Posts Tagged ‘ Congress ’

The New Era of “Leapfrog Politics”

Monday, November 1st, 2010
Lee Drutman



Lee Drutman is a senior fellow and the managing editor for the Progressive Policy Institute.

by Lee Drutman

Imagine you are taking a shower. The water is too cold, so you turn it a little to the hot side. But hot turns out to be too hot, so you turn it a little to the cold side. But then cold turns out to be too cold.  So you turn it back a little to the hot side, only for it to be too hot again. But no matter how you adjust, you can’t seem to find that nice comfortable middle temperature.

That seems to be about the dilemma a majority American people face with regard to their representatives in Congress. According to a new analysis of voters and their members of Congress, an estimated 90 percent of voters are less extreme than their elected representatives. Or put another way, only one in ten voters are more extreme then the folks representing them in Washington, DC.

But the problem is these 90 percent voters don’t have centrist candidates to choose from. Instead, they go from electing representatives who are too conservative for them, to electing representatives who are too liberal for them, to too conservative for them, every now and then trying to adjust, but always quite unsucessfully.

The authors of this analysis, Dartmouth political scientists Joseph Bafumi and Michael C. Herron, call this process “leapfrog representation” – since the median voter keeps getting leapfrogged when seats change parties. And what’s more compelling is that according to their analysis, even the median voter within each party is more moderate than the representatives.  (If you want to know more about how they got these results, you can read a more detailed article I wrote about the study, or for the technically inclined, the authors’ academic version.)

One of the other neat things about this study was that the researchers were able to show that voters who also contribute to campaigns tend to be more extreme than those who don’t. Though they don’t have the data to prove this for sure, it does suggest that money may be doing some of the work of driving extremism. If you assume that money is important (a pretty safe assumption), it makes sense that candidates who appeal to extremes can raise more money, which helps them greatly at the early stages of a campaign when money is probably most important.

All of this, of course, makes for pretty depressing reading. It suggests that we are in a period of “leapfrog politics,” in which the moderate, middle-of-the-road voters who make up the majority of the electorate are going to keep switching from too liberal to too conservative, never quite able to find that happy medium ground (like the poor shower-taker switching from too hot to too cold).  But it is a helpful way of understanding what’s going on, and a quite powerful analysis.

Photo credit: Davide Repucci

Four Days to Go and a Million and One Questions

Friday, October 29th, 2010
Ed Kilgore



Ed Kilgore is a PPI senior fellow, as well as managing editor of The Democratic Strategist, an online forum.

by Ed Kilgore

Four days from Election Day, this exceptionally turbulent cycle is drifting to a close with a lot of uncertainty about specific races, but a growing consensus about the most likely overall outcome.  Republicans are probably going to take control of the House, but not by as large a margin as Democrats currently hold, and Democrats are probably going to hang onto control of the Senate by the skin of their teeth.  Republicans will definitely make notable gains in governorships, offset by some Democratic takeovers.

The size of the current Democratic majorities in both Houses of Congress will make the “net gain” totals for the GOP look especially large, but the actual two-party vote in House contests will be close; Republicans continue to benefit from an advantage built into the last round of redistricting.  The Senate results will be somewhat distorted by the favorable landscape for Democrats this year, with a disproportionate number of Republican seats up for re-election and a large number of Republican vacancies.  It’s hard to remember this, but throughout much of 2009, Democrats thought they had a decent chance to actually gain Senate seats in 2010.

Looking at the House more specifically, the most prominent rating services are roughly congruent.  The Cook Political Report shows exactly 100 competitive races (tossups and “leans”), with 92 of them in districts currently held by Democrats, which shows how heavily the landscape is tilting this year.  In addition, Cook rates seven Democratic seats (all of them open) as “likely R,” or noncompetitive.

Of the 100 competitive races, Cook rates 27 as Lean D, 23 as Lean R, and 50 as tossups.  This would suggest absolutely minimum gains of about 30 seats for the GOP, with 50 more likely, and 70-80 not outside the realm of realistic possibility.

Similarly, Stu Rothenberg has 107 seats—98 Democratic and 9 Republican—“in play;” his more complicated rating system has 18 rated “Democrat favored,” 12 “Lean Democrat,” 6 “Tossup Tilt Democrat,” 18 “Pure Tossup,” 24 “Tossup Tilt Republican,” 10 “Lean Republican,” and 19 “Republican Favored.”  This would suggest Republican gains in the neighborhood of 50-60 seats.

Nate Silver’s projections for FiveThirtyEight are done in terms of probabilities, and he currently predicts a Republican net gain of 53 seats.   For purposes of comparison, Republicans gained 54 net seats in 1994.

Because Silver’s system is so precise, his projections offer a good context for looking at the composition of the most likely Democratic incumbent losers.   Of the 46 incumbent Democrats that Nate shows having a better-than-even chance of losing, 21 are members of the Blue Dog Coalition (another five open Democratic seats likely to flip are currently represented by retiring Blue Dogs, so the Coalition will definitely take a hit).

