Category: Uncategorized

Another Incumbent Goes Down

Posted on by The Progressive Policy Institute

There were two House elections of note earlier this week. The one which earned national attention was in West Virginia, where ethics-challenged Rep. Alan Mollohan (D), who had served 14 terms in office, was beaten decisively by Democratic primary opponent state senator Mike Oliverio. The winner styles himself as a conservative Democrat, but given Mollohan’s own relatively conservative record, it’s likely the result had less to do with ideology than with serial investigations of the incumbent for alleged conflicts of interest associated with his chairmanship of an appropriations subcommittee. This seat has been targeted by Republicans, and Oliverio may be harder to beat than a wounded Mollohan.

Down in Georgia, a special election was held to replace Republican Rep. Nathan Deal, who resigned his seat to “concentrate” on his gubernatorial races; Deal was also being investigated and criticized by the Ethics Committee for alleged interference with a state grant program that benefitted his own business. In the heavily Republican mountain district, the big issue was strong Tea Party and Club for Growth backing for former state Rep. Tom Graves, who finished first with 35 percent of the vote, but will face a June 8 runoff with a more conventional Republican, former state senator Lee Hawkins, who gained 23 percent of the vote. Graves will be favored in the runoff, but will have to run for a full term beginning with a primary on July 8.

Next Tuesday primaries will be held in Arkansas, Kentucky, Oregon and Pennsylvania. In Arkansas, Sen. Blanche Lincoln (D) is in a close primary battle with Lt. Gov. Bill Halter; there are competitive primaries in both parties for a Senate seat in Kentucky; Oregon will feature a comeback bid by former Gov. John Kitzhaber; and in Pennsylvania, Arlen Specter is in serious trouble from a challenge by Joe Sestak. I’ll have more about those races on Tuesday morning.

Poll Watch

Polling news includes a very interesting Mason-Dixon survey of the Republican Senate primary race in Nevada. When asked if the “Chickens For Checkups” controversy involving longtime frontrunner Sue Lowden affected their likely vote, Nevada Republicans generally said it would not. But for no other apparent reason, Lowden’s support has dropped significantly since the last Mason-Dixon poll in April, and she’s now locked in a competitive three-way race in which Tea Party favorite Sharron Angle has suddenly leapt into second place. The poll gave Lowden 30 percent, Angle 25 percent, and Danny Tarkanian 22 percent. The primary is on June 8, and the winner will face Harry Reid.

A new Rasmussen survey in New Hampshire shows Republican former Attorney General Kelly Ayotte continuing to hold a solid (50/38) lead over Democratic Rep. Paul Hodes for the seat held by retiring Sen. Judd Gregg. A DKos/R2K poll in Kentucky suggests that Democrats Dan Mongiardo and Jack Conway are in a dead heat, while on the GOP side, Rand Paul holds a 10-point lead over Trey Grayson.

Yet another poll in Pennsylvania, this one from Suffolk, shows Joe Sestak pulling ahead of Arlen Specter (49/40). And a PPP survey of Republicans to measure early support for prospective 2012 presidential candidates places no fewer than four candidates (Mike Huckabee with 25 percent; Mitt Romney with 23 percent; Newt Gingrich with 21 percent, and Sarah Palin with 20 percent) in a virtual dead heat.

Ed Kilgore’s PPI Political Memo runs every Tuesday and Friday.

Earning Green Cards Through Diplomas

Posted on by The Progressive Policy Institute

The recent re-emergence of immigration on the national agenda, not to mention our slow recovery from an economic slump, has illuminated an underappreciated but serious flaw in U.S. immigration policy: It is fundamentally misaligned with the needs of America’s economy.

Our current policy does little to prevent an influx of undocumented workers across our southern border, or to raise the education levels of those who are already here. It admits legal immigrants mostly on the basis of unifying extended families, rather than the skills they bring. The U.S. in recent years has admitted roughly one million legal entrants per year. Of these, about two-thirds are admitted based on family ties, while 16 percent come in for employment-related reasons. Programs targeted at skilled migrants let in only about 180,000 people each year. Our immigration policy, in short, lowers the overall skill level in the U.S.

It is time we looked at immigration reform through the prism of human capital development. America’s ability to compete globally increasingly depends on skilled workers and ceaseless innovation. Two policies in particular will help us re-orient our immigration posture.

First, we need to make it easier for foreign students who receive advanced degrees from U.S. institutions in science, technology, engineering and math (STEM) to stay in the U.S. and join the workforce. Our current immigration system makes it unnecessarily difficult for STEM advanced-degree graduates who are here legally to gain employment. Those students have to compete with foreign-educated and more experienced workers for the 65,000 H1-B visas and 80,000 priority worker and advanced-degree green cards issued every year. We need to change immigration law so those students have a chance to earn a green card with their diploma.

But they are not the only students whose potential we are squandering with an outmoded immigration system. Every year up to 65,000 children of undocumented immigrants graduate high school. While it’s not illegal for them to attend college, universities and colleges have given new scrutiny to immigration status in the wake of 9/11, which has had a chilling effect on undocumented immigrants’ enrollment. It’s in our economic interest to encourage these kids to get a college education. Enacting a policy that would give them a path to citizenship through college education and national service can only strengthen the country.

Rewarding Achievement in Science and Math

First, we should enact policies that make it easier for motivated, capable young immigrants to establish U.S. citizenship. Attaching a green card — granting lawful permanent residence — to every foreign student’s post-graduate STEM degree diploma is one such policy.

Currently foreign students are allowed 12 months of practical training after completing their studies. Under a Department of Homeland Security interim ruling issued in 2008, foreign students with STEM degrees can extend that out to just over two years (29 months). However, students cannot have more than 90 days of unemployment during this time. Once their visa expires, they have to leave the U.S., taking their education and skills with them.

But the average unemployment stint is 130 days, and in this recession, over 200 days — more than twice the official limit. The rule means that students in technically intensive degrees are being turned away after valuable education capital has been invested in them. By attaching a green card to a STEM advanced degree, hardworking and high-achieving foreign students won’t have to leave the U.S. to apply their skills and find good work. From the U.S.’s perspective, it would get to keep bright and industrious workers who can add the most value to our economy.

The government should also exempt green-card recipients who hold advanced STEM degrees from green card caps currently in place. Advanced-degree holders currently face a five-year wait to get a green card. By exempting them from that cap, we can keep valuable human capital here.

Not everyone is on board with this idea. Critics have argued against policies that would encourage foreign students to enter STEM graduate programs in the U.S. They contend that providing further incentives for foreign students will accelerate the crowding out of U.S. students — particularly minorities — and workers in the STEM fields.

But such skeptics ignore the considerable benefits of a vigorous STEM/green card policy. The open flow of knowledge and talented researchers has long helped keep the U.S. at the forefront of science and technology. According to a National Academies report:

The participation of international graduate students and postdoctoral scholars is an important part of the research enterprise of the United States. In some fields they make up more than half the population of graduate students and postdoctoral scholars. If their presence were substantially diminished, important research and teaching activities in academe, industry, and federal laboratories would be curtailed, particularly if universities did not give more attention to recruiting and retaining domestic students.

Unleashing the innovative and entrepreneurial energies of our best students — be they American or foreign-born — will be key to America’s resurgence. Stapling a green card to the diplomas of foreign STEM advanced-degree holders is one concrete policy step we can take to ensure that outcome.

A Pathway for Children of Immigrants

The same opportunity to become integrated and contribute to American society should be given to those who came to the U.S. as children with their undocumented parents. This may strike some as controversial, but it’s common sense. When an adult comes into the U.S. illegally, he or she is exercising a choice and is responsible for its consequences. That’s not true of the child who follows his or her parent across the border. A child should not have to suffer severe legal and economic limitations for the simple act of following a parent’s decision.

Yet that’s exactly what happens under the current system. Right now, the children of undocumented immigrants are stuck: As they grow up and go to school, they become more and more American. Yet this country gives them no pathway to legal residency or citizenship. This is bad not just for them, but also for our nation. We are consigning thousands of people to uncertain limbo status, with little hope for full membership in our society. But we are also depriving ourselves of the opportunity to benefit from their energy, ideas, talents and engagement in our national life.

