A Bump in The Road Toward Getting America Back To Work

Posted on October 12, 2011 by Jeffrey B. Mullan

Last night, the United States Senate voted to reject President Obama’s $447 billion jobs plan. Recall that the bill, filed by the President on September 12 and styled the “American Jobs Act of 2011”, includes a mix of tax cuts, extensions of expiring jobless benefits, and new spending on infrastructure – including roads, railways and schools. The bill also includes an expansion of the discretionary TIGER grant programs, and the increasingly popular TIFIA loan program. Big picture, it was designed by the White House as its plan to keep the country out of a recession in the coming year.

Last week, the President stated that:

In Maine, there is a bridge that is in such bad shape that pieces of it were literally falling off the other day. And, meanwhile, we’ve got millions of laid-off construction workers who could right now be busy rebuilding roads, rebuilding bridges, rebuilding schools. This jobs bill gives them a chance to get back to work rebuilding America. Why wouldn’t we want that to happen? Why would you vote against that?”

While the President’s plan seems to be failing in the Congress, at least there is the beginning of a conversation about our infrastructure needs, and some signals that it may be reconsidered in piecemeal fashion. In late September, Chief Executive Officers from some of America’s largest corporations, including Doug Oberhelman of Caterpillar, Matthew Rose of BNSF Railway and Scott Davis of UPS, called for a renewed commitment toward infrastructure investment, writing:

Our transportation infrastructure has become inadequate to meet the needs of the 21st Century economy. We must prioritize and invest in our aging infrastructure now if we are to maintain our economic competitiveness and leadership in the global economy."

Attention to the issue is past due. As just one reason why, last month the Texas Transportation Institute released a report in which it estimated that urban road congestion made U.S. drivers buy 1.9 billion gallons of extra fuel in 2010 and caused them to pay an extra $101 billion in total costs.

While the conversation is overdue, it may also be familiar to long-time observers. In 1982, when America was also in a recession, Ronald Reagan found a way to support an increase in the Federal gas tax from 4 cents per gallon to 9 cents per gallon (now at 18.4 cents) – noting in his address to the nation on November 27, 1982 that it wasn’t really a tax but a fee that would cost the average user about $30 per year, that “America cannot afford throwaway roads or disposable transit systems”, and that “we simply cannot allow this magnificent system to deteriorate beyond repair.”

Proving, once again, that the issues don’t go away if we fail to pay attention to them.

 

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Obama Budget Proposal Includes Revenue From Auctioning 100% of CO2 Allowances Under a Cap and Trade Plan

Posted on February 26, 2009 by Amy Boyd
In the budget proposal that President Obama will send to Congress today, the administration has included revenue from auctions of 100% of allowances that will be issued as part of   an economy-wide, mandatory cap-and-trade program. It's a lot of money and the administration has big plans for it. 
 
As highlighted in the President's joint address to Congress on Tuesday night, the cap-and-trade program is expected to bring in billions of dollars per year.  Today's budget proposal adds the detail that the President intends to direct $15 billion per year from these funds towards renewable and alternative sources of energy such as wind and solar, and wants the money to start flowing in fiscal year 2012.  It's also the first time that the President has called for a 100%, economy-wide auction.
 
The budget proposal also includes specifics on the caps the President wishes to see -- a somewhat odd place to introduce his proposal for legislation that reduces greenhouse gas emissions 14% below 2005 levels by 2020 and 83% below 2005 levels by 2050.  
 
It may be that the President's approach is intentional.  If the proposal were accepted, it would form the fiscal year 2010 budget resolution, a bill that only needs a simple majority to pass. The budget resolution is nonbinding, but still sends a strong statement on the legislative priorities it funds. If Congress were to then pass a law known as a budget reconciliation, it would require key House and Senate committees to pass a climate bill which accounts for the budget resolution's projections on cap-and-trade funding.  This strategy, too, would need only a simple majority, as budget reconciliation bills cannot be filibustered in the Senate.  With such a tactic, cap-and-trade advocates would not need to cross the 60-vote threshold that is viewed as a hurdle to passage of other cap-and-trade legislation.
 
This tactic is not new:  four years ago, the Republican majority attempted to open up the Arctic National Wildlife Refuge to oil drilling through the budget reconciliation process, a move that failed in the House when moderate Republicans joined with Democrats to oppose the bill on other grounds. 
 
Whether this is actually what the President has in mind is not yet clear.  However, regardless of the administration's ultimate strategy for enacting a cap and trade program, the budget lays down a very large marker on the side of auctioning 100% of allowances. 
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