This is the story of how a plan to save the climate and jump start the economy will become a massive corporate welfare program if Congressional Democrats oppose their president and align with the likes of Joe Lieberman and the big business lobby.
We know that to avoid catastrophic climate change we must drastically lower the amount of carbon we are pouring into the atmosphere. President Obama's plan is to put a strict limit on carbon emissions and make large polluters pay for the right to dump their waste into our sky. He wants polluters to buy a "credit" for each ton of carbon they emit.
It's a smart plan that uses a price signal to turn the economy toward clean energy, driving investment, innovation and job creation. It would also raise hundreds of billions of dollars in revenue for the federal government, revenue that should be returned to the American people.
It's no surprise that a lot of businesses oppose any limits on pollution. It's also no surprise that a handful of companies are jockeying to rig any potential policy in their favor.
These companies, among them Duke Energy and General Motors, suggest that they may (or may not) support pollution limits if they are given free carbon credits. These companies know that free credits will be as good as money, redeemable for cash and profitable competitive advantage.
The President's Budget Director has called free pollution credits "corporate welfare." So has the Center for Budget and Policy Priorities, the Congressional Budget Office, and former Bush economist Greg Mankiw, each in their own way.
That's because whether permits are auctioned or given away to companies, the price of energy will increase and money will flow from every American who uses energy to polluting companies. The European Union gave away credits and set in motion a debacle that transferred billions from consumers to companies.
President Obama knows what is at stake. When he spoke this past week to the Business Roundtable -- a lobbying group of big business CEOs -- he told them plainly that a limit on carbon is essential for the environment and the economy, and that he is sticking by his promise to auction 100% of the emission credits.
Which brings us to Joe Lieberman. The day after President Obama stuck by his principles, Senator Lieberman was quoted in the Washington Post promising his support for free credits for huge polluters. Obama stands tall and Lieberman rolls over.
For Lieberman, it is all part of what he calls being a "coalition builder." Apparently this means taking billions of dollars from American families and using it to negotiate with (as in buy off) enormous polluters.
It probably goes without saying that no consumer group is part of Lieberman's coalition. He says that he's working with John McCain.
Unfortunately, more than a few Democratic Senators, including important Senator Jeff Bingaman, (along with a handful of green groups) are towing the Lieberman line, and undermining their own President. The logic used to defend this emerging boondoggle is as twisted as any to emerge from Washington. It is transactional politics at its worst.
Some say it is only "fair" to give these companies free credits since they will be most affected. Right. That's the point. A policy to limit pollution should have its greatest affect on polluters. Besides, we know that these companies will pass their costs onto consumers.
Some say that we just need to work with big utilities. They make the circular argument that we need to take billions of dollars from American families and give them to companies so that those companies won't take billions of dollars from American families. Honestly?
Obama has a better plan. It is a hard limit on carbon pollution, making polluters pay for 100% of the credits, and returning more than 80% of the proceeds to the public through a tax cut that reaches 95% of American workers. I say give back more to the people and expand it to reach everyone, especially retirees and other non-workers.
Let's help American families by....drum roll please.... helping American families. Not by giving their money to big polluters. Let's be logical, honest and fair.
If Obama doesn't prevail against the likes of Lieberman and wavering Democrats, we will witness one of the great shakedowns in history. Hundreds of billions of dollars will flow in a straight line from working families into corporate coffers.
That's not just bad climate policy, it will be an economic and political fiasco tied to the environmental movement and progressives for decades to come.