We can tackle this problem by offering an expedited pathway to citizenship for young undocumented immigrants who go to college or engage in meaningful national service. This idea has been floated as part of the Development, Relief and Education for Alien Minors (DREAM) Act. The measure would grant conditional permanent-resident status to undocumented immigrants who entered the U.S. before their 16th birthday, lived here for at least five years, are of good moral character and either graduated from high school or attained admission to college.

Opponents of this initiative complain that giving permanent-resident status to children of undocumented immigrants will be just a backdoor way for their parents to document themselves and live legally in the U.S. But those objections don’t stand up to scrutiny. Permanent residents can only petition for spouses and unmarried children, not parents or siblings. Citizens can petition for siblings or parents, but if that relative has been living in the U.S. illegally for more than a year, they may not re-enter the U.S. for 10 years.

It’s also worth noting that comprehensive immigration reform will likely result in some undocumented families having to leave the U.S. For those who meet the conditions to stay, it’s in our economic interest to encourage their kids to get a college education.

Estimates of the number of young people who would become eligible for legal residency under the Dream Act vary widely. The Migration Policy Institute has estimated (PDF) that 360,000 unauthorized immigrants would become immediately eligible, with perhaps another 715,000 who might become so if they make it through high school and meet the other requirements.

Supporters of this idea should be open to some changes in order to not only win passage but also strengthen the benefits from the proposal. For example, if the only way to get the initiative through Congress is to extend the academic requirement for full permanent-resident status from two years of college to four, that’s better than seeing the whole thing go down to defeat, as what happened with the Dream Act.

A broader definition of national service can also win additional votes. Let’s expand the service requirement beyond military experience. An undocumented youth might satisfy the service provision by teaching in low-income schools, tutoring in an adult-literacy program, helping to maintain our national parks, serving in the Peace Corps, or enlisting in a service program established by one of the states.

A Pragmatic Course

America’s immigration policy is badly broken and requires fixes that go far beyond what we have proposed here. We need sweeping reform that dramatically reduces illegal immigration by enforcing laws in the workplace; that ties legalization to workplace verification of identity and legal status; that enlarges the pipeline for legal immigrants, particularly those with high skills; and that engages Mexico in cooperative efforts to curb the flow of guns and people across the border and confront the scourge of narco-terrorism.

A progressive blueprint for reform must also bring our anachronistic immigration laws into closer alignment with America’s economic needs. America can only hold onto its high living standards by competing on the basis of high-value goods and services. Because rapid innovation is key to U.S. comparative advantage, we need immigration policies that attract more educated and skill workers to our shores.

Immigration reform must tilt our laws toward skills. We could achieve this by increasing the number of permanent visas to skilled workers; by replacing per-country limits — which effectively cap skilled entrants from large countries like China and India — with an overall limit; and by limiting family-sponsored preferences to nuclear rather than extended family members.

And we must take the two steps proposed here: stapling a green card to diplomas awarded to foreign students who graduate with advanced STEM degrees from U.S. universities, and offering legal status to qualified children of undocumented immigrants who get a college degree. Offering a pathway to citizenship to high-achieving immigrants doesn’t just reward talent and diligence — it will lay the groundwork for America’s resurgence in the 21st century.

Kagan’s Alleged Distance From the “Mainstream”

Posted on by The Progressive Policy Institute

In their efforts to find something objectionable about Supreme Court nominee Elena Kagan, some conservatives are resorting to an argument that is so vague as to seem innocuous, but that is also consonant with a serious strain of invidious prejudice: as a lifelong New Yorker, she’s inhabited a liberal “cocoon” that is remote from the mainstream life of most Americans. Kathleen Parker offered a particularly explicit version of this argument in a Washington Post column the other day. Here’s a sample:

Certainly New York City dwellers would argue that they struggle with ordinary concerns, just in a more dense environment. But New York, like other urban areas, tends to be more liberal than the vast rest of the country. More than half the country also happens to be Protestant, yet with Kagan, the court will feature three Jews, six Catholics and nary a Protestant. Fewer than one-fourth of Americans are Catholic, and 1.7 percent are Jewish.

This claim that Kagan’s nomination violates some unwritten rules of geographical and ethnic balance on the Supreme Court is spreading pretty rapidly. I did a fairly systematic response over at FiveThirtyEight, noting that (1) this wouldn’t be first time the Court might had three New Yorkers; (2) life in New York isn’t exactly the liberal cocoon that conservatives so often describe it as; and (3) geographical background or even diversity of experience has not in the past been a particularly good predictor of judicial philosophy or contributions to the Court.

If Parker’s argument and many like it strike you as risking encouragement to some very old prejudices, you should check out my response.

This item is cross-posted at The Democratic Strategist.

Photo credit: https://www.flickr.com/photos/hlrecord/ / CC BY 2.0

Gates and Fiscal Responsibility (Again)

Posted on by The Progressive Policy Institute

This past weekend Secretary of Defense Bob Gates continued to talk his Kansas brand of sense about Pentagon spending. After a lecture on shipbuilding last week at the Navy League teed up tough questions to the Navy — like whether we can continue to afford $7 billion submarines — Gates took to the Eisenhower Library in his home state to expand that theme across his entire department. I’d bet you a crisp $20 bill that this is the line that caused an audible gasp in Reston and on the Hill:

The Defense Department must take a hard look at every aspect of how it is organized, staffed, and operated – indeed, every aspect of how it does business. In each instance we must ask: First, is this respectful of the American taxpayer at a time of economic and fiscal duress? And second, is this activity or arrangement the best use of limited dollars, given the pressing needs to take care of our people, win the wars we are in, and invest in the capabilities necessary to deal with the most likely and lethal future threats?

As a starting point, no real progress toward savings will be possible without reforming our budgeting practices and assumptions. Too often budgets are divied up and doled out every year as a straight line projection of what was spent the year before. Very rarely is the activity funded in these areas ever fundamentally re-examined – either in terms of quantity, type, or whether it should be conducted at all. That needs to change.

But then again, maybe the shock value has worn off — fiscal responsibility has been such a theme under Gates’ leadership that perhaps tough-minded rhetoric on defense spending now comes with little surprise.

Then Gates delved into specifics. And now it was the soldiers’, sailors’, airmen’s, and marines’ turn to get nervous:

[H]ealth-care costs are eating the Defense Department alive, rising from $19 billion a decade ago to roughly $50 billion – roughly the entire foreign affairs and assistance budget of the State Department. The premiums for TRICARE, the military health insurance program, have not risen since the program was founded more than a decade ago. Many working age military retirees – who are earning full-time salaries on top of their full military pensions – are opting for TRICARE even though they could get health coverage through their employer, with the taxpayer picking up most of the tab. In recent years the Department has attempted modest increases in premiums and co-pays to help bring costs under control, but has been met with a furious response from the Congress and veterans groups. The proposals routinely die an ignominious death on Capitol Hill.

The resistance to dealing with TRICARE stems from an admirable sentiment: to take good care of our troops, their families, and veterans – especially those who have sacrificed and suffered on the battlefield. This same sentiment motivates the Congress routinely to add an extra half percent to the pay raise that the Department requests each year. Furthermore, the all-volunteer force, which has been a brilliant success in terms of performance, is a group that is older, more likely to have spouses and children, and thus far costlier to recruit, retain, house, and care for than the Eisenhower-era military that relied on the draft of young single men to fill out its ranks.

Those are the political and demographic realities we face. To a certain extent they limit what can be saved and where. But as a matter of principle and political reality, the Department of Defense cannot go to the America’s elected representatives and ask for increases each year unless we have done everything possible to make every dollar count. Unless there is real reform in the way this department does its business and spends taxpayer dollars.

Two quick points here.

First, America’s armed personnel and their families represent an important political constituency. No administration wants the baggage that comes with reducing benefits for America’s fighting men and women. For the time being, that includes this one. If a serious restructuring of military pay and benefits ever occurs, it would likely be in about year six or seven of the Obama administration, safely after reelection.

Even then, it might prove impossible as Congress continues to feed the beast of fiscal irresponsibility. News broke just today that the Hill is about to vote on a 1.9 percent military pay raise. Guess what? That’s a half-percent more than the Pentagon recommended.

Second, in my mind, the structure of the benefits isn’t the problem. It’s the amount of care. I wrote a paper last year called “The Pentagon’s Most Expensive Weapon,” and I concluded that once you add up all outlays — including costs associated with the Department of Veterans Affairs — for military personnel, DoD spends not the $136 billion it tells you, but more than $300 billion.

