Finally, a Ruling in Long Fight Against Power Industry

When President Obama surprisingly gave the go-ahead to Environmental Protection Agency chief, Lisa Jackson, to announce new rules restricting mercury and other heavy metal emissions from 600 U.S. power plants, it was at once a reversal of his blocking ozone controls in September that outraged environmentalists, and the outcome of a decades-long battle with the industry. We’ll look into the ruling’s likely fallout, but first a quick history:

The Clean Air Act is 41 years old. Immensely popular among the public, it was signed into law by Richard Nixon in 1970. Industry has been fighting it ever since.

Early on, the Act was relaxed, requiring energy companies to retrofit their plants with pollution controls only when significant modifications beyond “routine maintenance” were made. That was in deference to the great expense that immediate and unconditional replacement would have caused.

But the industry chafed under even this accommodation, referred to as “New Source Review”, often disguising major construction as “routine”. The Reagan administration was, of course, averse to regulation enforcement, so only in the Clinton years did the EPA take action against the industry’s subterfuge. It initiated investigations that led to lawsuits against 51 power plants for violating the Clean Air Act.

When George W. Bush took office, Vice President Dick Cheney huddled with energy executives in an infamously secret meeting (that excluded any environmental representatives) to set energy policy. One outcome was that the lawsuits were dropped. The energy companies had been some of the biggest Bush campaign contributors.

The Bush administration in 2005 set about revising sulfur dioxide and nitrogen oxide rules downward, but the courts in 2008 ruled the changes to be in violation of the Clean Air Act. Only now is the Obama administration putting the regulations back on track.

Stated simply, a large swath of the energy industry has successfully fought off the cost of installing pollution controls for decades to the detriment of the environment and public health. To dispute that, one would have to argue that coal is a clean fuel.

Plant closings and job losses?

Some in the energy industry threaten that power shortages could be the result when a raft of companies elect to shutter older coal-fired plants deemed not worth the cost to retrofit with pollution controls. Many of these plants are a half-century old, inefficient and costly to operate and are on the verge of being decommissioned anyway — in fact, required to close under the court settlement with the Bush administration.

A newly emerging reason, as reported by the Wall Street Journal is that coal is losing out to “cheap and abundant natural gas…from shale-rock formations in the U.S.” Utilities are closing old coal-fired plants to switch to natural gas-fired plants — and they emit half the CO2 and a fraction of coal’s other pollutants.

The outcry comes from the coal industry in league with a rearguard of companies that have fought modernization as a way to squeeze the most from obsolete plants. The EPA expects costs to the consumer to rise by only 3%. That obscures the likelihood of much higher rates in those states served by the old-line plants that never modernized.

Republicans in Congress threaten legislation to block the EPA’s rules (the House has developed some forty-and-counting riders to bills that are meant to prevent the EPA from issuing any regulations). Here’s Oklahoma Senator James Inhofe, the minority leader on the Environment and Public Works Committee, who vows legislation to overturn the ruling:

“This rule isn’t about public health. It is a thinly veiled electricity tax that continues the Obama administration’s war on affordable energy and is the latest in an unprecedented barrage of regulations that make up the EPA’s job-killing regulatory agenda”.

This pays no regard to the construction jobs that will be created to bring power plants into compliance. Scott Segal, of the trade group Electric Reliability Coordinating Council, claims a net job loss of 1.44 million, citing a study by a “very reputable economic consulting firm”. To arrive at such a number requires the assumption that the lost spending power of a single furloughed employee from a power plant sets in motion a cascade of job losses elsewhere among people somehow entirely dependent on the original lost wages. John Walke of the Natural Resources Defense Council calls the study “notorious” and says it “just proves the adage that lobbyists can pay consultants to say anything in Washington.”

That the energy industry’s protests are not universal suggests that some prefer a final ruling to uncertainty. The CEO of one of the largest utilities, Public Service Enterprise Group, said the EPA rules — formulated over 20 years — are “long overdue”. Close to half the country’s more than 400 coal-burning plants have already outfitted emission controls in varying degrees and a third of the states already have set their own standards for mercury.

But if the new rules do hasten the shutdowns, that could result in closures before replacement power sources come on line. An industry report of November 2010 said that hundreds of coal, gas and oil-powered plants with a collective capacity of 70,000 megawatts could be shuttered if new rules were implemented too quickly. Segal argues, “it doesn’t make sense to try and retire all of them simultaneously, and in so doing endanger about 8% of U.S. electricity. That’s like taking three states offline”. The EPA counters, predicting much fewer plant closings (in a universe of 600 that the EPA says are affected, the “hundreds” in the industry report seems greatly exaggerated) and gives the industry five years to comply, with extensions when companies demonstrate why they need extra time.

breathing easier

The ruling is expected to reduce emissions of toxic substances by 90%, giving the EPA a strong claim to the health benefits it cites, notwithstanding Senator Inhofe’s counterclaims. The EPA estimates that the public will be spared 11,000 deaths and many more illnesses a year. Mercury is especially hazardous for women in their child-bearing years, for their fetuses when pregnant, and for children in general. Mercury emissions land in lakes and rivers and are taken up by the fish we eat, leading to potential neurological disorders and diminished IQs in children.

Whereas mercury is the element most cited in connection with the rule, the regulations will cut emissions of a suite of toxic substances:   EPA Administrator Jackson lists arsenic, cadmium, chromium, cyanide, hydrochloric acid and hydrofluoric acid.

The industry trade group disagrees, saying soot is the cause of the health problems, and that soot is already well-controlled. “The incremental health care benefits associated with this rule in our judgment are virtually zero”, says Segal.

The EPA estimates the annual cost of compliance at $10 billion a year compared with $100 billion in alleged costs of hospital visits and lost time on the job. It’s hard to know how such accuracy can be ascertained. But the president of the American Academy of Pediatrics, who stood with Ms Jackson when the intended rule was first announced, said, “If you think it’s expensive to put a scrubber on a smokestack, you should see how much it costs to treat a child over a lifetime with a birth defect”.

The President’s scorecard, compared with his campaign pronouncements, improves with this announcement. It comes in addition to July’s ruling — the inter-state rule — that limits sulfur dioxide emissions that the winds carry to other states — the so-called acid rain that settles in water bodies and destroys fish populations. That and the scheduled auto emission standards amount to a trifecta of winnings.

Now Playing in Congress: The Payroll Tax Follies

Just when you thought the Congress of the United States could not possibly make a bigger fool of itself, its members staged a sequel to the debt limit debacle when at year-end they could not resolve the payroll tax issue. Much more concerned with flying home for yet another of its extended vacations, the Senate voted a short-term stopgap continuance of the reduced payroll deduction, which in two months would have them lock into a scrum and kick the ball back and forth all over again.

Whereupon the House signaled that it would not pass the bill, objecting to the Senate’s stripping unrelated measures. In other words, piqued over removal of cherished items that were intended to cut spending still more and thwart the administration’s anti-pollution rules, Speaker John Boehner and Tea Pary Republicans House memers showed their willingness uncharacteristically to allow a tax increase that would affect every employee in the land. That’s different.

If the bill does not pass, it will mean a reversion to the 6.2% deduction from payroll in place of the 4.2% that taxpayers have enjoyed through all of 2011. Putting more money in their pocket was meant to encourage spending that would purportedly create jobs, although there is disagreement about the efficacy of this approach. It will mean that a family earning $50,000 a year will net $1,000 less in 2012. Two things, though: cancellation of a tax moratorium is not the same as a tax increase. It was a windfall that taxpayers should not expect to continue unless Social Security in their future doesn’t matter to them. And let’s remember that, by definition of “payroll tax”, these are people who at least have jobs.

There are reasons that allowing the reduction to lapse might be just as well. First, the Social Security fund is inappropriately made to pay for this taxpayer bonus with no sign of payback. Second, and a bigger reason, when will this stop? Which party will champion the return to the 6.2% deduction, angering taxpayers? If the special reduction continues, its termination will become viewed as a tax increase. Will this not become an every-year event, with Congress locking horns with the administration, especially if Obama is re-elected? Will we not be breeding a host of Congressional deadlocks, with a perfect storm at the end of 2012 when: (1) the debt limit agreement reaches its end, as does (2) the two-year renewal of the Bush tax cuts, and (3) the annual scuffle over the payroll tax that we are predicting.

That should be enough to spoil Congress’ Christmas vacation next year.

This all started when, with every other proposal of his September jobs appeal to Congress thwarted, the President had at least managed to twist Republicans into the unheard of position of refusing a tax cut when he proposed that the payroll tax be trimmed again for 2012, this time by 3.1% (originally for both employees and employers) rather than 2.0%. Realizing that allowing the tax reduction to lapse would infuriate voters, Republicans had to go along with Obama’s wishes.

But for a price. The House tacked on a provision that would force a go-ahead on the Keystone XL pipeline, the decision on which the President, fearful of angering environmentalists (see related story), postponed until after the election. “The American people want jobs” that the pipeline would provide, says House Speaker Boehner. The Senate turned that into a proviso that Obama must decide on Keystone XL in 60 days. Obama caved and said he would — a nervous tic of his. That was before Boehner and the House defied the Senate.