Moving on to the Senate, depending on the source, there are somewhere between seven and 11 races considered highly competitive at this point.  IL, WA, CO, WV and NV are considered the true tossups; all are currently Democratic seats.  Alaska has suddenly joined the unpredictable races, with a turbulent three-way contest involving Republican Joe Miller (who’s been dropping in the polls lately), incumbent write-in candidate Lisa Murkowski, and Democrat Scott McAdams.   Some analysts consider PA a tossup, thanks to polls showing Joe Sestak gaining on Pat Toomey.  And some polls show Russ Feingold making a late surge against Ron Johnson in WI, though others show Johnson comfortably ahead.  Republicans haven’t given up on California candidate Carly Fiorina, though Barbara Boxer seems to have solidified a narrow lead.  There’s even some speculation that a late shift in votes from Democrat Kendrick Meek to independent Charlie Crist could put Florida back in play.

Barring some upset (e.g., California), Republicans would have to sweep the tossup states and avoid any nasty surprises (e.g., Alaska, WI, PA) to pick up the ten seats needed to gain control of the Senate.  The more likely outcome is between seven and nine pickups; the higher number would almost certainly spur talk about the possibility of luring Ben Nelson or Joe Lieberman to join the GOP Caucus and put Republicans over the top.

Among governorships, the big trend is towards reversion of red and blue states towards their natural majority party, mainly thanks to retirements; WY, KS, OK and TN are certain to replace Democratic governors with Republicans, while CT, CA, HI and MN are moving in the opposite direction.  Republicans are also benefitting from a trend against the party of unpopular incumbents in more competitive states, notably MI, PA and WI (though the latter two races remain competitive).   A pro-Democratic countertrend in two southern states, GA and SC, looks likely to fall short, though GA is close enough that an upset (or more likely, a forced runoff) is possible.

The real barnburners are in FL, where Democrat Alex Sink and Republican Rick Scott appear to be in a dead heat; OH, where incumbent Democrat Ted Strickland is making a late move against Republican John Kasich; RI, where independent former-Senator Lincoln Chafee is now favored in a three-way race;  OR, where former Gov. John Kitzhaber and Republican Chris Dudley are virtually tied in most polls; ME, another unstable three-way race where Republican Paul LePage appears to have an advantage; VT, where Democrat Peter Shumlin and Republican Brian Dubie are deadlocked; IL, where incumbent Democrat Pat Quinn has recently closed the margin held by Republican Bill Brady.   Some would add WI, where some polls have Democrat Tom Barrett gaining late on Republican Scott Walker; and most improbably, Colorado, where a couple of polls have shown third-party immigrant-basher Tom Tancredo moving up rapidly against Democrat John Hickenlooper thanks to a collapse in support for GOP nominee Dan Maes.

Overall, Nate Silver projects Republicans picking up twelve governorships and Democrats picking up seven.

The big imponderable for Tuesday is, of course, turnout, and political junkies will be looking closely at the final generic ballot polls that will come out over the weekend and Monday for clues of late trends.  In a variety of big states (notably Colorado, California, Washington and Oregon), heavy-to-near-universal early voting is a factor.  And for those hoping for an early election night, it’s worth remembering that the state most likely to determine control of the Senate, Washington, allows votes postmarked by election day to count, which sometimes means close races are not resolved for weeks.  And if the Alaska Senate race is close and matters, get ready for extended confusion and perhaps litigation over write-in votes.

photo credit: oceandesetoiles

How To Pay For High-Speed Rail

Tuesday, September 28th, 2010
Lee Drutman



Lee Drutman is a senior fellow and the managing editor for the Progressive Policy Institute.

by Lee Drutman

President Obama has been quite supportive of building high-speed rail. In January he announced an $8 billion down payment. But that was just a start. Building high-speed rail is a major investment, and the big question is: how will we pay for it, especially in a time of increasing federal deficits?

PPI Fellow Mark Reutter has some ideas, and he writes about them in a new policy memo that PPI is releasing today. The memo is called: “ A smart way to finance high-speed rail: Restructuring the Highway Trust Fund into a results-driven transportation fund.”

Reutter argues that the money should come out of a cleaned-up Highway Trust Fund, which is currently larded with strategically aimless and costly programs:

Congress could easily allot $5 billion a year for HSR construction – without an increase in the gas tax – by cutting out earmarks and formula-based grants that now soak up billions of dollars, according to the General Accountability Office (GAO). Such fund reallocations could not only jumpstart HSR projects but serve as seed money to public-private partnerships to get the work done.

Although the Highway Trust Fund was once an elegant solution to funding the construction of the Interstate Highway System with gasoline taxes, it has over the years become more and more just a source of political pork.

Reutter thinks it’s time we use the almost $300 billion authorization (over six years) for building up genuine high-speed-rail routes. To that end, he makes seven specific policy recommendations for the next Highway Trust Fund re-authorization replacing the current authorization due to expire at the end of 2010.