Why are these costs skyrocketing? It’s a simple function of our foreign policy — America’s service members may be getting older and costlier, but since Afghanistan and Iraq, they’re also getting injured more frequently and in greater numbers.  Here’s my conclusion:

The problem of rising personnel costs can only be addressed from higher up the chain. Extended deployments overseas invariably increase costs because of the strain they place on the force — in casualties, logistics, sustainability, and recruiting and retention costs. Once the force has recovered from Iraq and Afghanistan, it is incumbent on America’s civilian leadership to carefully weigh the extended cost burden placed on the Pentagon’s personnel account when plotting our global security strategy. In short, America must choose its wars and deployments carefully, as exploding personnel costs are the untold story of Pentagon spending in 2010 and beyond.

In other words, you can talk about trimming benefits and reducing the ever illusive “waste, fraud, and abuse,” and that is no doubt a good thing. And so is eliminating unneeded weapons systems.

But if we’re going inject real savings on personnel into the system, we can’t just talk about TRICARE, we have to stop fighting dumb wars. And ultimately, that decision is above Gates’ pay grade.

Photo credit: https://www.flickr.com/photos/eschipul/ / CC BY-SA 2.0

Mollohan Defeated

Posted on by The Progressive Policy Institute

So, just three days after Utah’s long-time Republican Sen. Bob Bennett was denied re-nomination, long-time Democratic Rep. Alan Mollohan of West Virginia suffered the same fate, though in his case it was in a primary where he received only 44 percent of the vote against 56 percent for state senator Mike Oliverio. Mollohan had been in office for 28 years after succeeding his father, who held the seat for 14 years before that. Now that’s some serious incumbency!

While it’s natural to link the Bennett and Mollohan defeats to a similar anti-incumbency trend, that’s a bit misleading. Bennett’s problems were clearly ideological in nature. Mollohan’s biggest problem was ethics; he’s been the subject of multiple investigations of conflict-of-interest allegations in his role as an Appropriations subcommittee chairman, and Oliverio’s campaign called him “one of the most corrupt members of Congress.”

With Republicans considering Mollohan an especially ripe target, it’s possible that Oliverio’s win will make the seat an slightly easier hold for Democrats.

This item is cross-posted at The Democratic Strategist.

Could Meg Whitman Lose Her Primary?

Posted on by The Progressive Policy Institute

After spending upwards of $60 million, much of it lately on attack ads against her Republican primary rival, Steve Poizner, California gubernatorial candidate Meg Whitman appears to have lost most of a large lead over Poizner and is heading towards the June 8 balloting in an astonishingly vulnerable position.

A new Survey USA poll out this week shows eMeg leading Poizner 39 percent/37 percent, a 20-point net swing in Poizner’s favor since the previous SUSA survey in April. Even if you are skeptical about the accuracy of SUSA’s robo-polls, California political cognoscenti all seem to agree that Poizner is closing fast.

This is significant beyond the borders of California for at least four reasons. The first and most obvious is that Whitman’s epic spending on early television ads doesn’t seem to be doing her a lot of good. If she winds up becoming the new Al Checchi — the 1998 Democratic gubernatorial candidate who broke all previous spending records on heavily negative ads and then got drubbed in his primary — it will be an object lesson to self-funders everywhere.

The second reason a Whitman defeat or near-defeat would resonate broadly is that it would confirm the rightward mood of Republicans even in a state where they are reputedly more moderate. At this point, both Poizner and Whitman are constantly calling each other “liberals,” with Poizner, who’s running ads featuring conservative GOP avatar Tom McClintock, getting the better of that particular argument. Whitman would have undoubtedly preferred to have kept closer to the political center in preparation for a tough general election campaign against Jerry Brown. But Poizner is forcing her to compete for the True Conservative mantle in a very conspicuous way.

Third, there are signs that Poizner is also forcing Whitman — and by implication, the entire California Republican Party — to risk a repetition of the 1990s-era GOP alienation of Latino voters by endorsing harsh immigration measures. This has been a signature issue for Poizner from the beginning; he supports bringing back Proposition 187 — the 1994 ballot measure pushed by then-Gov. Pete Wilson that is widely interpreted as having destroyed California’s Republican majority by making the state’s huge Latino population a reliable and overwhelming Democratic constituency. Poizner has also lavishly praised the new Arizona immigration law. Having tried to ignore the issue initially, Whitman is now running radio ads in which Pete Wilson (her campaign chairman) touts her determination to fight illegal immigration. If those ads migrate to broadcast TV, it’s a sure bet that Whitman is panicking, and that monolithic Latino support for Brown in the general election is a real possibility. And if that can happen in California, where immigrant-bashing is so obviously perilous, it can certainly happen in other parts of the country.

Finally, it’s worth noting that aside from immigration, the issue on which Poizner seems to be gaining traction is the attention he’s devoted to Whitman’s involvement with Goldman Sachs. She was on the firm’s board for a number of years, and earned a very large amount of money from an insider practice — then legal, now illegal — called “spinning,” which she nows says she “regrets.” Poizner’s having a lot of fun with this issue, and the California Democratic Party is chipping in with an ad ostensibly promoting financial reform in Washington that is mainly aimed at Whitman. Lesson to would-be-business-executive-candidates: some kinds of private-sector experience are not helpful to your candidacy in the current climate.

It’s worth noting that there’s another major statewide GOP primary going on in California, involving another female former-business-executive who gained national attention through involvement in the McCain presidential campaign. That would be Carly Fiorina, who is running for the Senate nomination to oppose Barbara Boxer, but is struggling to catch up with an opponent, Tom Campbell, who really does have a moderate repuation, at least on abortion and same-sex marriage. And one of Fiorina’s main problems is a third candidate, Chuck DeVore, who’s running hard as the True Conservative in the race. Fiorina has recently wheeled out endorsements from Sarah Palin and Rick Santorum. All three major GOP Senate candidates have endorsed the Arizona immigration law. The outcome of this race, and where the competition positions the winner, could also have a fateful impact on the general election and on the future of California politics.

This item is cross-posted at The Democratic Strategist.

Photo credit: https://www.flickr.com/photos/farber/ / CC BY-NC 2.0

Miranda Rights, the Public Safety Exception and Congress

Posted on by The Progressive Policy Institute

The arrest of Faisal Shahzad has revitalized the conversation about the legal rights of terrorism suspects apprehended in the U.S. In February, I wrote that a public safety exception to ordinary Miranda procedures exists, and called it a useful tool in terrorism cases because it could allow for interrogation of terrorism suspects for a reasonable period of time before they are read their Miranda rights, as happened in the case of the Christmas Day bomber, Umar Farouk Abdulmutallab.

The incident in Times Square has given even more momentum to the idea of Miranda-less interrogations. On Sunday, Attorney General Holder came out and said that he wants Congress to pass a law specifically allowing interrogations without Miranda warnings in international terrorism cases. Such a law would obviate the need for law enforcement to rely on the current public safety exception.

Holder’s proposal is unique. The public safety exception is not the result of congressional action, but rather was created by a 1984 U.S. Supreme Court decision. In fact, all exceptions to Miranda rights under federal law come from court decisions and not from Congress. The question is this: Is it necessary for Congress to create a Miranda exception for terrorist suspects, or is the existing public safety exception enough? The congressional approach has several pros and cons.

The major benefit to Congress passing a law that explicitly creates a Miranda exception would be the specificity it would provide. Currently, law enforcement officials decide whether to invoke the public safety exception depending on whether they think a risk to public safety exists. Whether or not an officer’s belief is legitimate is determined on a case-by-case basis in court. Congress could make a law that lays out specific timeframes and circumstances under which a terrorist suspect could be interrogated without Miranda rights. Law enforcement officials would benefit greatly from knowing exactly what kinds of constraints exist.

Another benefit would be that, as long as law enforcement acted within the bounds of the statute, prosecutors would be more easily able to justify Miranda-less interrogation. As it is now, if a terrorist’s defense attorney challenges his client’s interrogation, prosecutors must show that law enforcement acted out of a legitimate concern for public safety. That process can be significantly more difficult and time-consuming than if prosecutors could simply point to a statute authorizing interrogation without Miranda.

