Climate change takes center stage in Congress

WASHINGTON (Reuters) - With climate change legislation a top U.S. priority for Democrats this year, lawmakers began zeroing in on Thursday on ways to ease the financial burden it could impose on the poor, especially in the midst of a deep economic recession.

U.S. Senate Majority Leader Harry Reid (D-NV) talks after meeting with U.S. Senate-designate Roland Burris (D-IL) in his office on Capitol Hill in Washington, January 7, 2009. REUTERS/Larry Downing

Senate Majority Leader Harry Reid, a Democrat, announced he would try to pass a bill capping harmful greenhouse gas emissions from utilities and other industries by mid-year.

President Barack Obama has proposed such controls, but told a group of corporate executives that “this will be a difficult transition for many businesses to make,” and that is why he did not envision the caps starting until 2012.

In response to a question about whether 100 percent of permits to emit carbon dioxide would be sold to industry, Obama told the Business Roundtable that there needs to be the “right balance.” Some leading lawmakers have suggested both giving and selling some of the permits to companies.

The controversial climate control measure, which many Republicans oppose, would be combined with renewable energy initiatives into one massive bill under plans being floated by Reid and House of Representatives Speaker Nancy Pelosi.

“The House has decided to take them all up together. That’s probably where we’re headed,” Reid told reporters on Capitol Hill. “We’re not going to be able to get this (Senate package cleared) until sometime in the summer at the earliest.”

Reid said he has spoken with Pelosi about also folding the combined climate change bill into budget legislation, which would require only 51 votes in the Senate to pass instead of the 60 votes normally needed to overcome possible Republican procedural hurdles.

But a bipartisan group of senators on Thursday warned against the tactic, saying climate legislation was too important to jam into a fast-track budget bill.

If the Democratic-controlled Congress is able to pass legislation, it would mark a reversal after eight years of resistance from former President George W. Bush, who rejected U.S. participation in the carbon-capping Kyoto Protocol, saying it would damage the U.S. economy.

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As Reid sketched out his climate control gameplan, House members, including lawmakers representing poor, rural areas, pressed experts for ways to mitigate the impact on the poor, who spend a greater proportion of their incomes on heating and fuel than middle-income and wealthy people.

“The impact is real and we’re going to have to address it,” said Representative Chris Van Hollen, a member of the House Democratic leadership.


Representative Artur Davis, whose home state of Alabama is one of the poorer in the country, said lawmakers should be concerned about a disproportionate impact on industries clustered in the southern and Midwestern manufacturing states.

If Republicans, who have begun branding the Obama administration’s climate control initiative a “national energy tax,” end up boycotting the legislation, southern Democratic support from lawmakers like Davis will be particularly important.

So far, Republicans have opposed major initiatives floated by President Barack Obama -- from the $787 billion economic stimulus to his climate control plan and some aspects of his planned healthcare overhaul.

The Congressional Budget Office, a nonpartisan analyst for lawmakers, estimates that U.S. households spend about 6.8 percent of their total expenditures on utility and gasoline bills. But for the poorest in the United States, that figure skyrockets to 21.4 percent.

Dallas Burtraw, a senior fellow at Resources for the Future, told the House panel that under climate change bills being considered by Congress, electricity rates, on average, could rise by about 30 percent within 20 years.

Average household energy expenditures increased by 81 percent between 2001-2008, House Energy and Commerce Committee Chairman Henry Waxman pointed out at a separate hearing.

Among proposals being considered for easing the pain on the poor are expanding tax credits to help them pay rising energy costs or other types of rebates.

The Obama administration has proposed raising $646 billion under a climate change plan by selling permits to power plants, oil refineries and other industrial facilities that would limit the greenhouse gases they could emit.

The revenues collected by the government could help consumers pay for higher energy costs, as well as supporting alternative energy initiatives.

Additional reporting by Tom Doggett, editing by Stacey Joyce and Philip Barbara