But the pipeline will be in the payroll tax bill once again in two months, and the President will allow it to be fast-tracked; somehow two months of review rather than a year will magically prove to be sufficient to allay all concerns. Credit for the payroll tax cut will accrue to him, thanks to Republican blundering, and he’ll figure that angry environmentalists will have nowhere else to turn come November.

turning the tables

As to the payroll tax, we have a heretical idea which would nicely solve the problem of the Social Security Administration having to foot the bill for all this political largesse.

First, the payroll tax is our most regressive tax by far. A higher percentage of one’s annual income is paid by lower income workers than by those making higher incomes. That is because it is levied against every dollar earned by the average worker, but is no longer subtracted once anyone’s income passes $106,800 during a calendar year, no matter how large that income becomes. The more money one makes, the less the tax as a percentage of income, until it ultimately shrinks to infinitesimal. At the extremes, those investment bankers and corporate CEOs who are paid, say, $10,000,000 in a year are done paying their Social Security tax on January 4th, after just three days on the job, whereas the average working stiff pays it all year long. And those who make their money from investments rather than a paycheck pay nothing at all.

So to keep Social Security money coming in, how about this idea? OK, it’s whimsical, but ethically satisfying. For all these years, ever since Social Security began, those who made more than the cutoff — this year’s $106,800 — have had a free ride on that extra income. During these difficult times when the payroll tax is so burdensome for the average citizen, why not turn the tables. Charge no payroll tax at all until the $106,800 is reached; then charge the 6.2% only on all income that exceeds that threshold. Employee only.

It’s a perfectly fair idea that does something to redress the inequities that have favored higher income people for so long. Of course, it will go nowhere in Congress. But their protests and its defeat would demonstrate how Congress “coddles” those who make the most money, to use Warren Buffett’s word, and we would get to watch the comedy of whatever contorted logic they come up with to justify their opposition.

With Occupy Protesters Dispersed, What Next?

Commentators who criticized the Occupy Wall Street movement for not having a specific policy agenda failed to grasp the movement’s more potent message — the general anger at a corrupted government and an economic structure rigged against them that mere policy tweaking would not fix.

This inchoate national malaise has brought greater attention to a host of organizations that seek to bring about change — anathema to the two political parties, beholden as they are to special interest money. These are not your left and right groups such as MoveOn.org and FreedomWorks, or the coalition of progressive groups under the banner of Rebuild the Dream. Our subject is the broader groups that think America needs structural changes, and for that they need widespread support beyond parochial ideologies if they can ever hope to achieve their objectives. The 99%, after all, includes not just the Occupiers. The Tea Party is part of the 99% as well.

Harvard Law Professor Lawrence Lessig has been at the barricades early on with Fix Congress First, which subsequently became Rootstrikers. The curious name derives from Thoreau — “There are a thousand hacking at the branches of evil to one who is striking at the root” — which reflects Lessig’s conclusion that attempting incrementally to fix the nation’s ills no longer works, that we now have a government completely incapable
Congress for sale is the motif of Lessig’s latest book
of addressing and resolving the most fundamental policy problems. Thus, we must attack the root — political campaign funding — which underpins all.

the dormant article V

But how? The only route to overturn the Supreme Court’s rulings, beginning with Buckely v. Valeo and two years ago the catastrophic Citizens United v. Federal Election Commission that opened the door to unlimited corporate money to influence elections, is a constitutional amendment. Lessig, along with co-founder of the Tea Party Patriots, Mark Meckler, convened a conference at Harvard in September to discuss moving toward a first-ever constitutional convention under its Article V. If you are interested in an education in constitutional law, the links at the site to the keynote addresses and panel discussions are well worth the time spent.

Dylan Ratigan, who hosts a show on MSNBC, is another entrant in the campaign to upend the Supreme Court. His website, Get Money Out” has attracted over 250,000 signers and serves up the text of three variations of proposed amendments.

No person, corporation or business entity of any type, domestic or foreign, shall be allowed to contribute money, directly or indirectly, to any candidate for Federal office or to contribute money on behalf of or opposed to any type of campaign for Federal office. Notwithstanding any other provision of law, campaign contributions to candidates for Federal office shall not constitute speech of any kind as guaranteed by the U.S. Constitution or any amendment to the U.S. Constitution. Congress shall set forth a federal holiday for the purposes of voting for candidates for Federal office." Example amendment, this one from Ratigan’s “Get Money Out”

Realizing that a number of organizations redundantly chasing the same goal is likely to be ineffective, both Lessig and Ratigan recently announced that they are joining forces with a larger group, United Republic, in order to create critical mass.

