05/07/2009 05:12 am ET Updated May 25, 2011

Is Cap-And-Trade Dead This Year?

Following conventional wisdom, especially in Washington, is often a fool's errand. Groupthink can be wildly wrong, even if "everyone knows..." or "everyone believes..." something to be true. But every now and then, the conventional wisdom turns out to be right. Which may be the case for the punditocracy's predicted doom for cap-and-trade legislation intended to reform America's energy policy. If this proves to be the case, it will be the first major Obama priority to fail in Congress.

This scenario may have a silver lining -- if cap-and-trade is jettisoned, health care reform may actually pass this year. This may seem like apples and oranges, but that is often true with congressional priorities. But, for the first time, Congress is apparently throwing up its hands and admitting that they just can't keep up with President Obama's fast-paced agenda.

The view that cap-and-trade is dead (at least this year) is becoming widely held. Pundits on the right are predicting its demise with barely-restrained glee, and pundits on the left are predicting its demise with open dismay; but it's getting harder and harder to find anyone in Washington of any political stripe who isn't in agreement on the basic story -- no cap-and-trade law will be passed this year.

At this point, I have to agree. Cap-and-trade could rise zombie-like from the grave and surprise us all, but it's not exactly a safe bet right now. Because Congress has already sent two very strong signals that it does not intend to move forward on the issue this year. The first of these signals was that the revenues which cap-and-trade would have created for the federal government were pointedly left out of the budget blueprint. Now, this blueprint has not been finalized yet, even though slightly different versions have passed both the House and the Senate. But after Congress gets back from yet another of its many vacations, a committee will meet to hammer out one bill that both houses can pass. So there's still a chance, but a very small one, that cap-and-trade revenues could be put back in.

But the second signal Congress sent was the real death knell for cap-and-trade this year. Because "moderate" Senate Democrats worked very hard to make it impossible for cap-and-trade to pass -- and for Republicans to take the blame for it. If you think this sounds like craven politics-as-usual rather than "change we can believe in," well, you'd be correct. Because (while the budget blueprint bill isn't finalized yet) the agreement seems to now be that health care legislation will be eligible for "fast-track" rules (which only require a majority vote in the Senate), but cap-and-trade will not be fast-tracked, and will require the usual 60 (since Republicans will be sure to force such a vote). Which will be an impossible standard to meet for the bill.

In other words, Democrats are all but admitting that they're killing off cap-and-trade for this year's legislative season. And that, when the time comes, they will be blaming the Republicans, even though their own cowardice is the real culprit.

Now, I am not arguing the merits of cap-and-trade here. There are actually quite a few different flavors of cap-and-trade; different schemes as to how to best implement the idea. I'm not arguing for or against any of these plans, or even for or against the basic idea itself. I am merely observing the political realities and headwinds. Which appear stacked against cap-and-trade legislation.

President Obama has four core agenda items, as he will tell anyone who asks. The first is not really of his making -- fixing Wall Street and the economy. The other three are the priorities he ran on -- education, health care, and an energy policy which can carry us into a future where we are not dependent on foreign oil. Right now, of course, his first priority is dealing with the economic crisis. His second priority -- which he has ingeniously tied to the first -- is health care. He has done a masterful job of framing by stating over and over that "fixing health care is an integral part of fixing the economy." The American people are already behind the idea of fixing health care, but portraying it as essential to fixing the economy further undercuts the naysayers, before they even open their mouths. But Obama's third and fourth goals are energy and education. While nobody is talking much about education right now, it may become a bigger issue later in the year. But it is looking like energy policy is going to have to wait until next year... or the year after (since next year will be midterm election season).

Now, I admit that this could all change, and change quickly. Gas prices could spike again, and the public could start screaming for "something to be done." But that "something" may not be a cap-and-trade system. Republicans have already decided on their framing for cap-and-trade, and it is going to be an effective argument even if gas prices do spike. They're calling it a "lightswitch tax." And when energy prices are high, portraying cap-and-trade as a tax (raising the price even higher) may not be supportable politically.

The likely upshot, even if public pressure isn't at a high (due to gas prices, or whatever other reason), is that either nothing will get done this year in Congress (other than a lot of hot air being expended -- a seemingly endless energy source on Capitol Hill), or that a watered-down "energy policy" will emerge that will essentially continue the status quo. Perhaps enough good things will be included in a bill which limps through Congress that Obama can claim at least a partial victory on the issue politically, but at this juncture the conventional Washington wisdom may be correct -- cap-and-trade is dead, for this year. But if Obama does manage to get real health care reform passed, he will still have had a pretty good year by doing so.

Of course, that's not really good enough. America needs a new energy policy. We need to wean ourselves off of foreign oil. We need to move into a future that is different than the status quo. But it is looking like we will also need to wait another year or so before this happens.


Chris Weigant blogs at: