NDN Blog

Today, U.S. Rep. John Dingell, Chairman of the House Committee on Energy and Commerce (D-MI) and U.S. Rep. Rick Boucher (D-VA), Chairman of the House Subcommittee on Energy and Air Quality released a much anticipated 461 page discussion draft of their climate change legislation. From their statement to the members of the House Energy and Commerce Committee:

Politically, scientifically, legally, and morally, the question has been settled: regulation of greenhouse gasses in the United States in coming. We believe that elected and accountable representatives in the Congress, not the Executive Branch, should properly design that regulatory program. The only remaining question is what form that regulation will take.

Indeed, as we learned from the debate on Boxer-Lieberman-Warner in the Senate, the remaining question – what form the regulation will take – is the hardest one to answer. The Dingell-Boucher proposal is a welcome addition to the conversation that will occur in Congress next year.

With the economy in a recession, the political feasibility of passing climate legislation appears tougher now than just a few months ago. Maybe in a forum with presidential candidates, someone can ask a question about it. I believe there’s one coming up sometime soon….

Marc Ambinder over at the Atlantic does a good job summing up today's political messaging as it relates to the economy. In "Fannie, Freddie, or the Future," Ambinder argues that speaking about the future of the American economy is a better political strategy, and, that going for the gutter, as the McCain camp announced they were going to do, while politically enticing, might not be the best way to win (especially executed this poorly).

[Keating economics] successfully jammed up McCain's message of the day, which is that Obama is somehow to blame for the excesses of Fannie Mae and Freddie Mac. Blaming Democrats for Fannie and Freddie's collapse -- implicity, blaming the government for giving people home loans who couldn't afford -- isn't beanbag, but the McCain campaign is using it the way that Democrats used to respond to foreign policy questions: by stumbling around, latching on to a poll-tested response, and ignoring the bigger picture.

Ayers and Keating aside, the leading edge of this debate is about what do we do post-bailout to restore confidence in our economy. The public will rightly pressure both candidates for more answers. It's an opportunity for somebody to come up with a newer, global message. or at least sound like they get the international dimension of our meltdown.

Hitting back with the Keating Five was political necessity from the Obama camp, and as Ambinder writes, has worked today, but Obama's real strength in recent weeks has come on the back of his strong response to the financial crisis. The current narrative about Obama's calm reaction compared with McCain's erratic reaction, believeable because it reinforced preexisting memes about both candidates, will serve Obama well for the next month.

Now, as the Obama campaign launches its Keating Economics piece, Obama himself expands his message on the economy and hits McCain on trying to turn the page. Today in Asheville, North Carolina, Obama had this to say:

We are going to have to then move on an aggressive plan to deal with some of the underlying structural problems in the economy, including the continuing decline in the housing market. Now Senator McCain and I have a debate tomorrow night, and obviously the American people are going to be anxious to hear from one of the two people who’s going to be the next president and responsible for dealing with this economic mess, what their plans are.

As NDN has argued, that plan must include action from Congress and the President to do more to keep people in their homes. For more on NDN's reponse to the financial crisis, visit Keep People in Their Homes.

With news coming that the Senate has loaded up the bailout bill with a number of tax provisions, including an AMT patch and crucial tax credits for renewable energy, the House vote on the proposal, should it pass the Senate, looks to be a defining moment for pay-go.

Pay-go has been the largest stumbling block in extending renewable energy tax credits – a package so popular that it recently passed the Senate with a vote of 93 to 2. Now, a bipartisan agreement by Leaders Reid and McConnell to include these provisions in the bailout bill, which is predicted to pass the Senate tonight, will only be derailed if some in the House continue to insist on pay-go.

NDN has long argued that pay-go creates far too much arbitrary, artificial rigidity in the legislative and governing processes, and this bailout serves as a perfect example. Should a bipartisan bill designed to rescue the economy on the order of $700 billion fail due to a pay-go fight over far less costly tax provisions that are partially offset, the legacy of pay-go, a provision that doubtless has limited life to it anyway, will go from murky to downright laughable.

As the economy slides into recession, one can only hope that the popularity and job creation benefits of the tax credits, especially those for renewable energy, will garner enough votes to more than offset the votes lost from pay-go proponents.

Last week, NDN Fellow and Green Project Director Michael Moynihan released an essay calling for an investment in new, clean infrastructure. Clean infrastructure investment, which includes electricity grid modernization, public transportation, renewable energy and efficiency, and a variety of other ideas, is crucial in both ensuring near-term economic growth and long-term prosperity, as we create a low-carbon economy.

Saturday in the New York Times, Thomas Friedman issued a similar call, arguing to "Green the Bailout."