  • Change the name of the Highway Trust Fund to the Surface Transportation Trust Fund to better reflect its new mission for the 21st century.
  • Allocate at least $5 billion in Trust Fund money in 2011 to HSR construction, with special emphasis on getting a demonstration high-speed line between Tampa and Orlando completed by 2015. (The Florida line received $1.25 billion in federal stimulus grants, but is still short of its $2.6 billion budget.)
  • Increase HSR expenditures in years 2012-15 (if a five-year spending bill is enacted) to reflect the increased demand for grants as more states develop passenger rail plans.
  • End the bureaucratic separation of highway and rail programs by establishing a team of planners to develop a HSR network in coordination with future highway building and restoration.
  • Direct the U.S. Department of Transportation and state authorities to examine routes where HSR could use Interstate and other publicly owned highway corridors for rights of way. This approach, already being used in the Tampa-Orlando corridor, would greatly lower land acquisition costs for new rail lines.
  • Base federal transportation decisions on clear analytic measures of performance rather than earmarks – and competition between states instead of preset formulas – to produce the greatest return on taxpayer dollars.
  • Ensure that HSR, which uses about 20 percent less energy per passenger mile than automobiles, gets its fair share of any future revenues generated by carbon pricing.

Reutter also explores ways that policymakers can leverage private capital to augment public spending.

One approach is assembling land around potential HSR terminals for sale to private companies either operating or putting up part of the capital costs of HSR building.

Another is to encourage overseas operators with proven track records to invest in U.S. projects, at least initially, to allow U.S. companies to “learn the ropes” of building these highly sophisticated systems.

Ultimately, though, it’s going to take real political leadership. As Reutter concludes:

The Obama administration has repeatedly talked about its commitment to “green” technology and how fast trains could provide job growth and business opportunities to regions hard-hit by the loss of manufacturing. The administration needs to seize the initiative and make the case for HSR funding during the fall election cycle and in the next transportation reauthorization bill.

Reutter will be discussing high-speed rail Wednesday at a panel on “Keeping America on Track: The Future of High-Speed Rail,” which is part of the 2nd Annual North America Strategic Infrastructure Leadership Forum, co-sponsored by PPI.

No Compromise from Obama on Bush Tax Cuts, Except Dividends

Tuesday, September 21st, 2010
Scott Thomasson



Scott Thomasson is the economic and domestic policy director for the Progressive Policy Institute. Follow @st_ppi

by Scott Thomasson

President Obama stood his ground on his tax plan during Monday’s CNBC town hall forum, arguing that he can’t make the math work for both keeping the deficit in check and giving away tax breaks to the richest two percent of Americans.  When asked about possibilities for compromise, including cutting rates for households with incomes between $250,000 and $1 million, Obama didn’t flinch and stuck to his talking points.

So it sounds like the President’s position on the Bush tax cuts is one he’s taking to the people on Election Day, rather than taking to the Hill for negotiation and deal-making.  He also brushed off a question about a payroll tax holiday, so it doesn’t sound like that idea will be on the table between now and November either.

Obama did make a strong statement about keeping a portion of the Bush tax cuts that would apply to the wealthiest Americans: reduced rates on income from corporate dividends.  He emphasized that he has proposed a 20 percent cap on both dividends and capital gains taxes

If the Bush tax cuts expire without this change, the highest income brackets would pay 20 percent on capital gains, but dividends would be taxed at marginal rates of 39 percent for the top bracket.  So when Obama mentions this 20 percent cap on dividends, he’s actually proposing a sliver of compromise in the tax cut debate. This appears to be the only part of the Bush tax cuts that he’s willing to extend for the top 3 percent of taxpayers.

I have to think that emphasizing the dividend cuts was one of the key messaging items the White House planned for this forum today.  First, it’s CNBC, so the business and investment audience is going to like the idea.

Second, it’s a cut that Republicans can’t possibly oppose, except as part of their pouting-in-the-corner strategy of demanding all the Bush tax cuts or nothing.

Third and most significant is that this isn’t a new position for the administration, but it’s new that Obama himself is talking about it.

It’s the first time I know of that Obama has really spoken out loud about this issue, even though it was included in his budget plan for 2011.  The only time other the administration has said anything about that proposal was when Treasury Secretary Tim Geithner mentioned it on CNBC in July.

On the merits, the idea is a good one.  There are some decent arguments for taxing dividends at the same rate as capital gains to prevent the kind of investment bias that might result from taxing one at nearly twice the rate as the other, as I have briefly argued before. And because the bulk of total dividend payments go to those in the top brackets, their tax rates have a disproportionate impact on investment incentives.

Congress has for the most part ignored dividends in the debate about extending the Bush tax cuts, and the administration has done nothing to inject it into the discussion.  Until today, that is.

It will be interesting to see whether the White House actually pursues a legislative push for this cut, or if this is merely defensive posturing without follow-up to appear more business-friendly before a business audience.  Since it doesn’t have any real champions in Congress, my guess is that we may not hear much more about it, unless a prominent member or two decide to latch on to the idea as a moderate position and call the President’s bluff.

