Boxer-Kerry Climate Change Bill Faces Uphill Battle

The night that the American Clean Energy and Security Act passed the House Energy and Commerce Committee, Rep. Ed Markey, one of the bill's authors, got a phone call from Rahm Emanuel. The significance of the legislative feat achieved by Markey and committee chair Henry Waxman—persuading a relatively conservative committee filled with coal-state representatives to approve a comprehensive climate-change bill—is a fact oft forgotten in the rowdy world of climate politics. But it wasn't lost on a seasoned political operative like Emanuel. "Congratulations," the sharp-tongued White House chieftain told Markey. "I really wasn't sure you had the votes."

Climate-change legislation now faces a similarly uphill battle in the Senate. Though it was originally slated to be considered in late 2009, prospects for it reaching the floor before 2010 are dim. In early September, Sens. Barbara Boxer (D-Calif.) and John Kerry (D-Mass.) pushed back the release of their comprehensive climate bill, which will serve as a companion bill to Waxman-Markey. When questioned last week about the outlook for climate-change legislation, Majority Leader Harry Reid (D-Nev.) told reporters that his calendar was "very, very busy" for the rest of the year, adding that, "of course, nothing terminates at the end of this year. We still have next year to complete things." Aides scrambled to walk back those comments, saying that no, he does want to move quickly. Reid's press secretary, Jim Manley, says his boss still intends to pursue all three of the president's legislative priorities this year: health-care reform, regulatory reform, and global-warming legislation. He believes there will be a bill on the Senate floor by year's end. Still, Reid's comments continue to fuel speculation that climate-change legislation won't see the light of day until 2010.

Privately, Democratic Senate staffers admit they're taking their cues from the White House, which is signaling to senators that once health care is done, reform of the financial sector is President Obama's next priority.

Senate Democrats from coal and heavy-industry states witnessed the political backlash visited on their House counterparts after they voted for the Waxman-Markey bill. They're waiting for a push from the president before facing the same. "Do you think that the House would have gone ahead like that without a green light from the White House?" asks one Senate Democratic staffer.

Appropriations bills throw another monkey wrench in the works—the Senate has fallen significantly behind in passing them, and the fiscal-year deadline is fast approaching.

Still, Boxer and Kerry—with the approval of key White House officials—are forging ahead. They're planning to drop their bill in the very near future. Insiders say the two have developed a strong alliance. They'll need it. Climate-change legislation is exceedingly tricky, and the politics are unusual: support tends to fall along regional rather than political lines, and there are senators who want to get involved to claim some of the credit—and others who want to water it down or protect their home-state interests. As chairs of the environment and Foreign Relations committees, respectively, Boxer and Kerry represent just two of the six committees that have jurisdiction over the legislation. (Foreign Relations has jurisdiction over sections that relate to international affairs, such as technology licensing and oceans.) Energy, commerce, finance, and agriculture could each weigh in.

That worries environmentalists who see finance chair Max Baucus struggling to pass health-care legislation, and anticipate energy chair Jeff Bingaman being an influential—and likely industry-friendly—voice. Once Boxer's bill passes out of her committee, it will be paired with energy legislation already marked up in Bingaman's committee. Then it will be up to Reid to stage-manage competing committee interests and present a completed leadership bill to the Senate. "It's ultimately going to be up to the Senate leadership to make it or break it, and that really means Harry Reid," says Frank O'Donnell, president of Clean Air Watch.

