Block’s Indicator of Sustainable Growth

by Ray Block

Whether any legislation on climate change gets through the US Senate this year is extremely unlikely. But what is crystal clear is that there will be no mention of cap-and-trade in any bill this year.

Lisa Lerer in the political commentary Politico.com (September 17 2009) suggests that what might happen is a “modest energy bill, while leaving the more controversial cap-and-trade proposals  for a later date.” Politico.com reported that in August, four Democratic Senators-Blanche Lincoln of Arkansas, Ben Nelson of Nebraska, Byron Dorgan and Kent Conrad, both of North Dakota urged that the cap-and trade proovisions of the Climate Bill be dropped.

This followed 10 moderate Democratic Senators largely from Rust Belt states sending a letter to the President saying they would not support a bill that didn’t protect American manufacturing.

If you put the pieces of the political jig saw puzzle together, you come up with the following:

The Senate’s version of the Waxman- Markey bill was to be introduced in August, but it didn’t appear. The bill is now expected to be introduced before the end of September, but not voted on before the Copenhagen COP15 Conference in December.

.Harry Reid, the Democratic Majority Leader, who will have to contest his Nevada Senate seat next November  is cool on the legislation, and unlikely to support it. As the political blog ,FiveThreeEight said on August 24, although Harry has more than $7 million cash in hand for re-election, his approval numbers are poor, and he will have to nurse his electorate , without too much contentious legislation to weigh him down.

Chris Dodd, the chair of the Senate Finance Committee, who is reported to have prostate cancer is also up for re-election in Connecticut , and it’s a toss up whether he’ll be re-elected.  Dodd will have very contentious legislation to defend, when a bill comes through on greater regulation of banks, and in particular, as former Federal Reserve Chairman Paul  Volcker described, the need to curb risky activities in the financial markets. The banks and Wall Street will be vigorously opposing any legislation on this, and there will be opposition in Congress.                                                                                                                                                                       

Also standing for re-election next year are Democrats Michael Bennet in Colorado, Roland Burris in Illinois, and Blanche Lincoln in Arkansas. Lincoln has just been appointed chair of the Agriculture Committee , and won’t be supporting the cap-and-trade.

The net effect is that although the Senate Democrats have nominally 61 votes, including the independent Joe Lieberman,  many are becoming nervous, as the political pendulum is now swinging against them. 

Barack Obama’s popularity is sagging, the town hall campaigns in favour of the government health insurance bill faced so much virulent opposition, as to give the Republicans renewed confidence  in Congress and looking good for re-election next year. 

Even Sarah Palin, the probable front runner for President in 2012 is increasingly looking good, despite her hysterical claims on health reforms. Palin received more than  8oo,000 supporters on Facebook  in August.   

lost a great deal of oxygen on the Health Reform Bill, and the need to to legislate on greater bank regulation is going to be very difficult to get congressional approval,       given the vocal opposition of Wall Street