The Three Little Dutch Boys

Thursday, August 12th, 2010
Scott Thomasson



Scott Thomasson is the economic and domestic policy director for the Progressive Policy Institute. Follow @st_ppi

by Scott Thomasson

The economic news out of Washington this week has an eerie ring of déjà vu: Congress just passed an emergency spending bill, the Fed is buying debt securities to keep the economy from sliding toward collapse, and the Administration announced it is committing billions of dollars to mortgage relief for homeowners facing foreclosure. To be sure, none of these actions has the scale or urgency of the initial responses to the financial crisis, but they are perfect examples of the policy philosophy that has dominated both economic policy since the crisis: a focus on playing defense, rather than offense.

What we saw this week were Congress, the Administration, and the Federal Reserve continuing their roles as the three little Dutch boys of the American economy, sticking fingers in the dyke to save the country from disaster. The rhetoric of stimulus is oversold and misplaced: Washington’s fiscal and monetary policies have essentially all been economic tourniquets that are better characterized as containment measures than stimulus. The Fed is shifting into quantitative easing, but only as much as necessary to fight off deflation. Congress is sending aid to the states, but only enough to keep them from having to lay off teachers. Treasury and HUD are providing assistance to the housing market, but only enough to keep people from being kicked out of their houses.

Over and over since the crisis, policy makers in both parties have remained optimistic that the U.S. economy was inherently dynamic and resilient enough that we could rely on growth to materialize from somewhere, as long as we put a solid floor underneath to contain the damage and prevent more negative shocks to the economy. Given the huge amounts being spent and our country’s history from past recessions, this was not an unreasonable approach at the time, especially for those with any concern for fiscal responsibility.

So far, the containment strategy has proved extremely successful in keeping us from sinking into a full-blown depression. However, at this point, we still have farther to go on the path to a sustainable recovery than most economists and politicians had hoped. This morning we got the new jobless numbers, and they aren’t good.  Wall Street was hoping for better news, and the markets’ negative reaction only compounds the growing anxiety (even allowing for the low volume in August, when stocks historically are more vulnerable to bad news). The extended string of bad economic news, coupled with a lack of credible cheerleading from Washington, is creating a palpable crisis of confidence in our economy and our leadership.

While the Fed is signaling between the lines that it may be prepared for stronger action, Congress and the President seem to be headed in the other direction. Campaign politics have lawmakers talking more about contractionary fiscal discipline than taking any new actions to boost the economy. Even in the debate about extending the Bush tax cuts, the options being considered do not include anything stimulative compared to the status quo. Congress has painted itself into a corner by waiting until taxes are automatically set to go up if it fails to act, and now it will likely be forced to extend most or all of them simply to avoid a contractionary fiscal outcome. Again, playing economic defense.

It’s time we think seriously about shifting gears and talking about reasonable stimulus again, instead of waiting for the next hole to plug. As Will Marshall has argued here, keeping public spending and debt under control is critically important, and Democrats need to talk openly about how we prepare for the day of reckoning when the spending claw-backs kick in, since Republicans have lost all credibility on fiscal discipline. However, growth is still the most urgent concern; the signals from bond-market vigilantes are telling us that, as Stan Collander argues well today.

There is a still a place in the debate for looking into additional stimulus, both on the tax side and with additional cost-effective spending. For example, public investment in infrastructure can be used to leverage private capital off the sidelines as well by making the private sector an active partner in stimulus efforts. Instead of continuing to put fingers in the dyke, we need to be more proactive in finding the companies in the private sector who want to rebuild the dyke, and put people and money to work again.

Photo Credit: OliBac’s Photostream

How the Military is Leading the Way on Energy Security

Wednesday, August 11th, 2010
Chris Miller



Chris Miller is a Purple Heart and Combat Action Badge recipient and eight-year U.S. Army veteran, having served two tours in Baghdad, Iraq. He is currently a law student and a fellow with the Truman National Security Project.

by Chris Miller

As a U.S. Army veteran I am used to dealing with the military, an organization that, by necessity, takes swift and decisive action when necessary, despite the fact that many see it as a conservative organization that is resistant and slow to change. In Washington, I am becoming used to dealing with another organization that is much more conservative and even more resistant and slower: the United States Senate. I am proud to say that the U.S. military is once again taking decisive action on energy independence and security, as well as addressing the military repercussions of climate change. The military is taking action where the United States Congress will not.

On July 27 I attended the White House Forum on Energy Security along with a group of veterans from Operation Free, a nationwide coalition of military veterans from all eras and ranging from Privates and Airmen to Generals and Admirals – all of whom support the goal of energy independence, security, and addressing the national security repercussions of climate change.

We have collectively been touring and speaking throughout the country and in Washington, D.C. in support of breaking our dependence on largely foreign oil and pushing Congress to take real steps toward a comprehensive clean energy climate plan. We have come to support the American Power Act developed through a bipartisan effort by Senators John Kerry and Lindsey Graham with Senator Joseph Lieberman and cooperation from the White House.

July 27 was supposed to be the day that the Senate finally took real action on the issue we have all been working hard for over the past year. It didn’t happen. As we all got on airplanes throughout the country in high spirits, something was happening on Capitol Hill: nothing.