One member Reid will have to rein in is the newly minted chair of the agriculture committee, Blanche Lincoln, a conservative Arkansas Democrat who's been a holdout on health-care reform. Ranking member Saxby Chambliss (R-Ga.)—who tells NEWSWEEK that Waxman-Markey was a "pretty horrible piece of legislation"—says Lincoln's positions on climate change run parallel to his. Boxer's legislation will build on Waxman-Markey, which Lincoln calls a "complete nonstarter." She's urging the Senate to move slowly. As chair of agriculture, she'll be under enormous pressure from the powerful farm lobby to dilute Waxman-Markey measures. Farmers worry about the costs that global-warming legislation may impose on their energy-intensive business. They successfully flexed their muscles in the House, achieving a series of last-minute compromises. They'll lobby actively for more generous offsets and will find an ally in Lincoln, a staunch defender of crop subsidies. Lincoln's reelection campaign next year in manufacturing-heavy Arkansas will further dampen her support for comprehensive legislation. She's in a tight race, and if the bill is pushed further into 2010—and closer to Election Day—she'll shy away from any bold moves to regulate greenhouse gases. In a statement e-mailed to NEWSWEEK, Lincoln said she wants to lower carbon emissions but that "I remain concerned that indirect costs from a cap-and-trade system may outweigh the benefits."

Lincoln is one of several Democrats who would prefer to see the legislation broken up so that renewable-energy measures—which are likely to receive broad support—could be taken up separately from cap-and-trade, the controversial centerpiece of Waxman-Markey. Hill insiders say that approach is unlikely. "Cutting this bill up into different pieces would be very problematic," one Democratic staffer tells NEWSWEEK, saying that talk of such a strategy "utterly fails to take into consideration the continued Republican obstructionist tactics." The Democratic leadership seems to agree.

According to Senate aides, Reid was prepared to divvy up the bill earlier in the year, but after watching Republicans operate over the interceding months, he's come to believe that they won't give on any issues—not even renewable energy. If Democrats face a punishing fight on both portions of the bill, then it's better to go into battle just once. Moderate Democrats who support the energy piece but waver on cap-and-trade will have to eat their vegetables with their candy. "The only way we are going to get it done is package it all together," says Manley, who notes that Reid has Boxer's and Kerry's support on this strategy.

For their part, a group of Republicans are working quietly behind the scenes to broker an agreement with Sen. Joe Lieberman, who championed climate-change legislation in 2007. Lieberman has been meeting with John McCain, Lindsey Graham, George Voinovich, Richard Burr, and Lisa Murkowski to work out a deal. Any compact reached would likely rely heavily on nuclear power to lower emissions. McCain recently told an energy lobbyist that his support for legislation hinges on the inclusion of significant encouragement for nuclear power, sources tell NEWSWEEK. Chambliss thinks that Murkowski, the ranking member on the energy committee, will play a pivotal role. "But that is not to indicate that she is going to be on the side of Boxer-Kerry legislation. I don't think she is going to be anywhere near there," he says. He imagines her working with Bingaman and other "middle of the road," "realistic" Democrats to fashion legislation.

Any deal will also have to mollify Democrats representing coal and manufacturing states. That might prove an equally tough slog. Rust Belt Democrats can sound an awful lot like Republicans when it comes to climate change. In August, 10 of them —Sherrod Brown (Ohio), Debbie Stabenow (Mich.), Russ Feingold (Wis.), Carl Levin (Mich.), Evan Bayh (Ind.), Bob Casey (Pa.), Robert Byrd (W.Va.), Arlen Specter (Pa.), Jay Rockefeller (W.Va.), and Al Franken (Minn.)—wrote to Obama detailing their opposition to any climate bill that displaces American workers. They're concerned about the impact that legislation could have on the international manufacturing competitiveness of their states. Five of those same senators declared last year that they would have voted against Lieberman's 2007 bill had it reached the floor.

Looming behind the Senate's wrangling is the specter of EPA regulation of greenhouse gases under the Clean Air Act. That would place a cap-and-trade regime squarely in the hands of the Obama administration and EPA Administrator Lisa Jackson. It's not a fait accompli; Clean Air Watch's O'Donnell notes that "the practical reality is that any rule EPA puts out is going to be sued" by industry, time and again, stymieing its influence. Still, EPA regulation is anathema to Republicans. They'd prefer congressional action. But make no mistake—they're in no hurry to see that either.