Farm Bill Showdown?

[Adapted from my post at Red, Green, & Blue on 4.29.2008] Word has it that the farm bill congressional conferees hammered out at the end of last week would most likely be vetoed by President Bush. Opponents argue that the bill is full of wasteful handouts to wealthy growers, while supporters defend the supports as a needed rural safety net that also expands nutrition aid for the poor. The bill is expected to be on the House floor later this week and go to the Senate quickly thereafter.

According to Ryan Grimm at Politico.com, when asked what the President would do if the current iteration of the farm bill made its way to the President's desk White House spokesman Scott Stanzel replied, "as it stands now, it is not something the president would support." Despite the threat, there may be enough Congressional support to override the veto. According to House Agriculture Committee Chairman Collin Peterson (D-MN), "If the White House is stupid enough to veto this, they’re going to get overridden.”

The farm bill is a very popular funding mechanism for Congressional spending. Every state's congressional delegation works extremely hard to get their slice of the agricultural pie - not doing so does not bode well in the eyes of powerful ag interests and the voters of agricultural states. In short, farm bills do not get vetoed. At least very rarely do they get vetoed - there are a few exceptions.

One exception to the rule is when a second term president uses a veto (or threatens to veto) an appropriations bill, such as a farm bill - and criticize Congress for loading it with pork and earmarks - without any serious political repercussions. Interestingly enough, the last time a farm bill was vetoed was nearly 10 years ago, when another late second-term president successfully vetoed a farm bill - a veto which Congress made no attempt to override. But the political climate is quite different from that of ten years ago, and I would suspect that this President does not have the political capital to successfully veto the farm bill.

Other posts on farm policy:

"Small Wind Remains in Farm Bill" :: Green Options (12/2007)

Photo: mike138

Will the Renewable Energy Tax Package Get Signed into Law?

[Originally published at CleanTechnica on 4.11.08]By a rather impressive tally of 88-8, the U.S. Senate approved The Clean Energy Tax Stimulus Act (S.2821) as an amendment to HR.3221, which aims to mitigate the economic impact of the current housing crisis.

The renewable energy tax credits were slipped into a housing bill that that did not end up looking the way its lead author, Sen. Chris Dodd really, intended it to, remarking earlier in the week that it was “a housing bill, not a Christmas tree.”

However, will the production tax credit and investment tax credit ever make it to the President’s desk to sign?

I would argue that we will see some sort of stripped-down version of the renewable energy tax credits, if any at all. The House has hardened its opposition to this version of the tax-credit extensions, which are estimated to cost $6 billion over 10 years. House leaders have strong objections to deficit-financed tax breaks, and with few exceptions, they have offset lost tax revenue with tax increases or spending cuts elsewhere. But since the President rebuked Congress’ previous attempts at funding the tax credits by rescinding tax breaks for big oil, there hasn’t been much of a discussion as far as where the money for this program will come from. One possible, though unlikely, route that this bill could follow for passage could be if the bill is consistently framed as an economic stimulus package. In that case, the House might be able to bend their pay-go rules. But, that may be a long shot.

“I doubt that the House will accept these extensions without some corresponding offsets,” said Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) on the Senate floor. “This leaves the administration with a key role to play in developing a compromise that will be acceptable to both chambers.”

So we’re leaving this up to the Bush administration to figure out? Yikes.

House Tries Tax Package for Renewables...Again

An aide to House Speaker Nancy Pelosi has said that the House Ways and Means Committee is putting finishing touches on a tax package that would rescind tax breaks for big oil and use the revenue to provide incentives for renewable energy and energy efficiency programs. Called the Renewable Energy and Energy Conservation Tax Act of 2008, H.R. 5351 is a wide-ranging $17.5 billion renewable energy and building-efficiency bill is more inline with the Senate version of the bill produced last week. The changes mean that the bill is not much different from the one Democrats tried to push through at the end of 2007.

Even though Republicans have repeatedly blocked their efforts in the Senate, the Dems are relying on the same financing plan that produced Senate opposition last year, repealing tax breaks granted to oil and gas companies. That move begs this question: Is there any reason to believe that such legislation will pass this time? Yes.

But this time around, the Dems will need to win the battle over issue framing - especially when respected news outlets like the Associated Press are already leading off articles with sentences like:

"The House is going to make another run at imposing more than $17 billion in taxes on major oil companies."

Do not be fooled.