By the time we hit ground in Washington, D.C. we learned that everything had changed. The Senate didn’t have the sixty votes needed to proceed to an up-or-down vote on the bill. We went to the Hill again to meet with fence-sitting Senators and their staff. The opinion we encountered there was disappointing, but not surprising: we need to do something about the issues of energy security, energy independence, and climate change, but we’re not going to do anything now.

Some, echoing Republican sentiment, said the issue hadn’t been discussed enough yet, that the Senate process of debate and hearings needs to be completed, that it would force them to choose ‘winners and losers’ and they are not ready to do that.

Hadn’t been discussed enough? We’ve been talking about energy security and independence since the 1970s. Other countries are taking action while we are being left behind. The CIA includes repercussions of climate change and our dependence on foreign fossil energy in its assessments. The State Department does as well.

Now the U.S. military is taking serious steps to address the issue. It devoted an entire section of the 2010 Quadrennial Defense Review Report (p. 84) to responding to climate change issues.  Secretary of the Navy Ray Mabus has expressed a clear vision of a force independent of fossil fuels. The military is taking action by reducing the use of fossil fuels, researching the use of alternative sources, and increasing the efficiency of its energy use, whether on battlefield outposts in Afghanistan or home installations in Texas. Speakers from each branch of the U.S. military have discussed similar opinions, expressing that action on this issue shouldn’t be taken for political reasons, but for security reasons. The money we pay for oil goes to regimes opposed to our interests. The cost of procuring, transporting, and securing that fuel is extreme, in dollars and to the lives of our troops.

This contrasts greatly with the attitude of too many Senators, who continue to choose politics over security. The U.S. Congress trusts the military and veterans on other security issues. Energy independence, energy security, and planning for the possible consequences of climate change are national security issues. The military is taking action, even if Congress won’t. If they’ll listen on other national security issues, let’s hope they’ll trust the military when it comes to a comprehensive clean energy climate plan that makes us energy independent.

Photo Credit: DVIDSHUB’s Photostream

Unflattening Taxes on the Rich

Monday, August 9th, 2010
Ed Kilgore



Ed Kilgore is a PPI senior fellow, as well as managing editor of The Democratic Strategist, an online forum.

by Ed Kilgore

As Congress prepares for a big debate on the fate of the Bush tax cuts, there’s an internal debate breaking out in progressive circles on how to deal with tax rates on the very wealthy, not just those currently in the top income tax bracket.

This debate-within-the-debate is being driven by two external data points: First, the fact that income inequality in the United States during the last two (or arguably, the last four) decades has especially manifested itself in the concentration of wealth at the very top of the income ladder; and second, the fact that higher taxes for “millionaires” consistently polls well.

James Suroweicki explains the first point nicely in a recent column in The New Yorker:

Between 2002 and 2007…the bottom ninety-nine per cent of incomes grew 1.3 per cent a year in real terms–while the incomes of the top one per cent grew ten per cent a year. That one per cent accounted for two-thirds of all income growth in those years. People in the ninety-fifth to the ninety-ninth percentiles of income have represented a fairly constant share of the national income for twenty-five years now. But in that period the top one per cent has seen its share of national income double; in 2007, it captured twenty-three per cent of the nation’s total income. Even within the top one per cent, income is getting more concentrated: the top 0.1 per cent of earners have seen their share of national income triple over the same period. All by themselves, they now earn as much as the bottom hundred and twenty million people. So at the same time that the rich have been pulling away from the middle class, the very rich have been pulling away from the pretty rich, and the very, very rich have been pulling away from the very rich.

The current debate over taxes takes none of this into account.

Thus, framing the tax progressivity question as mainly involving rates for those with incomes well below super-rich levels misses the mark, and, as both Surowiecki and (for months now) Jonathan Chait have pointed out, misses a political opportunity associated with a widespread popular conviction that the very wealthy don’t pay their fair share of taxes.

In terms of the stakes involved in proposing something like a “millionaire’s tax” (essentially a new and higher top rate on very high incomes), Nate Silver has shown at FiveThirtyEight that it could indeed raise some pretty serious federal revenues.

But the political bonus of a “millionaire’s tax” proposal goes beyond the numbers: it would help expose the really dramatic gap between the two parties on the whole concept of progressive taxation.

After all, even as Democrats debate making federal income taxes more progressive, a growing and increasingly dominant segment of Republicans favor “flattening” tax rates to eliminate progressivity, exempting capital and corporate income from taxation, and/or shifting taxation away from income altogether and focusing it on consumption. And even for those Republicans who don’t embrace radical tax proposals, the “thinking” behind them is the rationale for the vague support for high-end or business tax cuts that’s almost universal in today’s GOP, in growing contradiction with conservative demands for debt-and-deficit reduction.

Anything that makes this contrast more vivid, on terms supported by big majorities of the American public, is a pretty good idea for Democrats. So I’d strongly recommend that in the debate over extending or eliminating Bush’s tax cuts for the top bracket, proposals to crate a new bracket for the “super-rich” ought to become an essential ingredient.

This item is cross-posted at The Democratic Strategist

Death of Cap-and-Trade?