The point is, we don’t just need a bailout. We need a buildup. We need to get back to making stuff, based on real engineering not just financial engineering. We need to get back to a world where people are able to realize the American Dream — a house with a yard — because they have built something with their hands, not because they got a "liar loan" from an underregulated bank with no money down and nothing to pay for two years. The American Dream is an aspiration, not an entitlement.
…

Indeed, when this bailout is over, we need the next president — this one is wasted — to launch an E.T., energy technology, revolution with the same urgency as this bailout. Otherwise, all we will have done is bought ourselves a respite, but not a future. The exciting thing about the energy technology revolution is that it spans the whole economy — from green-collar construction jobs to high-tech solar panel designing jobs. It could lift so many boats.

A national agenda focused on investing in new, clean infrastructure has the potential to begin to pull America out of the current economic downturn, enhance energy security, confront climate change, and ensure future prosperity through the creation of dynamic new 21st century, low-carbon economy. Stay tuned to the Green Project’s work on clean infrastructure moving forward.

For well over a week, NDN has been offering its thoughts on the causes, effects, and proposals in the financial meltdown. Yesterday, Simon Rosenberg and Dr. Robert Shapiro released an essay encouraging the federal government to keep people in their homes and stabilize the housing sector. U.S. Sen. Barack Obama has been doing the same, meeting with top economists, outlining his principles, and working to ensure that this financial bailout actually helps everyday Americans.

Meanwhile, U.S. Sen. John McCain, has, in the words of George Will, "substituted vehemence for coherence," for the last week, calling for the head of SEC Chairman Chris Cox, demanding regulation he used to crusade against, and otherwise misunderstanding the complex levers that drive America’s financial sector.

Today, following an 8:30 am call from Obama and some very, very bad public polling, McCain snapped, and decided that the financial crisis was in fact worthy of a significant reaction. McCain’s chosen reaction, leaving the campaign trail to return to the scene of the deregulation and try his hand at crafting legislation that accomplishes the opposite of what he has stood for his entire political career, is the easy way out. It is designed to do one thing: place Obama in an awkward position. One must not confuse this – campaign tactics – for what McCain wants people to think it is – leadership.

So, instead of campaign trail theatrics and huff-and-puff returns to Washington, let’s have a debate on Friday. But, instead of talking about foreign policy, let’s talk about the financial meltdown and the future of the American economy. An unprecedented number of Americans think the country is headed in the wrong direction, and they are looking for those who would lead to demonstrate that they have a plan to put the nation back on track. These two Senators are running for President amidst the greatest economic turmoil in a very long time. The American people deserve a debate.

UPDATE: From Obama, courtesy of Politico.com's Ben Smith:

It’s my belief that this is exactly the time the American people need to hear from the person who in approximately 40 days will be responsible with dealing with this mess.
...

Presidents are going to have to deal with more than one thing at a time. It's not necessary for us to think that we can do only one thing, and suspend everything else.

Last night, the U.S. Senate passed tax credits for renewable energy, including extending crucial tax credits for solar and wind energy. NDN congratulates the Senate for mustering overwhelming bipartisan support for this legislation, and encourages the House to follow suit and deliver this legislation to the President's desk as soon as possible.

WASHINGTON (Reuters) - The U.S. Senate Tuesday approved a package to extend $18 billion in tax credits for using renewable energy sources like wind, solar and geothermal and also provide incentives to cut energy consumption.

The move, which alternative energy companies had been lobbying for all year, sent shares of solar power companies higher in after-hours trade. The delay in extending the tax credits had been a major damper on those stocks this year. The Senate was seen as the biggest roadblock after it shot down the extension eight times this year.

"Getting past what has been largely the deal-breaker in the past should be positive," Wedbush Morgan analyst Al Kaschalk said of the impact the vote would have on solar stocks.

Under the proposal, which will be part of a much bigger tax bill, the tax credit for producing electricity from wind would be extended for one year. The credit for other renewable sources, such as wave and ocean tide projects that generate power, would be extended for two years.

The residential and business tax breaks for solar energy would be extended for eight years.

"Solar is the winner here," Raymond James alternative energy analyst Pavel Molchanov said.

For more on the importance of solar energy to the American economy, read Solar Energy: The Case for Action, an extensive report released in August by NDN Green Project Director Michael Moynihan.

This weekend, it became apparent that no one is really buying U.S. Sen. John McCain's plentiful promises about cracking down on Wall Street. U.S. Sen. Barack Obama has taken to calling McCain the "Great Deregulator," which is fundamentally true, from both McCain's record on financial regulation and his designs on health care and social security.

Sam Donaldson, this morning on ABC's This Week, pointed out that Obama's ads are, in fact, correct to point the finger in the direction of McCain and his cronies on deregulation: 

Also on This Week, conservative commentator George Will hammered John McCain for not acting presidential this last week. Take a look:

Through this financial crisis, America better learned what one could expect out of a McCain White House. As Will later pointed out, McCain "showed his personality this week, and it made some of us fearful." In substituting vehemence and bluster for coherence, reason, substance, and economic literacy, John McCain has again shown that his temperament disqualifies him for the presidency. His instincts in the face of turmoil are troubling: imagine a foreign policy crisis to which he reacts with bluster instead of coherence.