Republicans will undoubtedly raise a stink in opposition to the proposal, arguing that the U.S. should not be 'punishing' American companies that are developing our oil and gas reserves. But in the context of the current credit woes, the downturn in the housing market and general macro-economic slowing, Republicans should be careful about how they frame their opposition. Big oil is seeing record profits while millions of Americans are losing their homes or are in danger of losing them every month. In 2007, Exxon Mobil Corp.earned an astounding $40.6 billion, and Chevron Corp. reported a profit of $18.7 billion.

From the Dow Jones Newswire:

Under the bill, Congress would extend for three years, until Dec. 31, 2011, tax credits for investments in wind-power developments, geothermal and trash combustion facilities, and other projects that generate power from so-called renewable energy. For projects that get up and running starting in 2010, the total amount of tax credits that can be earned would be limited to 35% of a facility's costs. The measure is estimated to result in tax breaks of $6.57 billion over 10 years.

Congress would also extend for eight years, through the end of 2016, tax credits for commercial investments in solar-energy equipment. Congress would extend until the end of 2014 the tax credit for homeowners who buy solar panels or solar hot water heaters. The tax credit would also be more generous, doubling to $4,000 from $2,000.

Photo Credit: Bob Cox via flickr

The Oregonian

CNNMoney

Renewable Energy Access

Small Wind Remains in Farm Bill

Renewable energy advocates are clearly disappointed with the recently passed version of the 2007 energy bill. Yes, there is an important increase in auto fuel efficiency, but considering that CAFE hasn't been upped in nearly 30 years, I don't think Congress should be patting themselves on the back too hard for that one. However, a little piece of renewable energy legislation may have sneaked into the farm bill without too many Republicans noticing, and it just might have a chance of getting passed into law.

The version of the farm bill passed by the Senate on Friday contains a small wind tax provision - the first in more than 20 years. The provision is a 30% investment tax credit (up to $4,000) for the installation of small wind systems. The credit is available for farmers, small businesses and homeowners for new wind systems up to 10 kw. This may be another piece of evidence of a farm bill in energy bill's clothing.

The tax-credit has remained a part of the farm bill despite an attempt to scuttle it. Sen. Ken Salazar (D-CO) and others defeated an amendment sponsored by Lamar Alexander (R-TN) that would have limited the small wind investment tax credit to farmers and small businesses, thus excluding owners of rural residential property and commercial property suitable for small wind from taking advantage of what has traditionally been viewed as a burden. It comes as no surprise to see Sen. Alexander championing the anti-wind cause once again. The Senator from Tennessee has been surprisingly outspoken about wind energy policy in the U.S., even going as far as suggesting that it ruins mountaintops (to say nothing of the practice of 'mountaintop removal' in TN and other coal-heavy states). It is also interesting to note that Alexander owns property on Nantucket Island in MA, not far at all from the proposed Cape Wind project. Coincidence?! I think not.

I suppose I shouldn't be trumpeting this small victory too loudly, President Bush hasn't signed the bill into law yet, so I suppose there is also a chance that the small tax credit will get axed from the bill just like all of the other renewable energy legislation.

Show me the deliberation...please!

After surfacing for some air in the last two weeks, the elusive energy bill has again disappeared into the murky depths of Senatorial politics. Unfortunately, the U.S. Senate has not become the deliberative institution it was designed to be. We see hearings on C-SPAN with lots of questions being asked, and a few being answered. We see flip charts and bar graphs and fancy posters being presented. We see Senators come to the floor with their aides (and sometimes with the help of their aides) to deliver policy speeches to an audience that consists mostly of administrative staff, security guards, pages, and sometimes even some lucky tourists. Real deliberation does not happen on the Senate floor, although bargaining might. And that usually happens when the C-SPAN mics are off.

The right for Senators to filibuster was designed so that debate could continue until a consensus was reached. Usually, now that does not mean debate and deliberation, that means deal-making, mutual back-scratching and overt bargaining. The filibuster is now used as a threat, rather than as an opportunity for substantive back-and-forth. Basically the filibuster now translates as: "I refuse to debate about this and there is nothing that can get me to change my mind." Once again, we can thank James Madison for the institutional incrementalism that pervades and can sometimes cripple American lawmaking.

I appreciate people having conviction about their principles, but why is it that flexibility, contingency and pragmatism are not considered principles worthy of conviction? Regardless of those structural flaws in the system, right now it's the only one we got.