Thursday, July 8th, 2010
Nathan Richardson



Nathan Richardson is a visiting scholar at Resources for the Future. The views expressed here are his own.

by Nathan Richardson

When Sen. Lindsey Graham (R- S.C.) recently declared cap-and-trade “dead,” he may have been more right than he realized. Graham was referring to the political prospects for carbon pricing in this Congress, but cap-and-trade has been the tool of choice for limiting emissions of other pollutants — like sulfur dioxide and nitrous oxides — for almost 20 years. The EPA proposed a rule yesterday that could sharply limit the role of trading in markets for those pollutants.

The proposed “transport rule” would replace the existing Clean Air Interstate Rule (CAIR). Both are aimed at reducing emissions that affect air quality not locally, but in downwind areas (hence the “transport” and “interstate” in their names). CAIR was issued under the Bush administration but comprehensively rejected by the D.C. Circuit Court in North Carolina v. EPA. CAIR has been in effect since the ruling, but as a zombie regulation. The EPA needs to replace it with a new rule that fits the court’s view of the agency’s powers under the Clean Air Act. The transport rule released yesterday is the agency’s attempt to do this. The rule is massive — 1,300 pages — and reads like a long-form response to the court’s opinion.

So what does this have to do with cap-and-trade? Among the court’s major objections to CAIR was the inability of the EPA to guarantee each state would reduce its emissions sufficiently to prevent interference with air quality downwind. The emissions trading systems set up by CAIR was to reduce emissions overall, and prevent problematic transport of pollution generally, but the EPA couldn’t promise, as the court read the statute to require, that each and every state would reduce emissions sufficiently. The reason for this is interstate trading. CAIR would have allowed emissions sources in different states to trade with each other. This has obvious benefits, as a bigger market is generally more efficient, but it is impossible to know in advance where the emissions reductions will occur. If it is unexpectedly cheap to reduce NOx emissions in Ohio and unexpectedly expensive in Kentucky, trading will happen and Ohio will make deeper cuts. Knowing in advance where reductions will be cheaper is hard (this lack of information is the reason for having a market in the first place). Generally, this lack of foreknowledge is not a problem, since the overall cost of emissions reductions is lower. Under the court’s reading of the Clean Air Act, however, the agency has to know the outcome in advance, at least at the state level.

The transport rule addresses this by largely eliminating interstate trading. Intrastate trading is still allowed, but the rule would only allow interstate trading at the margin, within relatively narrow “variability limits.” The EPA seems to be doubtful that even this small amount of interstate trading will be permitted by the courts. The new rule lists alternative options that do not include interstate trading at all.

It looks like we’ll be lucky if the final version of the new rule includes any interstate trading. Without interstate trading, the emissions reductions achieved by the new rule will be more expensive than they otherwise would be — possibly a lot more (I look forward to analysis from economists on exactly how much). Since the transport rule would replace both of the major cap-and-trade programs currently in operation in the U.S., this would mean an end to interstate emissions trading, at least for the 31 states affected by the new rule. It’s only a slight overstatement to say that cap-and-trade as we now know it would end.

It’s hard to accuse the EPA of timidity or error here. The agency attempted in CAIR to create an interstate market and was (somewhat surprisingly) kicked in the teeth for it by the D.C. Circuit. Though I and many other lawyers disagree with the D.C. Circuit’s reading of the Clean Air Act that led it to reject CAIR, the reading isn’t unreasonable, so it’s hard to place all of the blame on the courts either. Congress ultimately has responsibility for either creating markets for pollution reduction, or giving the EPA sufficient tools to create them itself. The transport rule released yesterday makes it clear that the EPA does not have the tools it needs.

At least some in Congress are aware of this problem, however. The three-pollutant or “3P” bill written by Sens. Carper (D-DE) and Alexander (R-TN) would create new national cap-and-trade markets for SO2, NOx and mercury (a new EPA mercury rule was also rejected by courts). If this bill were passed, it would hopefully include a fourth “P,” carbon, but even without it, the EPA would have the tools it needs. Without it, the transport rule appears to be the best the agency can do. Twenty years after the 1990 Amendments to the Clean Air Act, that should be embarrassing.

This item is cross-posted at Weathervane.

Photo credit: Mhaithaca’s Photostream

School Reform or Edujobs?

Thursday, July 1st, 2010
Will Marshall



Will Marshall is the president of the Progressive Policy Institute.

by Will Marshall

There’s a move afoot in Congress to cut one of President Obama’s most creative and cost-effective reforms – the Education Department’s $4.3 billion Race to the Top fund. Which GOP troglodyte is behind it? Actually, it’s a prominent liberal: Rep. David Obey (D-WI).

Obey, chairman of the mighty House Appropriations Committee, introduced a bill this week to cut $500 million from the fund. He also wants to skim $200 million from the Teacher Incentive Fund, which helps districts set up pay-for-performance systems to reward excellent teachers, and to take $100 million from a pot of money set up to help finance charter schools.

These raids on signature Obama school improvement initiatives are intended to raise $10 billion to help fund the Keep Our Educators Working Act, otherwise known as the “edujobs” bill. It would send federal dollars to the states to prevent teacher layoffs. Pitting jobs against efforts to improve America’s lowest-performing schools is a profoundly bad idea.