Conversely, the existing exception’s major benefit could be its flexibility. The exception was created without specific constraints because the Supreme Court knew that it could not foresee all possible scenarios in which the exception could be applied. Similarly, Congress will not be able to foresee all possible terrorism scenarios. This could lead to a situation in which Congress creates a law that gives law enforcement less latitude than they might receive under the current exception.

It’s likely that Congress will try to pass a law that allows for a terrorist suspect to be interrogated for 48-72 hours, or even more, without being read his Miranda rights. Interrogations of such length would probably not be allowed under the existing exception. Should Congress authorize long interrogations without Miranda, expect a significant backlash from civil liberties advocates and some elected officials. Moreover, a statute granting law enforcement a great deal of flexibility could run the risk of being overturned in the courts. Stay tuned.

Cheat Sheet for Climate Policy: A PPI Series

Posted on by The Progressive Policy Institute

How to tell a good climate bill from a bad one?

This PPI series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. Some of the issues that come up will be essential to a good climate bill. Others might get a lot of play but are in fact trivial for climate policy. The “cheat sheets” below will help you make sense of the climate bill that eventually emerges from Congress:

 

 

 

Cheat Sheet for Climate Policy: Part IV – What’s Not Important for a Good Climate Bill

Posted on by The Progressive Policy Institute

How to tell a good climate bill from a bad one? This series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. In previous posts, we looked at the crucial, the merely important and the negotiable elements in a climate bill. In this post, the last in the series, we highlight issues that might be popular or politically important, but which actually don’t matter that much for climate results. (To see all the posts in the series, click here.)

As with any big issue in Washington, climate policy has its share of sideshows and special-interest pet projects. If somebody’s favorite policy can be plausibly (or even implausibly) tied to climate, it’s a good bet they’ll attempt to do so. Conversely, if someone wants to hijack the climate debate, they may try to attach an unpopular issue to it. There are also a good number of perfectly well-intentioned ideas that, in reality, won’t make much difference in terms of climate policy.

Our goal in this post is to identify these issues: those that we feel are just political distractions, and those that won’t make much difference. If you’ve followed climate policy, you might find some surprises here — we include some issues that are often trumpeted as important. Not all of the policy proposals we mention are necessarily bad. Some are, but others are just not that important and will not have much effect on emissions reductions or the cost to the economy.

Category IV Issues: The Bad, the Irrelevant and the Trivial

#1: Renewable portfolio standards

A renewable portfolio standard (RPS) is a requirement that a certain percentage of electricity supplied by power companies come from renewable sources: wind, solar, geothermal and sometimes hydro or nuclear. A majority of states have an RPS in place, but there is no current federal standard. Many climate proposals, including Waxman-Markey, include an RPS.

Superficially, the idea is appealing: by forcing power suppliers to use renewables, an RPS expands the market for them. This will obviously increase their use, reduce emissions and encourage innovation in renewable techs.

The problem is that once you have a carbon price, moves to renewable energy sources should happen anyway, making an RPS redundant. Since burning fossil fuels becomes more expensive, power suppliers will shift to cleaner technologies. Some of this switching will be to renewables, while others will be to cleaner fossil fuels like natural gas – a fuel that is excluded in most renewable portfolio standards.

If the standard is set at a level lower than the amount of renewables that power companies would shift to anyway under a carbon price, then an RPS is totally irrelevant: companies would meet the standard just by acting in response to the price. But if the standard is set at a level higher than the amount of renewables utilities would use, an RPS imposes additional costs. Power companies that would like to switch to cheaper and clean(er) technology — like natural gas or nuclear (if it’s not included in the RPS) — would be limited in their ability to do so by an RPS. Instead, an RPS would force them to use more expensive renewables in their efforts to make their emissions targets. Those costs get passed on to consumers, making climate policy more expensive.

And here’s the thing: it would be costlier without providing any additional emissions benefits than what we would get under a cap. An RPS is often favored by environmental groups (and, of course, firms with investments in renewables) presumably because they think a carbon price will be too low to achieve the level of clean energy use they prefer. But this doesn’t make much sense. The cap set by a climate policy determines the environmental outcome; all an RPS would do is restrict the ability of power companies to decide how to meet that cap. In other words, an RPS doesn’t result in lower emissions. If you want that, you need to go back to Category I — set a tighter cap (or a higher carbon tax).

Note that the fact that an RPS is a bad idea doesn’t necessarily mean that government investment in R&D for renewables is unwise — such investments are responses to identifiable market failures. But an RPS would be a poor remedy for those failures.

#2 Preempting the EPA

The Environmental Protection Agency (EPA) has some authority under existing laws to regulate greenhouse gases. The Supreme Court definitively established this in its famous Massachusetts v. EPA decision in 2007. Under President Obama, the agency has already started regulating greenhouse gas emissions from cars and trucks, and is moving towards regulating emissions from so-called “stationary” sources, power and industrial facilities. If Congress fails to act on climate, the EPA will continue down this path.

If Congress does pass a new law, how should that law deal with the existing EPA authority? The majority (though not consensus) view on the Hill appears to be that new legislation should preempt this authority. Waxman-Markey would explicitly remove the EPA’s authority under the Clean Air Act to regulate greenhouse gases from stationary sources (but would leave regulation of vehicles intact). Preliminary indications are that the Senate bill would do the same.

Many environmental groups oppose this preemption, claiming that EPA authority is needed in case the climate law does not go far enough. Again, this doesn’t make sense. First, EPA authority isn’t a kind of reserve power, to be used only when a new law appears inadequate. If Congress passes a new climate law but leaves existing EPA authority intact, the EPA will still be legally required to regulate greenhouse gases. Waiting to see if the new climate bill is “good enough” before taking action won’t work: the Bush EPA advanced similar arguments in Massachusetts v. EPA and lost. In other words, preempting the EPA isn’t like discarding a useful tool — it’s like turning off a machine. New climate legislation is a better machine.

Second, where the EPA does have discretion, it needs the political will to act. The moves that the EPA is currently making to regulate greenhouse gases are highly controversial. It has taken years (arguably decades) of congressional inaction on climate for the EPA to use its exisiting authority to regulate greenhouse gases. If there is a new climate law, it will likely sap the agency’s will to act further on climate even if authority is not preempted. In that environment, it is hard to see the administration devoting resources and political capital to additional regulations (beyond the minimum that is legally required) for the foreseeable future.

In short, there are some things the EPA must do, and a new climate bill cannot change that without preempting agency authority. There are other things the EPA has control over, but action on those areas will be unlikely for political reasons once a climate law has been passed. If environmental groups feel that the climate proposals under consideration don’t go far enough, they should make an effort to convince legislators — and their constituents — of that. The move to preserve the EPA as an alternative venue for their arguments is understandable, but a little cynical. The time for the climate policy debate is now (we hope), and the venue is Capitol Hill.

#3 Preempting the states

Like the EPA, states have made moves to regulate greenhouse gases in the absence of action from Congress. California’s AB32 law (which commits California to reducing emissions to 1990 levels by 2020) and the creation of a Regional Greenhouse Gas Initiative, a regional carbon market by some states in the Northeast, are the most notable examples.

How should a federal climate law treat these regional and state efforts? Should they be allowed to continue, or should federal law preempt them?

The basic answer is similar to that for renewable portfolio standards: state-level regulation makes sense now, but is mostly useless or even counterproductive if there is a national carbon price. As Robert Stavins recently explained, state-level greenhouse gas regulation that is stricter than the national cap doesn’t reduce overall U.S. emissions — it just forces emissions out of the regulating state into one without climate regulation. This drives up prices in the regulating state without any climate benefit.

Preemption of state greenhouse gas regulations therefore probably won’t have any negative impacts for emissions and climate. Stavins points out that there still may be benefits for smaller state-level regulations in situations where a low federal carbon price fails to push beneficial changes. That’s true, but so long as the new federal law has a serious emissions cap, preempting major regulations like AB32 and regional carbon markets is fine. Industry wants this preemption since they’d rather have a single set of rules to comply with. It’s a concession that policy-makers can make at little or no environmental cost.

#4 Wall Street

Wall Street does not have a very good reputation right now. Creating a new market for carbon allowances means new opportunities for brokering trades between emitters — and with that market, possibilities for speculation, new financial instruments such as derivatives and possible opportunities for abuse. Some on Wall Street certainly see carbon as just another commodity and carbon markets as a big opportunity.