After the Senate voted against cloture on the motion to agree to the House amendments last Friday, we have been seeing a very calculated game of political 'chicken.' The President all along has said he would veto any bill that singles out the oil industry and revokes substantial tax credits to big oil. But does he mean it? Probably yes. Despite the threat, Senate Democrats decided to push ahead with the bill, however, as many guessed would happen, the renewable energy standard was trimmed off to improve the bill's hopes of passage. At this point, it is unclear whether Democrats have the necessary 60 votes to prevent a filibuster and move forward with a vote on the bill.

My concern is that this is one of those instances where President Bush will show his 'conviction' by not passing any bill that repeals the billions of dollars to big oil subsidies. Maybe the President will surprise, in fact I hope he will surprise me. So I will hope that the President will show the rest of the world what a democracy in action looks like by passing the laws that a bicameral legislature has clearly determined as the will of the people. But the one thing that I have found about George W. Bush over the last 7 years is that he has lots of opportunities to surprise me, and hasn't done so once. With that said, I have carefully selected a few quotes that show the kind of real 'quality' communication that have emanated from our leadership in the last few days concerning the energy legislation.

It's a bill that's not going to become law. - Rep. Joe Barton (R-TX)

[The House passed a bill] they knew was unacceptable to the president and had no chance being signed into law. - White House Spokesperson Dana Perino

This is not a good bill, but it can be turned into a great bill. - Sen. Pete Domenici (R-NM)

If it goes to the White House, we would hope that common sense would prevail and the president would sign that. – Sen. Harry Reid (D-NV)

I guess they're trying to guarantee a veto.” – Donald Stewart, spokesman for Sen. Mitch McConnell (R-KY)

He is impossible, and has been for seven years, to deal with. – Sen. Harry Reid (D-NV)

Madisonian 'stability' in American gov't. still doing its job.

Like it or not, the spectre of James Madison still haunts the parliamentary reality of modern American politics. A case in point: the current legislative dance going on between the farm bill, the energy bill, rural senators, and (sub) urban representatives is slowing down lawmaking, and the effects of this delay could be enormous. This is nothing new, and unless there is some sort of constitutional overhaul, American government will continue to plod along incrementally. Not only is the system showing its stickiness but it is also showing its institutional overlap. The energy and farm bills are doing a little cannibalizing of each other. What are people saying about the farm and energy bills?:

"In this bill, we make it a priority to help farmers who are serious about getting into organic production, and we help them overcome the challenges of transitioning into this industry." --Sen. Tom Harkin (D-IA)

"Most importantly, significant resources in [the Lieberman-Warner] bill must be explicitly allocated for Energy Efficiency and Sustainable Energy, the areas where we can get the greatest and quickest bang for our buck." -- Sen. Bernie Sanders (VT)

"I cannot think of an amendment more relevant to the economic security of the American farmer than an amendment to increase the renewable fuel standard" --Sen. Pete Domenici (R-NM)

"...you may have an energy bill that doesn't really have incentives for renewable energy and high value energy efficiency – and that would be tragic." -- Scott Sklar, President of the Stella Group Ltd.

"What these gentlemen are trying to do is outsource our food and fiber" --Sen. Blanche Lincoln (D-AK) referring to the two sponsors of the $250,000 cap on farm subsidies.

"We elect Congress to move the country forward, not entrench the past, and we believe they will." --Michael Eckhardt, President ACORE

"I think we're looking at a December timeline for anything, the question is, what's going to be in it?" --Karl Gawell, Exec. Dir. of the Geothermal Energy Association.

"The time is slowly evaporating." --Sen Harry Reid (D-NV)

An Energy Bill in Farm Bill's Clothing?

If you have ever gone on a whale-watching trip, then you have an idea what it is like to try and follow the elusive politics of energy during this 110th Congress. If I may elaborate; every once in a while you can follow a whale as it swims along the surface just long enough to spout a burst of effluent and pose for a couple photos before it disappears into the darkness. But most of the time is spent waiting, not watching. Waiting and staring in the direction of where you last saw the whale, expecting it to resurface. The whale eventually resurfaces, but it is nowhere near where you were looking, perhaps even on the other side of the boat. You assume, correctly, that while underwater the whale must have been swimming. But it must have done so differently than you expected it to, for it to have ended up where and when it did. Before I beat this metaphor to death, let me just add that while it is hardly uncommon for deal-making and deliberating to occur behind closed doors, one can easily get caught off guard by only looking in one direction waiting for something to resurface.