Education Secretary Arne Duncan has used the Race to the Top Fund brilliantly to leverage overdue changes in state laws that inhibit innovation in underperforming school districts. To compete for federal grants, states must remove arbitrary caps on charter schools, track students’ educational growth year by year, and include that information in teacher evaluation. The other funds operate on the same principle that the federal government should play a strategic role in education, using small investments to stimulate state and local innovations in teacher compensation and public school choice.

No one wants to see teachers lose their jobs in today’s dicey economy. But no one wants to see firefighters or police or, for that matter, construction workers, sales reps or bank tellers lose their jobs either. With unemployment stuck near 10 percent, Congress has a clear moral responsibility to extend unemployment and transitional health care benefits. But what’s the rationale for singling out teachers for a special measure of job protection?

What’s more, Obey and his liberal allies have not tied the extra money to changes in the way school districts conduct reductions in force. Most districts use the last-in-first-out (LIFO) method, in which teachers with the least seniority and lowest salaries are dismissed first. LIFO thus reinforces a tenure system that ties compensation to years on the job irrespective of job performance, and that deters more talented people from becoming teachers. It also means that the cost of overall spending on teacher salaries will rise faster than if reductions in force had been made across the experience spectrum.

If edujobs is bad policy, it’s worse politics. It practically begs conservatives to charge that Democrats put the interests of the adults in public education over the interests of the kids.

It happens, however, that that’s not true. Obey’s proposal has sparked strenuous objections both from the Education Department and from progressive school reformers in Congress. “If we are to meet the President’s goal of becoming global leaders in college graduates by 2020, we must rethink and reinvent our approach to education by moving forward with bold reforms,” Rep. Jared Polis (D-CO) wrote in a letter to his colleagues. “Unfortunately, the proposed cuts represent a major step backward.”

Obey is a liberal lion who is retiring after a long career in Congress at the end of this term. Polis is only a freshman, but he’s right, and progressives ought to rally behind the president’s efforts to fix America’s broken schools.

Photo credit: House Committee on Education and Labor’s Photostream

RIP Robert Byrd

Monday, June 28th, 2010
Ed Kilgore



Ed Kilgore is a PPI senior fellow, as well as managing editor of The Democratic Strategist, an online forum.

by Ed Kilgore

It’s been a tough year for the Democratic tradition in the U.S. Senate, with the loss of Edward Kennedy and the solidification of the Almighty Filibuster as the real power in the institution. But the death of Sen. Robert Byrd of West Virginia really does turn a lot of pages, while denying the Senate its unrivalled historian and parliamentarian.

Byrd’s tenure alone makes him one of the titans of Senate history: more than a half-century, spanning the administrations of eleven presidents. He was, however, the junior senator from West Virginia until he was 68, and in another reflection of the Senate’s slow pace of change, his career overlapped with only five Democratic leaders — not counting Byrd himself.

When Byrd was first elected to the Senate in 1958, Democrats from his corner of the world were typically hard-core segregationists and equally hard-core New Deal economic progressives. He abandoned and apologized for the former habit, but never the latter. The persistent poverty of West Virginia — for much of career it included some of the very poorest areas of the country — made it one place where politicians never shrank from the full exercise of power on behalf of the home folks, or from celebration of the seniority system that gave Byrd and so many others the clout to serve as equalizers. Byrd became the embodiment of Senate traditions for good reason: they served his constituents well.

He survived wave after wave of efforts in both parties to change the Senate and make it more responsive to national political trends, and might well have survived one or two more had he been born 10 years later. He also survived wave after wave of efforts to bend Congress to the will of presidents of both parties, and in that respect was more consistent than most of his colleagues in both parties.

In this era of political turbulence and simmering resentment of professional politicians, it’s unlikely America will ever see another senator like him. And so in a very real sense a big part of national history will go to the grave with him. His distinctive and authoritative voice will be missed, and may he rest in peace.

This item is cross-posted at The Democratic Strategist.

Photo credit: cliff1066™’s Photostream

Time for a One-Two Punch for Campaign Reform

Tuesday, June 1st, 2010
Daniel Weeks



Daniel Weeks is the president of Americans for Campaign Reform.

by Daniel Weeks

In its recent Citizens United v. Federal Election Commission decision, the U.S. Supreme Court ruled that corporations and unions are entitled to the same First Amendment freedoms as flesh-and-blood human beings, thereby overturning decades of settled law limiting corporate influence in elections. With political analysts predicting a torrent of new spending by special interest groups in the fall elections, congressional leaders are advancing new legislation aimed at blunting the worst effects of the Supreme Court ruling.

Introduced by Sen. Chuck Schumer (D-NY) and Reps. Chris Van Hollen (D-MD) and Mike Castle (R-DE), the DISCLOSE Act would place commonsense limits on corporate independent expenditures and require CEOs and major funders to take credit for the political ads they make. The legislation rightly restricts electioneering expenditures by corporations with a significant foreign ownership stake, as well as those that benefit from large-scale government contracts or bailouts. In addition, the legislation would greatly increase transparency and disclosure requirements on corporations, unions, trade associations and other incorporated entities, bipartisan measures that are in accordance with our long tradition of constitutionally protected disclosure.

