threat of defunding — and endless Capitol Hill hearings — could make the EPA think twice
If all else fails, business has its own Plan C: tie the agency up in court. The EPA’s last big clean air effort inspired a decade of legal challenges. One tactic works regardless of which party is in power: If you can’t legislate, litigate.