But while derivatives have been called financial weapons of mass destruction, they can play an important role in future carbon markets. Firms will need some kind of mechanism to protect against the risk of unforeseen events that cause them to be out of compliance with the cap, such as emergency fuel-switching or inaccurate emissions accounting. Since regulated firms are exposed to such risks, they will look to reduce that exposure through insurance in the form of carbon derivatives. The market must be properly regulated (the rules can be written directly into climate legislation), but assuming it is, the benefits of reduced transaction costs and improvements in liquidity that financial expertise can bring seem likely to exceed the costs of possible fraud or abuse.

Some of the criticism may arise not from a fear that the government will be unable to prevent criminal or undesired activity, but from opposition to creating a new market (and new profit opportunity) for Wall Street. As Michael Levi points out, however, somebody has to run a carbon market, and they had better have expertise. For all its recent failings, Wall Street firms have world-class market-making expertise. Oversight is necessary, but keeping the best financial minds away from carbon simply because they’re unpopular right now is likely to be costly.

#5 Drilling and energy security

One touted benefit of a climate policy that reduces reliance on fossil fuels is that it improves American energy security. This is easy to understand: oil comes from somewhere else, and if we use less oil, we won’t import as much. This improves our trade deficit and reduces reliance on unstable parts of the world for energy.

All of that is a good thing, but it’s a side benefit — it has nothing to do with climate. Indeed, policies that improve energy security might or might not have climate benefits. Putting a price on carbon certainly will, but increasing domestic oil supplies by expanding drilling won’t — it will either replace imports and have no overall effect on emissions or it may drive down (ever so slightly) the price of oil, which will increase consumption and emissions. If domestic drilling does not result in increased emissions, it is not necessarily a bad idea, but it can’t be justified on climate policy grounds.

Drilling is an energy issue, not a climate one. But climate legislation itself has been framed as being about energy (and, specifically, energy security) as much as it is about climate change. That’s not unexpected, and it will similarly be no surprise if climate legislation includes provisions to expand drilling, though how the political dynamics of the Gulf Coast oil spill play out over the next few weeks will determine what, if anything, is included. The point is that these provisions are political — they are in there to attract support for the bill or placate opponents, not for any climate benefits.

The Bottom Line

As the Senate tackles climate legislation, numerous provisions and elements are likely to be raised. Be wary if the conversation begins to get bogged down around the following questions:

  1. Does the bill have renewable portfolio standards?
  2. Does it preempt EPA authority?
  3. Does it preempt state regulations?
  4. How does Wall Street come out?
  5. Does the bill tackle our energy security problems?

These questions are largely distractions to the ultimate objective of a climate bill: reducing greenhouse gas emissions as much as possible at the lowest possible cost. If you care about climate change, keeping your eyes on that end goal will be crucial if there is to be any hope of untangling the legislative thicket and passing a meaningful climate bill this year.

Faisal Shahzad’s Relationship to the Pakistani Taliban

Posted on by The Progressive Policy Institute

It was the Pakistani Taliban! Yes, yes, of course. They sat in their evil lair and activated one of their top sleeper agents to infiltrate American territory with a devilish plan to thwack hundreds of unsuspecting victims. And they monitored it all from their giant TV screens in real time, having tapped into NYPD’s closed-circuit television. Should visual monitoring fail, robo-operative Faisal Shahzad would simply activate the GPS tracking system linked to the Pakistani Taliban’s satellite via the computer chip inserted behind his ear.

Or not.

As Eric Holder and Hillary Clinton all took to the Sunday shows yesterday to proclaim Faisal Shahzad’s “connection” to the Pakistani Taliban, it struck me that such rhetoric often conveys, falsely, the sense of an ironclad connection between the operative and his terrorist mentors.

Secretary Clinton deserves credit for her answer on 60 Minutes yesterday, when she said, “There are connections. Exactly what they are, how deep they are, how long they’ve lasted, whether this was an operation encouraged or directed … those are questions still in the process of being sorted out.”

She’s right, of course. But my worry is that people stop paying attention after that first sentence.

I think I have a pretty good idea of Faisal Shahzad’s relationship to the Pakistani Taliban. My inkling is based on not a single piece of intelligence reporting as it pertains to this case, but rather my experience investigating the bombings in Madrid (2004) and London (2005). Both those operations featured “home-grown” operatives — locals who were “clean” (i.e., had all the proper paperwork to access the target country) and who had explicit or nebulous associations with al Qaeda in Afghanistan or Pakistan. The Madrid bomber’s connection to AQ has always been slightly murkier, but the London bombers were known to have traveled to Pakistan on prior occasions.

The Metamorphosis

Based on London and Madrid, here’s an attempted reconstruction of how Faisal Shahzad went from being a nice young father in the Connecticut ‘burbs to an attempted mass murderer:

First, the part we don’t exactly know: What made him travel to Pakistan with the intent to hook up with the Taliban? While a lot of bad stuff had happened to Shahzad over the course of the previous months — quitting his job and losing his house among them — we don’t know what mechanism drove him from “depressed” to “seeking revenge.” It could have been a chat room; it could have been secret meetings at a mosque; it could have been one influential mentor, as was the case with the first London cell in the north of England (the cell met regularly with an Islamic extremist in the backroom of a bookstore before traveling to Pakistan).

However, we do know that it was one of these (or something like it). Faisal went from having a bad run in life to actively seeking revenge. We know that someone — whom we’ll call his “mentor” — got him to translate his frustration into action and was well-connected enough to link up Shahzad with Taliban elements in Pakistan.

Next, as he’d done several times, Shahzad traveled to Pakistan. Most of his previous trips were likely family-related. This one might have been, as well. But at some point, Shahzad’s mentor told his contacts in the Pakistani Taliban that he had an American passport-holding recruit who was open to learning more. What’s more, Shahzad’s mentor must have been highly trusted in Pakistan because Taliban elements view U.S.-based operative as spies. That the mentor could vouch for Shahzad’s legitimacy would have been critical.

The mentor would have given Shahzad contact information in Pakistan, but it would have likely been up to Shahzad to initiate contact with Pakistani Taliban.

Upon traveling to Pakistan, Shahzad obviously decided that he was interested in learning more. He got in touch with his mentor’s network, and agreed to spend a certain period of time — as few as a couple weeks, but up to several months — in the Pakistani wilderness with Taliban members. Travel records indicate that Faisal went to Karachi and then Peshawar, the Taliban hotbed where Shahzad likely jumped off the grid.

During his time in the Taliban camp, Faisal would have gone through Terrorism 101. He’d have been given physical training, religious indoctrination (which is critical to sustaining his commitment), bomb-making classes and likely small-arms instruction. If there was a group of students, they would have bonded and shored up their commitment to jihad in small group sessions where they solidified their hatred of America.

A Freelance Terrorist

Faisal would have received all of this training, but would likely not have been given a specific plan of attack. This is the changing model of terrorism today. No longer do al Qaeda masterminds sit deep in caves and dream up logistically complex plots akin to 9/11. Instead, it’s more likely that the Taliban would have provided him training, possibly some cash, and given Shahzad the autonomy to imagine and execute his own plot. That’s right — the Pakistani Taliban likely would have taught him, paid him, and told him, “Good luck with whatever you end up doing. Just do something.”

In today’s world of increasing counterterrorism capabilities, this model stands a significantly higher degree of success. By not weighing Faisal down with the who’s, what’s and when’s of an operation, logistics are simplified dramatically, thus decreasing the chances of intercepted communications or arrested operatives that could scuttle the whole shebang. Cost drops, too. And since the Taliban has been isolated, they wouldn’t have on-the-spot access to scout a potential attack site, and are therefore almost forced to cede control to local operatives.

Of course many of these operatives, Shahzad and the Underwear Bomber included, aren’t “professional terrorists” with years and years of extensive training and indoctrination. But the Pakistani Taliban now seems willing to give up operational control and experience in order to increase the chances of a successful attack, even if that attack is significantly smaller than before. And since politicians are ready to use terrorism to score political points, a small attack could potentially carry as great a weight as another 9/11.