While the design of specific provisions, including the appropriate threshold for government contractor restrictions, is open to debate, the DISCLOSE Act represents a necessary first step to stem the anticipated flood of special interest money post-Citizens United. Democratic leaders have promised swift action and a House vote on the legislation after the Memorial Day recess.

But Congress cannot content itself with incremental fixes to a system of special interest funding that’s rotten at the core. Fundamental reform of the nation’s pay-to-play system will not come by imposing new limits on private campaign spending, but by changing the very source of money that funds campaigns. Bipartisan legislation to establish a new system of citizen-funded elections has already gained the support of 175 members of Congress and dozens of grassroots organizations representing millions of concerned citizens from across the political spectrum.

Under the proposed Fair Elections Now Act, congressional candidates who attract a broad base of public support would be eligible to receive matching federal dollars if they agree to forego special interest money and raise only small donations from their constituents. A four-to-one match on in-state donations of $100 or less would ensure that serious, hardworking candidates have the funds they need to mount a competitive campaign, even when opposed by wealthy individuals or groups.

Indeed, academic analysis of the relationship between congressional campaign spending and election outcomes has consistently found a competitive spending threshold below which candidates are unable to effectively compete and above which additional spending produces negligible returns. Candidates running for the U.S. House between 1992 and 2006 required between $1 million and $1.5 million (in 2006 dollars) to mount competitive campaigns, while spending beyond that threshold did not measurably increase the likelihood of success.

By giving small donors an incentive to invest in political campaigns and rewarding candidates who demonstrate broad public support — regardless of wealth — such a reform has the potential to rein in undue influence by special interest groups and restore the public’s trust. And far from imposing new limits on political speech, the Fair Elections Now Act would expand free speech by enabling new voices to enter the political debate regardless of wealth.

Congress is presented with an historic opportunity to right the wrongs of an activist Supreme Court with a one-two punch for reform: by passing an evenhanded DISCLOSE Act to increase transparency and accountability on the part of corporate funders of political speech, and by passing the Fair Elections Now Act to ensure that elections for public office are owned by the American people, not wealthy special interests. Let’s hope they’re up for the fight.

Photo credit: Dbking’s Photostream

Congress Puts the Breaks on Iran Sanctions – But Is the UN’s Deal Any Better?

Thursday, May 27th, 2010
Jim Arkedis



Jim Arkedis is the director of PPI's National Security Project.

by Jim Arkedis

The Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2009, a potentially counterproductive Iran sanctions bill working its way through Congress, has been delayed. Versions of the law had been passed by both houses and were being reconciled in conference committee. A staffer I spoke to a few weeks ago suggested that the bill would be signed by Memorial Day.

But no longer. My friend Brian Wingfield at Forbes reported this week that bill sponsors Sen. Chris Dodd (D-CT) and Rep. Howard Berman (D-CA) have delayed their bill for at least a month.

A delay, and potential scuttling of the law, may not be the worst thing in the world. Read Pirooz Hamvatan’s and Ali K‘s piece on P-Fix a few weeks ago, where they point out the current bill’s flaws:

The new bill aims to cripple Iran’s economy in response to Iran’s refusal to halt its nuclear program. But the sanctions being proposed are not the right answer. Such a sweeping measure would end up only hurting ordinary Iranians, especially the middle class that the U.S. must shore up to improve Iran’s chances for reform.

The delay is thanks to the UN Security Council, which announced it had reached a multilateral sanctions deal with China and Russia. Dodd and Berman say they preferred the multilateral approach all along, and seem content to let that process play out. Both China and Russia have been reluctant partners, so the deal is a potentially big diplomatic win for the Obama administration.

However, it raises the question — why would these holdouts acquiesce to the UN sanctions package now? Did they suddenly see the light? With all the exemptions and loopholes for Chinese companies, it’s doubtful in at least Beijing’s case. Check out this TIME article for a good explanation:

Beijing extracted a significant price for its support. Not only has Beijing watered down the sanctions to be adopted by the Security Council in order to ensure they don’t restrain China from expanding its already massive economic ties with Iran; Chinese analysts also claim that, in the course of a protracted series of negotiations with Washington, their government also won undertakings from Washington to exempt Chinese companies from any U.S. unilateral sanctions that punish third-country business partners with the Islamic Republic.

The Russians must have not gotten such a great deal. Iranian President Ahmadinejad singled out Moscow as a “historic enemy” for supporting UN sanctions, but seems to have forgotten to mention Beijing.

In the end, we’re left with a potentially counterproductive bill out of Congress, or an imperfect UN package. I’ll take the UN version any day of the week — even though Chinese companies get exemptions, it’s better to forge a strong international coalition against Iran’s nuclear program.

And members of Congress who supported that bill can still campaign on their vote, whether or not it ever gets to the president.

Photo credit: Daniella Zalcman/ CC BY-NC 2.0