Obama, on the otherhand, is making the right moves: acting presidential by consulting knowledgeable advisors, outlining his principles, and calling, like NDN, to keep Americans in their homes. And the American people have noticed. See Simon's blog on Obama hitting 50 in the daily tracks. 

U.S. Sen. Barack Obama, in Española, New Mexico today, gave a speech on the economy and called for the passage of a plan that would help struggling families stay in their homes. NDN President Simon Rosenberg and NDN Globalization Initiative Chair Dr. Robert J. Shapiro called yesterday for just such an action. NDN applauds Senator Obama for his bold plan to address the underlying factors in the financial crisis and his strong understanding of both the moral and economic cases for keeping struggling Americans in their homes.

From Obama’s speech today:

The events of the past few days have made clear that we need to do more right now. We do not have time for commissions and we can’t afford to lurch back and forth between positions when dealing with an economic crisis, like my opponent has. That is why I am calling on the Treasury and the Federal Reserve to use their emergency authorities to maintain the flow of credit, to support the availability of mortgages, and to ensure that our financial system is well-capitalized. Tomorrow I will be convening a meeting with my top economic advisors to discuss a plan based on the ideas I’ve been talking about with former Fed Chairman Paul Volcker and other advisors of mine. Then I’ll call for the passage of a Homeowner and Financial Support Act that would establish a more stable and permanent solution than the daily improvisations that have characterized policy-making over the last year. Specifically, it would accomplish three primary goals.

First, it will provide capital to the financial system. Second, it will provide liquidity to enable our financial markets to function. And third, it will do what I’ve been calling for since I supported legislation on it early last spring, which is to get serious about helping struggling families to re-structure their mortgages on more affordable terms so they can stay in their homes. We’ve made a good start but we need to do much, much more. We cannot forget that there are many homeowners who are in crisis through no fault of their own, and a solution that does not have them at its core is no solution at all.

It appears that an agreement has been reached in the Senate on an extenders package that includes the tax credits for renewable energy.

From the Senate Finance Committee's statement:

BAUCUS, GRASSLEY, SENATE LEADERS AGREE TO MOVE CLEAN ENERGY INCENTIVES, EXTEND EXPIRING TAX CUTS, OFFER DISASTER TAX RELIEF,
PROTECT MILLIONS FROM ALTERNATIVE MINIMUM TAX

Deal combines Finance leaders’ key energy priorities with top tax issues for 110th Congress

Washington, DC – Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) today announced an agreement with the Senate’s Democratic and Republican leadership to move legislation accomplishing the Finance panel’s remaining major objectives for the year: passage of clean energy tax incentives, the protection of millions of Americans from the alternative minimum tax (AMT), and extensions of expiring family and business tax cuts.  Last week, Baucus and Grassley unveiled a $40 billion package of clean energy tax incentives for Senate consideration this month.  Today, the Finance leaders combined key objectives of that legislation with an agreement to update alternative minimum tax rules and continue tax cuts for college tuition, state and local sales taxes, and research and development for U.S. businesses.  Senators should vote this week on amendments to replace the current text of H.R. 6049, energy tax legislation approved in the House of Representatives earlier this year.

More on the agreement here. 

U.S. Sen. John McCain’s new ad on the economy is interesting mostly because of its frighteningly weak economic fundamentals. It is similarly weak on truth – nothing new from the McCain camp, but these lies, some recycled and some fresh out of wherever they come up with this stuff, come in the policy field and not, as most of the others have been, in the personal.

The ad is called "Crisis." Take a look:

The ad promises three actions the McCain campaign would deliver on to improve the economy. The first is "Tougher rules on Wall Street." The credibility of this promise is low, as it comes from a campaign advised by Phil Gramm, who authored much of the deregulation of Wall Street that got us here to begin with, and from a man who, as the New York Times points out, "has consistently characterized himself as fundamentally a deregulator and he has no history prior to the presidential campaign of advocating steps to tighten standards on investment firms."

The second promise is "Lower taxes to create new jobs." Now, John McCain probably honestly believes that lower taxes do create new jobs, and, functioning under the rule of Costanza, "It's not a lie, if you believe it," then perhaps McCain is not a liar. Under any other standard, however, the cause – effect relationship he posits between lower taxes and new jobs simply isn't true. One doesn't need to look into ancient economic history for proof: Under the Bush administration’s tax cuts, job growth has been far, far slower than the Clinton years of relatively higher taxes.

Finally, McCain promises, "Offshore drilling to reduce gas prices." Things get especially un-truthy for the senior Senator from Arizona here. Granting expanded leases for offshore drilling will not provide a meaningful reduction in gas prices for Americans any time soon. Period. That’s it. This flat out lie has been debunked time and time again, but McCain continues to present a cause and effect relationship that just is not true as a central plank in the rationale for his presidency. Hopefully someone asks him about it soon. (For example, in a presidential debate in 10 days.)

The lies the McCain campaign has been throwing around about everything from kindergarten, to pigs, to pigs in kindergarten have certainly caught the media's attention. But isn’t lying to the American people about what one's governing agenda will do for them even worse?