Passage of climate-change bill emerges from heavy weather in wheeling, dealing

WASHINGTON —

As the most ambitious energy and climate-change legislation ever introduced in Congress made its way to a floor vote last Friday, it grew fat with compromises, carve-outs, concessions and out-and-out gifts designed to win the votes of wavering lawmakers and the support of powerful industries.

The dealmaking continued right up until the final minutes, with its co-author, Rep. Henry Waxman, D-Calif., doling out billions of dollars in promises on the House floor to secure the final votes needed for passage.

The bill was freighted with hundreds of pages of special-interest favors, even as environmentalists lamented that its greenhouse-gas-reduction targets had been whittled down.

Some of the prizes were relatively small, like the $50 million hurricane-research center for a freshman lawmaker from Florida.

Others were huge and threatened to undermine the environmental goals of the bill, like a series of compromises reached with rural and farm-state members that would funnel billions of dollars in payments to agriculture and forestry interests.

Automakers, steel companies, natural-gas drillers, refiners, universities and real-estate agents all got in on the fast-moving action.

Yet the biggest concessions went to utilities, which wanted assurances that they could continue to operate and build coal-burning power plants without shouldering new costs. The utilities received not only tens of billions of dollars' worth of free pollution permits but also billions for work on technology to capture carbon-dioxide emissions from coal combustion to help meet future pollution targets.

Coal-dependent breaks

That deal, negotiated by Rep. Rick Boucher, a conservative Democrat from Virginia's coal country, won the support of the Edison Electric Institute, the utility industry lobby, and lawmakers from regions dependent on coal for electricity.

Liberal Democrats got a piece, too. Rep. Bobby Rush, D-Ill., withheld his support for the bill until a last-minute accord was struck to provide nearly $1 billion for energy-related jobs and job training for low-income workers and new subsidies for making public housing more energy-efficient.

Rep. Joe Barton, R-Texas, who is staunchly opposed to the bill, marveled at the deal-cutting on Friday. "It is unprecedented," Barton said, "but at least it's transparent."

Waxman defended the dealmaking as necessary to address a problem that affected every region and every industry. "We worked hard to craft compromises that addressed the legitimate concerns of industry without undermining the environmental integrity of the legislation," Waxman said. "Tackling hard issues that have been ignored for years is never easy."

In its odyssey from introduction in late March to House passage, the climate-change bill sponsored by Waxman and Rep. Edward Markey, D-Mass., grew from 648 pages to more than 1,400 pages.

Although watered down from the original vision, it was still the first time either house of Congress passed a bill imposing a limit on the emissions blamed for the warming of the planet. The legislation awaits action in the Senate.

Despite all the concessions, President Obama worked hard for the bill and called it an extraordinary step for the nation. He said in an interview Sunday that the compromises had been necessary to moderate the different impacts of greenhouse-gas controls on different parts of the country.

"I think that finding the right balance between providing new incentives to businesses, but not giving away the store, is always an art; it's not a science because it's never precise," Obama said.

One of the major changes in the bill came early at the insistence of Democrats from Southeastern states, including Reps. John Barrow of Georgia, G.K. Butterfield of North Carolina and Bart Gordon of Tennessee. Prodded by utilities in the region, they pressed for a weakening of the national mandate for renewable energy.

The original bill called for all utilities to secure 25 percent of their electricity from renewable sources like wind, solar, hydro and geothermal energy by 2025.

This was seen as either impossible or enormously expensive in the Southeast, which does not have abundant supplies of such energy. The standard was weakened to 15 percent by 2020, with states given the ability to reduce it further if they cannot meet the target. That helped win Gordon and Butterfield's votes. Barrow voted no.

The bill's centerpiece is a cap-and-trade program that sets a ceiling on greenhouse-gas emissions and allows polluting industries to trade emission permits or allowances to meet it. Obama said during the presidential campaign that all of those permits should be sold at auction, but the bill's authors ended up giving away 85 percent for free at the outset of the program, which won votes but that some environmental advocates said undercut the bill's integrity.

Industries fought among themselves for a share of the permits. Oil refiners were frozen out at the beginning but called on lawmakers from refinery-rich districts to press their case.

Rep. Gene Green, a Democrat from near Houston, demanded 5 percent of the permit value, worth more than $3 billion a year, to help refiners deal with the costs of carbon controls. "Refineries are very energy-intensive," Green said. "They need a breather to adapt."

He got them 2 percent of the allowances.

The National Rural Electric Cooperative Association, a major supplier of power in the Farm Belt, was squeezed out by the big utilities and received none of the permits in the early negotiations. But ultimately the head of the group, former Rep. Glenn English, D-Okla., secured nearly $400 million in annual emissions permits to help the small co-ops.

With that deal done, some farm-state Democrats who had previously opposed the bill were willing to vote for it.

Toughest negotiations

Some of the toughest negotiations were between Waxman and Rep. Collin C. Peterson, D-Minn., a fierce defender of agricultural interests.

Peterson wrung numerous concessions on provisions opposed by agribusinesses and forestry companies. Several had to do with so-called offsets, which allow industrial polluters to meet emissions targets by buying carbon reductions from other sectors, particularly farms and forests, which actually take carbon dioxide out of the atmosphere.

Farms oust bogeyman

In the original bill, those offsets were to have been regulated by the Environmental Protection Agency, considered a bogeyman in the farm states. Peterson got oversight shifted to the farmer-friendly Department of Agriculture. He also broadened the list of activities that would qualify as offsets, bringing a potential windfall to farm interests.

His deal cut, Peterson threw his support behind the bill.

Rahm Emanuel, the White House chief of staff and a former Democratic leader in the House, said the president did not believe the compromises did it fatal harm.

"He loves this bill and lobbied hard for it," Emanuel said, "including the great, the good and the not-so-great provisions."