Reports spinning in the blogosphere have indicated that renewable energy provisions are in danger of being removed from the energy bill by congressional leaders, who are willing to cede the bill’s better provisions in order to get it passed. All this is occurring while numerous energy issues have surfaced and are bubbling around the Senate Farm Bill.

This is where it gets a little tricky. Sen. Pete Domenici (R-NM) wants to migrate two of his favored energy provisions -- the ethanol mandate and $50 billion in nuclear power loan guarantees -- into the more viable farm bill. Big-Ag has been lobbying heavily in support of the restructuring, but opponents fear that transferring the ethanol mandate to the farm bill would weaken bipartisan support for the energy bill and doom it to failure.

But also buried away in the farm bill is the often overlooked small wind tax credit. This year, identical bills were introduced in the Senate by Salazar (D-CO) and Smith (R-OR) and in the House by Blumenauer (D-OR) and Cole (R-OK) that would provide an investment tax credit of $1,500 per ½ kilowatt of capacity for small wind systems. This incentive could make small-scale wind energy generation viable for many, but it would not create the same kind of explosive growth in large-scale wind installations that an RPS or feed-in tariff would.

Late Tuesday, Blog for Rural America reported that the Senate Ag. Committee had agreed upon a list of amendments, and that debate on the farm bill should proceed in the morning. The first thing to be debated in the morning will most likely be the hotly contested Dorgan-Grassley amendment that would close loopholes for corporate farmers and put a 'hard cap' on farm subsidies at $250,000. Roughly half of the suggested $1.15 billion savings would be spent on social programs like emergency food assistance and food stamp enhancements. The rest of the money would be invested in programs for beginning farmer development, rural microenterprise assistance, farmers markets, organic certification cost share, community food grants, grasslands reserve, and farmland protection.

Not willing to give up hope for a more robust renewable energy program, Congressman Mark Udall (D-CO) has said that he will meet with Speaker Pelosi on Wednesday to talk about the future of the wavering energy bill. Co-chair of the Renewable Energy and Energy Efficiency Caucus, Udall is also meeting with senators to share his experiences with Colorado's successful Renewable Electricity Standard. Udall is positioning himself to run for the senate seat being vacated by Republican Wayne Allard, so he will do whatever he can to keep renewable energy targets in the energy bill – he could certainly use a legislative victory to earn some political capital to spend in the upcoming campaign.

Energy Bill: Losing its luster?

I was hopeful yet somewhat skeptical when I last wrote about the chances of meaningful energy legislation making its way through both houses and avoiding the president's recently discovered 'veto pen.' For much of Bush's tenure in the White House, the administration has had little or no need to break out the veto pen. But even when Bush does pass a bill that he has serious reservations about, he has preferred to use the 'signing-statement pen,' despite the fact that there is no Constitutional provision, federal statute, or common-law principle explicitly permitting or prohibits signing statements. Signing statements give an opportunity to the president to add a 'P.S.' that allows the president to voice rhetorical disagreement or otherwise evade proper execution of the laws. Despite the fact that Article II, Section 3 of the Constitution requires that the executive "take care that the laws be faithfully executed", the President has made clear on several occasions that he does not need to execute laws that he does not believe are constitutional.

In the preceding sixteen years of the Reagan, Bush I, and Clinton presidencies, the three produced 347 signing statements between the three of them. By October 4, 2006, Bush II had signed 134 signing statements that challenged 810 federal laws. If you have more time and are really interested in this topic, I highly recommend Boston Globe columnist Charlie Savage's new book, Takeover: The Return of the Imperial Presidency and the Subversion of American Democracy .

But before the president even has a chance to see a bill come across his desk, there are some serious substantive differences between the two bills that need to be reconciled, but it is quite possible the differences will not even have a chance to get ironed out before the impending vote some time this week. It appears as though Speaker Pelosi and Senate Majority Leader Reid are ready to call for a vote on this before Thanksgiving break, without a conference committee on the subject ever have been convened. It looks like an extension of the production tax credit, and the establishment of aggressive renewable energy targets may be overlooked. Major obstacles to the successful passage of quality energy bill include:

1) The Senate version proposes the increasing of new vehicle fuel efficiency (CAFE) standards. Some House members have been trying to ratchet back the Senate-endorsed 35 mph mileage standard. The House version contains no CAFE standards.