Elena Kagan Gets the Nod

Posted on by The Progressive Policy Institute

Even before the president’s announcement of Elena Kagan as his second nominee for the Supreme Court, progressives were beginning to rethink their position of skepticism (often assumed in the cause of encouraging a different nominee, typically Judge Diane Wood), and conservatives were beginning to gird up their loins for a confirmation fight.

There will be some progressives (probably Glenn Greenwald, but perhaps others) who may never reconcile themselves to support for a Justice with Kagan’s record as Solicitor General on civil liberties issues related to executive power and treatment of terrorism suspects.

But as SCOTUSblog’s Tom Goldstein suggested at The New Republic this weekend, the confirmation debate in the Senate is very likely to fall into familiar partisan/ideological patterns, with the final vote representing a mirror image of the Alito confirmation.

One major argument for her nomination all along has been her recent confirmation as solicitor general with significant Republican support. But some GOP senators will quickly argue that a different standard altogether will be used for a lifetime appointment to the High Court, and find reasons to vote against her (one senator, Arlen Specter, is in a particularly embarrassing situation, having voted against Kagan for solicitor general back when he was struggling to placate conservatives; he must now support her for the Court in the midst of a tough Democratic primary battle).

A summary of immediate conservative reaction to Kagan’s nomination by CBS’ Jan Crawford indicates that her enforcement of Harvard Law School’s ban on military recruitment on campus on grounds that DADT violated the university’s non-discrimination policies will be the lightning rod for the campaign against her. That makes sense, because the issue simultaneously strikes chords with cultural conservatives spoiling for a Court fight, and with conservative “populists” generally who will depict Kagan as an New York/Ivy League elitist out of touch with mainstream patriotical values.

But as I’ve argued earlier, the real question is whether the newly radicalized conservative/Tea Party faction of the GOP will insist on making the confirmation fight a showcase for their own distinctive views on the Constitution, which would make any Obama nominee, and most Republican nominees, categorically unacceptable. Kagan’s notoriously short public record of pronouncements on constitutional issues may, in fact, feed conspiracy theories that she represents a carefully planned leftist plot to move the Court in a totalitarian direction.

So even as Republicans search (almost certainly in vain, given the scrutiny she’s already received as a likely Court nominee) for some smoking gun in Kagan’s background, keep an eye on the tone of conservative rhetoric about this nomination. If it gets as shrill as I suspect it will, then progressives need to be prepared for a counter-offensive that exposes the radicalism of the increasingly dominant faction of the GOP.

This item is cross-posted at The Democratic Strategist.

Bob Bennett Booted from Senate

Posted on by The Progressive Policy Institute

Over the weekend the extreme peril faced by Republican Sen. Bob Bennett turned into abject defeat at the Utah GOP Convention. By finishing third on the penultimate convention ballot, the incumbent was excluded from the June 22 primary. Indeed, on the final ballot the primary nearly got canceled, as businessman Tim Bridgewater came close to the 60 percent necessary to be proclaimed the party nominee. Instead, he will face former Samuel Alito law clerk Mike Lee, a favorite of national hard-core conservatives such as Jim DeMint and the RedState crowd. Bennett could run in the primary (or even in the general election) as a write-in candidate, but given his dismal performance at the convention despite many weeks of dire warnings that he was in trouble, he’ll probably hang it up at the age of 76 after three Senate terms.

Bennett’s non-Utah enemies are unsurprisingly crowing over this event, which they view as an object lesson in what happens to RINOs (though Bennett is probably the most conservative elected official to earn that term of opprobrium) who don’t recant such sins as a vote for TARP and support for some sort of bipartisan health care reform initiative.  As 538.com’s Nate Silver pointed out, Utah’s extremely unusual nominating process limits the predictive value of Bennett’s fall (you could also add that Utah’s overwhelmingly Republican electorate made the risk of dumping an incumbent lower than in more competitive states). Still, the shock waves among Bennett’s Republican colleagues in Washington over this development are worth their weight in gold to those fighting to move the GOP ever faster to the right. Bennett’s fate will certainly cross the mind of the rare Republican considering a vote for any major legislation backed by the Obama administration.

But the other bit of fallout from Bennett’s defeat may not play out for a good while: the exceptionally unsuccessful personal effort by Mitt Romney to save Bennett’s bacon. Romney endorsed Bennett many months ago and cut ads for him, but more importantly, he was present at the convention to introduce the incumbent in a speech that drew as many catcalls as cheers. While it’s unlikely that Mitt did too much damage to his status as an adopted favorite son of Utah, it did show the limits of his personal clout in a state where he’s considered an icon thanks both to his LDS faith and his 2002 Olympics effort.  If he can’t move a small number of delegates in Utah, how well will he do in an arena like the Iowa caucuses, where he was trounced by Mike Huckabee in 2008?

As it happens, Romney isn’t the only potential 2012 presidential candidate who’s gotten into hot water with conservatives during the last few days. The other is none other than Sarah Palin, as Andy Barr of Politico explains:

Former Alaska GOP Gov. Sarah Palin’s endorsement of Carly Fiorina in California’s Senate race has prompted a fervent blowback on her Facebook page, long Palin’s safe haven for delivering her message.

The revolt is coming from Palin supporters who also back Chuck DeVore — a Tea Party favorite who is campaigning against Fiorina in the Republican primary.

Palin’s Facebook page is littered with comments opposing her endorsement of Fiorina, the former CEO of Hewlett-Packard.

Palin had earlier made many of her followers unhappy by endorsing John McCain over J.D. Hayworth in Arizona, but most had probably written that off to personal gratitude to her former running mate. And while Palin’s endorsement of Fiorina was easy to understand — she’s a fellow female conservative who played a visible role in the McCain-Palin campaign, and also has the bulk of national anti-abortion endorsements — the atmosphere in hard-right circles is clearly becoming less tolerant to those who don’t follow the conservative zeitgeist towards ideological rigorists like DeVore. That may be the enduring impact of the Utah Republican rejection of Bennett.

Poll Watch

In polling news, both Rasmussen and Muhlenberg now show Joe Sestak moving ahead of Arlen Specter in the Pennsylvania Democratic Senate primary, on tap for May 18. And at pollster.com, Harry Enten marshals the evidence that Sestak would be stronger than Specter in the general election contest with Republican Pat Toomey.

According to Calbuzz, private polling is showing Steve Poizner beginning to seriously erode Meg Whitman’s once-vast lead in the California Republican gubernatorial primary. And in a sign that eMeg could indeed be panicking a bit, she’s running a radio ad that features none other than Pete Wilson vouching for her tough attitude towards illegal immigrants — a gesture that could cost her dearly among Latino voters in a general election.

Cheat Sheet for Climate Policy: Part III — What’s Negotiable for a Good Climate Bill

Posted on by The Progressive Policy Institute

How to tell a good climate bill from a bad one? This series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. In previous posts, we looked at the crucial and the merely important issues that factor in the climate debate. In this post we highlight issues that matter for climate policy, but will not necessarily make or break it. (To read the other posts in the series, click here.)

So far, we’ve established the absolutely critical aspects needed to make credible climate policy and identified the important features that would make that policy effective. Now we will focus on issues that aren’t quite on the same level, negotiable elements that could still have a meaningful role in determining the long-term viability and effectiveness of a domestic emissions mitigation program. These issues — specifically, price controls and the international implications of U.S. legislation — could become a big part of the political discussion.

Category III Issues: Negotiable Elements of Climate Policy

#1: Price controls: offsets and collars

An uncontrollably rising carbon price is a nightmare scenario for regulated firms and consumers, so industry groups have made a priority of getting robust price controls into climate legislation. Price controls generally take three different forms: banking and borrowing, offsets and price collars. Because banking and borrowing has such a strong effect on the emissions reduction path, we included them in our last post. Here we’ll focus on the two other strong cost containment mechanisms.

a) Offsets

If you’ve been paying attention to the debate over the past two years, you’ve likely heard something about offsets. They are one of the most controversial aspects of climate legislation. Environmentalists are suspicious of them and industry can’t live without them.

What exactly are offsets? As we mentioned in a previous post, carbon is a stock pollutant, meaning that we only care about its total accumulation in the atmosphere. If you keep adding carbon to the system, but remove an equal amount at the same time, it is just as good as no longer adding carbon at all. This is the underlying principle of offsets — firms that pay to remove greenhouse gases from the atmosphere (or keep them from entering in the first place) can receive the same credit they would get if they reduced their own emissions.