United Republic, found here, is a new and seemingly better funded organization that, like those that have joined it, wants first to get money out of politics and offers what may be its mantra of “democracy should never be for sale”. Its website chronicles the misdeeds of government but is not yet specific about intentions other than to “hold politicians accountable; expose how corporate lobbyists hurt ordinary Americans; build a coalition of supporters from left, right and center; and provide financial support to the best people and organizations”.

Taking an entirely different approach is Americans Elect, with what has to be a first ever approach to a third party. There have been many, but all have been brought into being by a self-appointed candidate such as Robert La Follette, George Wallace, Ross Perot, John Anderson, the irrepressible Ralph Nader, and, of course, Teddy Roosevelt with his short-lived Bull Moose party.

But Americans Elect turns this around. Its two million adherents (and counting) will in April choose a third party candidate for president. Whoever is chosen (and accepts) will then be required to select a running mate either from the opposite party or an independent. The organization is already on the ballot in 11 states, working on 16 more states, and awaiting ballot certification in two others.

This avenue offers the chance of re-birth to candidates such as Ron Paul and Jon Huntsman, and for those disillusioned by Barack Obama, it’s a good bet that Hillary Clinton will score highly. All have been asked and demurred, with Clinton saying the chances of her accepting are “less than zero”. But in politics, one never knows.

But once chosen, the unspoken assumption is that Americans Elect would raise funds from its membership to combat the two money-drenched parties, but we find no indication that this key follow-through is the plan. where — at this late stage — would its candidates

Successfully getting on the ballot in 2012 automatically wins American Elect ballot slots in 2014 and 2016. The approach entirely sidesteps the grotesque imbalance of the primaries, where minor states compete to get ahead of each other on the calendar. Attention should be paid to the method more than the results. However, the Reason Foundation found that 80% of Americans would consider an alternative presidential ticket in the upcoming election. If you are of like mind, participate at sign up here.

amendment ferver

A third party candidate would still be faced with the same campaign finance laws frozen in place by a Congress, most members of which do not deserve re-election, say 76% of Americans in the latest Gallup poll, the highest such percentage Gallup has measured in 19 years of asking this question. The public’s 9% approval rating has spurred some in Congress to climb on the reform bandwagon.

Five senators e-mailed an Internet petition titled “Reverse Citizens United”, asking readers to “support the constitutional amendment to give Congress and states the authority to limit corporate and special interest money in our elections.” It asks that we “stand with” Senators, Durbin, (IL), Merkley (OR), Schumer (NY), Udall (NM) and Whitehouse (RI) — all Democrats ) — but with no text of the amendment they have in mind. We are appenrently to trust them. Their strange appeal seems frozen in time. When revisited at this link weeks after it reached our mailbox, there was no change in the number of signers, stuck at 123,261.

Vermont independent Senator Bernie Sanders is the latest Congressional entrant. He has filed this constitutional amendment that would disallow unrestricted and secret campaign spending by corporations permitted by Citizens United. His View:

”A corporation is not a person. A corporation does not have the right to spend as much money as it wants without disclosure on a political campaign….in order to buy elections. I do not believe that is what American democracy is supposed to be about. In my view, history will record that the Supreme Court’s Citizens United decision is one of the worst decisions ever made by a Supreme Court in the history of our country.”

mandating the money

Presidential races have become interminable. As television journalist Bob Schieffer says, “Our campaigns begin earlier and earlier … Remember when campaigns were the interval between governing? Now governing has become the brief interval between campaigns”. The cost of the permanent campaign now runs to billions, with no sign of that changing. So how would candidates fund campaigns if the big money were prohibited? Would only the richest, such as Michael Bloomberg, be able to run for the office?

Larry Lessig says small dollar funding would work, and proposes this scheme: all voters would pay $50 in taxes but the money would be rebated to them in a form that could only be used as a donation to a presidential or congressional candidate. (Beyond that, there would be a $100 limit for voluntary gifts to any candidate, in place of today’s $2,300). The $50 alone would generate $6 billion per election cycle, and that’s two-and-a-half times the amount spent in 2010.

“Then nobody could believe, when Congress did something stupid, it was because of bribes”, Lessig says. What chance would this have, asked Charlie Rose on PBS? “Under this Congress? Exactly zero. I looked it up in Google”, quipped Lessig. Many in Congress don’t want to change the current system. Capitol Hill has become, as Tennessee Representative Jim Cooper put it, a “farm league for K Street”, because, once out of office, they have their eye on becoming a lobbyist to rake in money. If corporate money no longer influences legislation, the lobbyist industry will dry up. To win money for re-election, our representatives in Washington would at last turn their attention to the public’s concerns rather than to special interests.

1%? How about 0.34%

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