2) The house version of the bill included a 15% renewables portfolio standard (RPS) for investor-owned utilities by 2020. States were also permitted to invest in energy efficiency in lieu of renewable energy. The Senate passed no RPS in their version, largely because Senators from the southeast states argued that they do not have adequate renewable resources.

3) There is a proposed repeal of oil, coal, and gas subsidies in the form of tax credits to big energy companies. Pres. Bush has said he would veto a bill with any such repeal and he may get the help he needs as K. Bailey Huthinson of Texas may have the ability to block a joint committee.

4) Perhaps the biggest issue for renewable energy advocates is the apparent lack of tax incentives such as the production tax credit (PTC) and the investment tax credit (ITC). I would be very surprised to see the PTC be passed over for extension, although some large wind energy manufacturers have already shown that they are not waiting to find out.

You can have an impact on what this energy bill looks like. These are not insurmountable obstacles. Urge your Representatives and Senators to consider the RPS, the PTC, and cuts in coal, oil and gas subsidies.

"House energy bill, this is Senate energy bill. Say hello"

On a Saturday flurry that encroached one day into their summer vacation, the people's house passed an energy bill that should have put a smile on a few faces. For those who believe that we have not seen decent renewable energy incentives in the U.S. since the Carter administration, there is reason to feel somewhat victorious. But before you pop the cork on that bottle of Cold Duck or, as Fred Sanford liked to call it, "the good stuff," I must remind everyone that the Senate passed a different collection of energy bills, and now the two must be reconciled into a bill that President George W. Bush might just veto. That is, unless the most significant language in the bills is tempered rather considerably in an effort to get it past the White House.

The differences between the two bills are many. Some of the highlights include a solar energy tax incentive and the elimination of a multi-billion dollar tax break for big oil companies (coupled with a redistribution of those funds toward renewable energy research/production.). But the most significant piece of legislation in the Senate energy bill was completely omitted in the House version; the House did nothing in terms of raising automobile fuel efficiency standards. The Senate bill increases the requirement to 35 mpg by 2020 for cars, SUVs and small trucks, about a 40% increase. Simply put, the House dropped the ball, and the fact that they whimped out on CAFE standards is not particularly surprising.

Oddly, the part of the House legislation which had the most potential for inducing any sort of real change, was also the most yawn-inducing. The House bill energy mandates that investor-owned utilities purchase 15% of their power from renewable sources by 2020. Beside the point that this renewable portfolio standard (RPS) may get by fillibustered by senate Republicans, the language of it has considerable weaknesses.

I am not as optimistic as some that: a) The bill is an effective policy tool, and; b) The bill will even be passed by Congress. First, RPSs are a little clunky as a policy mechanism; they lack flexibility, and do not incentivize renewable energy prodcution the way European and Canadian mechanisms do. The EU, and parts of Canada have used renewable energy tariffs, feed laws, and fee schedules that mandate utilities to purchase renewable energy from any provider at a (fairly high) fixed rate; a rate high enough that makes buying solar panels and sticking them on your roof fiscally attractive. This very aggressive yet somewhat draconian provision has pushed Germany to the forefront of micro-scale renewable energy generation. Just last month, the German Ministry of Environment announced that the targets for 2020 had increased to 27% from the previous 20% and had added a target of 45% by 2030. If there is to be a substantial increase in renewable energy generation, this is perhaps the fastest way to achieve that goal--but politically it is unlikely.

The second shortcoming of the House RPS is that it is only for investor-owned utilities. The House RPS exempts rural electric cooperatives, municipal utilities, the Tennessee Valley Authority and the state of Hawaii from the mandate. Not surprisingly, the investor-owned utility lobbies were a little disappointed for being singled out in the house's legislation; Thomas Kuhn, president of the Edison Electric Institute, called the House vote “very disappointing.” (I bet you're disappointed, Thomas.)

The third reason I am disappointed with the house RPS is that several states have already enacted renewable energy standards that are considerably tougher than the federal mandate. The cartographic wizards over at the Pew Center on Climate Change have put together the handy little map below that shows the states which have enacted some sort of renewable standard. Doesn't it look strikingly similar to another map of the U.S. you saw last November? Well I have news for everyone, even that map is a little misleading. Can we break those units down a little more? Try this more detailed map from 2004 on for size! (to be continued...)

In Support of a Federal Solar Tax Credit

The House of Representatives will soon vote on HR2776, which will extend and enlarge vital tax credits for solar energy installations. Please call your Representative today and urge a 'YES' vote for this vital bill.

Learn More