For example, with offsets in a cap-and-trade system, a utility that needs to reduce its carbon emissions by 20 million tons need not do so only through emissions cuts from its operations. It could reduce its own emissions by 15 million tons, then receive offset credits through financing a reforestation project and an agricultural methane reduction project that combined would lead to emissions reductions of five million tons, allowing the company to meet its target.

Here is a quick list of different kinds of offsets that might count under climate legislation:

Forestry: Forests absorb CO2 through natural respiration processes and store it in plant tissue and soil. When deforestation occurs, that stored carbon is released into the atmosphere, contributing to emissions. Deforestation and forest degradation count for around 15 percent of global CO2 emissions. Projects that reforest — increasing carbon sequestration — or reduce deforestation and forest degradation are growing increasingly popular in voluntary carbon markets and may facilitate significant savings. Some models have speculated that international forest offsets can account for 25 percent of emissions mitigation by 2020.

Agriculture: The agricultural sector accounts for six percent of U.S. emissions, but agricultural emissions will probably not be covered by a carbon price due to the complexity of measuring emissions from agricultural practices and the power of the farm lobby in Washington. The important gases from agriculture are methane emissions from large-scale cattle operations and manure management, and nitrous oxide emissions from fertilizer applications and soil management. Offset projects that capture renegade methane emissions or reduce nitrous oxide releases through better soil management will likely be the most widespread offsets available from the agriculture sector.

Renewable energy/energy efficiency: Projects that supplant dirty energy sources with cleaner sources or improve efficiency in energy production or end-use can also be eligible for offset credit. For example, a firm looking for cheap reductions could finance the development of a renewable energy project and receive credit for the emissions reduced when the renewable energy displaces conventional dirty energy. Additionally, projects that increase the efficiency of energy usage in buildings or facilities can count as offsets. These projects are a major component of the Clean Development Mechanism (CDM), which was established by the Kyoto Protocol. Using the CDM, developed countries can sponsor projects in developing countries and receive emissions reduction credit.

Waste management: The decay of garbage in the nation’s thousands of landfills represents the second largest source of U.S. methane emissions behind cattle operations. Methane flaring, a process that captures and burns these emissions, converting methane into CO2, is considered an offset, as CO2 has a lower global warming potential than methane. Combusting methane for energy generation may also generate offset credits.

Fugitive mine emissions: As with landfills, capturing fugitive methane emissions from coal mines presents an opportunity for offsets and may also have benefits in terms of miner safety.

While all of these offsets options are currently available in voluntary offset markets and allowed by regional cap-and-trade schemes like RGGI, they may not all be eligible for credit under federal regulation. Waxman-Markey does not count renewable energy, energy efficiency, waste management and coal emissions as offsets. Cantwell-Collins does not allow offsets in its trading system, but it does permit such projects to be paid for from its Clean Energy Reinvestment Trust.

Many offsets will be cheaper than actual emissions reductions, making them an important means of price control. This is especially true for international forest offsets — the EPA analysis of Waxman-Markey contended that allowance prices would be 96 percent higher without them. That said, Greenpeace and other environmental groups have firmly planted their flag in the anti-offset camp, and there are a number of issues that would need some serious policy attention in order to make forest offsets credible in the U.S. market.

There are four major requirements to making offsets a robust tool. First, they must be additional — that is, projects should only be considered offsets if the specific practice would not have happened anyway. Second, offsets should have permanence — projects are only useful if they are not quickly undone (an offset for planting a tree is of little value if it is rapidly cut down). Third, offsets should be verifiable — there must be some way to confirm that projects are doing what they claim (for forests, this can be very difficult). Finally, offset programs should address leakage — they should not simply shift emission-generating activities somewhere else. These are all valid concerns, and all four will have to be addressed for offsets to be a credible part of climate policy.

Potential hang-ups for offsets will likely involve politicians’ hesitations to send large sums of money overseas, the reliability and veracity of offset credits, the number of offsets allowed for use by regulated firms and the type of offsets available from domestic sources. Despite the misgivings of some policymakers and commentators, offsets will figure prominently in domestic legislation. Waxman-Markey included two billion tons worth of offsets annually, a significant proportion of overall U.S. emissions, the same amount as in the Kerry-Boxer bill introduced in the Senate last fall. Instead of spending time and energy railing against them, policy discussions should instead focus on setting up institutions to fix the problems listed above.

b) Price collars

More than anything else, firms want some certainty when it comes to climate regulations. Planning capital investments over the long-term will be significantly affected by carbon prices, and the more predictable the changes over time, the better firms can plan ahead. Moreover, sudden system shocks in the form of extreme drops or increases in prices can be very expensive and detract from the efficacy of cap-and-trade markets.

To protect the system and reduce price uncertainty, policy-makers are looking to use a price collar in the allowance market. A price collar is a way to define a general price path by restricting how much the price can rise or fall. Price collars work by establishing a price floor — under which the allowance price can never drop — and a price ceiling — above which the price will not rise. It is a simple mechanism in concept, and can provide a lot of certainty for regulated parties and market participants. The price floor and ceiling should be spaced far enough apart to accommodate market dynamics and rise at some rate to match the general rise in allowance prices.

When allowance prices hit the floor, they simply remain at that price until trading forces the price to rise again. Things get more complicated when they hit the ceiling, however. There are two options to bring down the price, depending on if you employ a hard collar or a soft collar. A hard collar releases additional allowances into the system until the price drops, regardless of how many it takes to do so. By contrast, a soft collar uses a strategic reserve of set-aside allowances to reduce the price below the ceiling. The difference between the two is a matter of emissions certainty. A soft collar maintains the overall emissions cap by taking some out of the system at the beginning, much like a rainy day fund, whereas a hard collar just dumps allowances into the market until the price changes. Firms may favor a hard collar because it provides more price certainty, but people concerned about overall emissions will prefer a soft collar.

#2: International aspects

If and when Congress does pass climate legislation, its impact will reach far beyond our borders. The international implications of domestic climate policy are extensive, and while they do not play a huge role in the political discourse, they have sway over some notable policy choices.

a) International negotiations

The Conference of Parties (COP) 15 in Copenhagen in December 2009 was advertised as a chance for the U.S. to reclaim its place at the world leader and innovator on environmental issues. The U.S. was able to do that only partially, and that was due largely to the extraordinary personal diplomacy of President Obama. U.S. negotiators had little to work with, bringing with them no official legislation to show other nations while trying to broker a deal that could pass Senate muster. Without a signed bill, the 2010 COP in Cancun this coming November will probably turn out similarly; nations will bicker and haggle and eventually end up not making any kind of serious commitment sans U.S. leadership. The EU does not have the sway to move a global climate deal forward, while other major emitters like China and India don’t have the incentive to act.

That’s not to say international negotiations will not have some influence on the shape of U.S. legislation. At Copenhagen, the U.S. committed to provide $30 billion from 2010 to 2012 to developing countries for mitigation, adaptation, technology transfer and other assistance. Additionally, the conference agreed to establish an annual $100 billion fund — of which the U.S. is expected to give roughly $20 billion — for developing countries for the same uses. Some of this funding will likely be partitioned from current programs, but it will certainly not be enough. Revenues from carbon markets established by climate legislation — as well as allowance allocations — will likely provide the most reliable source of international funds. The tradeoff is that every dollar spent on helping other nations adjust to climate change is one that can’t be used domestically. Though it won’t dominate the debate over any climate bill, the use of carbon revenues for international financing could end up having a real impact.

b) Competitiveness and leakage

Certain industries with intrinsically large carbon footprints, such as cement, steel and paper pulp, are particularly sensitive to carbon prices. These industries are concerned that paying for their sizable emissions will reduce their overall output, leading to job cuts and smaller profit margins. Moreover, they worry that a U.S. carbon price will lead to a shift in production to other countries that do not have similar regulatory burdens. When firms leave for other countries that don’t have a climate policy, it could lead to higher overall global emissions, a phenomenon known as leakage.

