Early coverage of the Cap and Trade bill has focused on the successes of Barack Obama and Nancy Pelosi, although I noted that it was also a success for conservative movement groups.
The biggest concessions went to utilities, which wanted assurances that they could continue to operate and build coal-burning power plants without shouldering new costs. The utilities received not only tens of billions of dollars worth of free pollution permits, but also billions for work on technology to capture carbon-dioxide emissions from coal combustion to help meet future pollution targets.
By not auctioning these permits, Obama lost a huge amount of money for his earlier proposals. Donald Marron notes that this totals about $600b in revenue that this bill didn’t create.
Now think about what Joe Lieberman said yesterday about the health care bill…
Lieberman cited the cost of a public plan as his primary beef with the plan.
"Part of my concern is that, and this goes to the…growing national debt, that inevitably if we create a public option, the public is going to end up pay for it and that’s a cost we can’t take on," he said.
If Obama had come out of this cap and trade debate with an extra $600b, the healthcare debate would look a lot — A LOT — different.
As the scope of the deficit becomes clearer and the political salience of it rises, the cap and trade bill may look like an increasingly poor deal for America, but also the rest of the Obama agenda.