There are a couple of solutions to these problems. First, to help protect industries at home, climate policy can include rebates to industries — either in the form of cash or extra tradeable allowances — based on their output to help them adjust to the new reality of a price on carbon. Second (and more controversial), the federal government can establish border adjustments, slapping taxes on imports competing with vulnerable domestic industries. Essentially tariffs, such levies would put goods from countries without a climate policy on the same level as those from the U.S. Border adjustments can make for tricky politics, though. When the Waxman-Markey bill passed the House in 2009, President Obama openly criticized the inclusion of such measures. When the debate picked up in the Senate, however, 10 Midwestern senators stated they would not back any climate legislation that did not support manufacturing interests with some kind of border provision. Even if some compromise allows border adjustment to find its way into climate legislation, there’s a chance it would not be allowed under WTO agreements.

The Bottom Line

Last post, we reviewed important aspects of climate policy. In this post, we surveyed two areas that have value in generating good policy, but are negotiable in terms of their importance:

  1. Is there a price collar? Are offsets allowed?
  2. What is the effect of the proposal on international climate issues? How will it affect negotiations and commitments? How does it attempt to protect trade-vulnerable industries?

In our next and final post, we will focus on the issues that make little contribution to good climate policy — or might even be counterproductive.

High-Speed Rail May Stall Without More Push from the White House

Posted on by The Progressive Policy Institute

Unless the White House acts forcefully and decisively to advance its transportation agenda in Congress, the president’s vision for high-speed rail may get sidetracked by the looming federal deficit.

That’s the growing perception on Capitol Hill as Congress grapples with an infrastructure program that could cost between $22 million and $132 million a mile if developed along the lines of 200-mile-per-hour bullet trains now running in Europe and Asia.

Unlike the health care debate, President Obama has been conspicuously unengaged from the details of how to move his high-speed-rail (HSR) plan from a one-off award program using Recovery Act stimulus funds to a dedicated multi-year program akin to the scope and ambition of the Interstate Highway System.

The House Transportation and Infrastructure Committee has raised concerns about the program’s lack of a solid revenue source. In a letter addressed to the president, Chairman James L. Oberstar (D-MN) and Railroad Subcommittee Chair Corrine Brown (D-FL) wrote:

We stand ready to help move your vision of high-speed rail closer to reality. But given budget constraints, we cannot continue to rely on general authorizations and appropriations to finance high-speed rail. We need to identify a dedicated revenue source for high-speed rail, and we need your help to do that.

More than 100 House members signed the letter.

What has especially upset HSR supporters is that, in the wake of $8 billion awarded to states last January under the American Recovery and Reinvestment Act, there is precious little additional funding earmarked for the program.

Congress authorized $2.5 billion for HSR projects in the current fiscal year, but HSR funding then drops to just $1 billion under the administration’s proposed FY 2011 budget.

That’s not enough to complete the 85-mile corridor proposed between Tampa and Orlando, not to speak of helping underwrite such ambitious projects as California’s proposed 800-mile HSR network connecting the state’s largest cities.

A coalition of transportation advocacy groups is calling on Congress to appropriate $4 billion for high-speed rail in 2011. Tomorrow the coalition will hold a press conference at Washington’s Union Station to present their case, with Rep. Brown among those scheduled to speak.

Last summer, Oberstar’s committee introduced a draft bill that would place $50 billion in the reauthorized surface transportation program to fund HSR development over the next six years. The actual method of funding the program was left open “in hopes that the administration would help Congress identify a dedicated revenue source for high-speed rail,” according to Oberstar.

The establishment of a national infrastructure bank, which would leverage private capital, has been discussed as a possible source for rail funding. Oberstar has embraced this idea in principle.

Another idea is to raise the federal tax on gasoline (which was last raised 28 years ago during the Reagan administration) to increase the revenue stream to the Highway Trust Fund. Some portion of the trust fund would then go to HSR development.

For its part, the administration opposes a gas tax increase and has proposed a more modest transportation infrastructure fund. Financed with $4 billion in public money, the bank would help bankroll transportation projects of national significance, presumably including HSR. This proposal has yet to be taken up by Congress.

Like any political vacuum in Washington, the absence of a strategy to pay for high-speed rail has emboldened critics of the program.

Sen. Kit Bond (R-MO), the ranking minority member of the Senate transportation appropriations subcommittee, last month lambasted the administration for spending funds on expensive trains during a budget crunch. “With a $12 trillion and growing [federal] deficit, we can’t just throw funds at projects willy-nilly,” he said.

Patty Murray (D-WA), chair of the Senate panel, also questioned the absence of a long-term plan by the administration.

While some of this criticism is ill-founded – the administration is on target for completing a National Rail Plan by the date requested by Congress — what the carping on Capitol Hill makes clear is that both sides of the aisle recognize that a modern rail infrastructure will be very expensive to build.

Neither Democrats nor Republicans are willing to commit to a potentially unpopular funding mechanism — such as an increase in the gas tax — that could jumpstart HSR development and allow states, manufacturers and potential rail operators to make long-term investments in infrastructure and manpower.

The need for administration leadership is clear. Lest he watch his vision dissolve in drift and delay, the president must make the case that a national program of rail construction will not only unsnarl our highways, but stimulate economic growth (with new jobs and emerging technologies) and protect our national security (by breaking our dependence on foreign oil). The time to start is now.

Photo credit: https://www.flickr.com/photos/mujitra/ / CC BY 2.0

Defense News: Senior DoD Leaders Warn of Rising Personnel Costs

Posted on by The Progressive Policy Institute

PPI National Security Director Jim Arkedis argues that selective cuts on military benefits will not solve the defense personnel cost:

A November report prepared by Jim Arkedis of the Washington-based Progressive Policy Institute (PPI) put projected 2010 costs at $59.7 billion: defense health program ($28 billion); military health care ($21 billion); and retiree health benefits ($10.7 billion).

Arkedis of the PPI said the recent wars have helped push costs skyward.

“You can’t nit-pick the problem away through selective cuts to benefit programs because, first, there’s a core constituency of hard-working military members, families and retirees who depend on them,” he said. “And second, frankly, it wouldn’t solve enough of the problem anyway. The key cost drivers are large-scale military deployments abroad.”

To Arkedis, “The moral of the story is that if you want to control personnel costs, you have to be really careful about which wars you fight – they better be the right ones.”

Read the entire article.

Secretary Gates, Defense Spending and Ship Building

Posted on by The Progressive Policy Institute

In a little-covered address this week at the Navy League Sea-Air-Space Exposition in Maryland, Secretary of Defense Bob Gates stopped just short of ripping defense contractors a new one. Of course, Gates was diplomatic in his admonishment, but the message was clear: we have to be smarter about defense spending, particularly when it comes to the Navy:

These [spending] issues invariably bring up debates over so-called “gaps” between stated requirements and current platforms — be they ships, aircraft, or anything else.  More often than not, the solution offered is either more of what we already have or modernized versions of preexisting capabilities.  This approach ignores the fact that we face diverse adversaries with finite resources that consequently force them to come at the U.S. in unconventional and innovative ways.  The more relevant gap we risk creating is one between capabilities we are pursuing and those that are actually needed in the real world of tomorrow.

Considering that, the Department must continually adjust its future plans as the strategic environment evolves. …

[W]e have to accept some hard realities.  American taxpayers and the Congress are rightfully worried about the deficit.  At the same time, the Department of Defense’s track record as a steward of taxpayer dollars leaves much to be desired. …

[I]t is important to remember that, as the wars recede, money will be required to reset the Army and Marine Corps, which have borne the brunt of the conflicts.  And there will continue to be long-term – and inviolable – costs associated with taking care of our troops and their families.  In other words, I do not foresee any significant increases in top-line of the shipbuilding budget beyond current assumptions.  At the end of the day, we have to ask whether the nation can really afford a Navy that relies on $3 to 6 billion destroyers, $7 billion submarines, and $11 billion carriers.

Talking tough on spending has been a theme for Gates.  While much of the problems he identifies will continue to exist for years, beginning this conversation is a critical signal that will eventually — think decades — change the way the Pentagon does business. He knows this, and he also knows that this idea won’t be solved on his watch. But if he doesn’t start talking about it, who will?

If you’re looking for a good suggestion about how to buy weapons more sensibly, read Jordan Tama’s excellent Memo to the New President, where he calls for a BRAC-style commission to propose a weapons budget each year.

Gates’ whole speech is worth a read, so check it out here.

Photo credit: https://www.flickr.com/photos/smwalton73/ / CC BY-NC-SA 2.0