Smart Spending

I never expected a massive Keynesian stimulus to be easy. But the fact that the Obama transition needs to allay fears about the package is worrying. What economy are these neo-Hooverists looking at? Jobless claims keep jumping - expect another half-million to be out of work by next month. The housing market is still crippled with no sign of recovery. And even the lead economist of the IMF, no left-wing liberal, is warning of another Great Depression if governments don't replace consumer spending with massive spending of their own.

Dominique Strauss-Kahn, the head of the IMF, is pushing governments to increase their own spending in order to support growth. The IMF has always been a big enemy of deficits. Why the reversal?

We are facing a crisis of an exceptional breadth, the basis of which is a collapse of demand. The consumer and business confidence numbers have never fallen this much since they've first been recorded. We've NEVER seen this!...

It is imperative to curb the this loss of confidence, to relaunch it and, if necessary, replace private demand, if we want to avoid a recession that turns into a Great Depression. Of course, in normal times, we would recommend that Europe reduce its budget deficits. But these are not normal times.

The fears that the Obama team is responding to are largely about limiting pork-barrel spending in the final bill. I think the nation can survive if a pet project makes its way into a trillion-dollar bill. Somebody has to build that pet project, too, and the whole point is to get money into people's hands in exchange for public works. However, that's not to say that we shouldn't be careful about the spending. On the contrary, I believe that funneling money to build more highways and roads that perpetuate unsustainable suburban sprawl is a bad idea. The opportunity of the stimulus is that we can create new economic opportunities based on building green industries and projects that can reduce our dependence on fossil fuels.

"We've let our infrastructure crumble for a long, long time from water to roads to bridges. It makes sense to invest in them now," Biden said.

But environmentalists and their allies view old-fashioned highway construction as encouraging longer commutes and increasing the energy-consumption crisis of the past year. "They're going to put a bunch of money through a broken system to stimulate the economy. That doesn't make sense to me," said Colin Peppard, a transportation expert for Friends of the Earth.

Peppard's group recently began a "Road to Nowhere" campaign, saying that new roads would lead to "new pollution -- keep the economic stimulus clean."

This doesn't mean that existing infrastructure shouldn't be upgraded in the meantime. But projects like rail, smart energy grids, building out broadband, and developing alternative energy need to get their share of the pie. And there are examples of where "old infrastructure" and "green infrastructure" can work together. The best example is in the building trades. The commercial real estate industry wants their own bailout, and they're going to be the next of many industries seeking one. Now, just handing over money to developers who bought high and are underwater, when the default process works perfectly well and wouldn't disrupt the greater economy much at all, makes no sense. However, if we offered developers a deal like the Architecture 2030 proposal, which would save money in energy costs and have a societal good, that would be worthwhile. And it could be extended to ordinary homeowners as well.

An outfit called Architecture 2030, founded by Edward Mazria, suggests that we offer homeowners not just low-interest loans, but a sliding scale of low-interest loans that's conditioned on renovating their homes to increase energy efficiency. Their proposed scale is on the right. The nickel explanation is below:

"Mazria walked me through a hypothetical example that highlighted the huge incentives the plan could unleash. Say you're a homeowner with a $272,000 mortgage at 5.55%, paying about $1550 a month. You decide you want your mortgage rate to drop to 3%. In order to qualify for the reduction, you have to improve the energy efficiency of your home 75% below code, and it's going to cost you a pretty penny: about $40,000.

Existing tax credits would take care of about $10,000 of that cost. The rest would get tacked on to your existing mortgage, bringing it up to $302,000. But, at 3%, you'd be paying only about $1280 — saving almost $300 a month on the mortgage alone, plus another $150 in reduced energy costs. The value of your home rises, you have more disposable income, you've given work to someone to do the upgrades for you — and s/he's now paying federal taxes, and you've reduced your carbon footprint."

The Architecture 2030 folks claim that their program (which has a component for commercial buildings as well) would cost a mere $170 billion over two years, and in return would create over 8 million new jobs, jump start a new $1.6 trillion renovation market, save consumers a boatload of money, and reduce CO2 emission by about half a billion tons. What's not to like?

I think they're being a little sunny about the positive impact, but not very much.

We definitely need to be smart like this, but it's a tough job. There are a lot of competing interests at play, and nobody's going to be totally happy. At the very least, however, this cannot look like a highway bill.

...Matt Stoller has a good piece on the politics of this. The Blue Dogs appear to favor highway and road projects, but the question is whether they have enough clout to get what they want. Also, a bill like this includes Congresscritters seeking money for their districts that split ideological lines. For instance, the major green jobs repositories in California are Bakersfield and Palm Springs, which have Republican members. I don't think the Blue Dogs are going to be able to dictate this so easily.

Boyz In The LaHood

So the second Republican has been tapped for President-elect Obama's cabinet - former Illinois Congressman Ray LaHood as Transportation Secretary. In past Administrations, the Transportation Secretary hasn't been that powerful a job and has been a dumping ground for the inevitable token member from the opposite party. Heck, even Bush had Democrat Norman Mineta installed there. However, with the focus on infrastructure improvements being central to Obama's economic recovery platform, and with a lot of that going to rail and transit, DOT might be more important this time around. And it's being handed to a Republican. Of course, there's an open question about how involved LaHood would be on those infrastructure issues, rather than the normal work of DOT, a lot of which involves air travel.

The reception has been mixed. Streetsblog is not impressed.

We've been calling around to Congressional staffers, advocates and insiders to get a better sense of what Obama's appointment of Ray LaHood as transportation secretary means for those pushing for sustainable transport, smart growth, livable streets. While no one is giving up hope on the Obama administration a month before the inauguration, the general consensus is pretty clear. As one insider summed it up: "It's a real read-it-and-weep moment."

The selection of a downstate Illinois Republican with close ties to highway lobby stalwart Caterpillar Inc. is being taken by many as a clear sign that progressive transportation policy is, for now, nowhere near the top of the Obama's agenda.

"Obama still hasn't made the transportation - land use - climate connection," Petra Todorovich, director of Regional Plan Association’s America 2050 program said. "It's clear he's thinking about these things in separate categories." For Todorovich and other advocates, the LaHood pick was the second shoe to drop this week. The first piece of bad news arrived on Monday when Obama trotted out his "green dream team," his appointments to key environmental, energy and climate posts, and the transportation secretary was nowhere to be found.

Friends of the Earth is a little more hopeful:

“Congressman LaHood’s challenge is great. He must ensure U.S. transportation policy supports, rather than undercuts, the Obama administration’s goals on energy and climate change. This means he must work closely with Obama’s nominees for the Department of Energy and Environmental Protection Agency, and with Obama’s new energy and climate czar, Carol Browner.

“While his overall record on energy and environment issues is poor, LaHood has in recent years broken with many in his party to support crucial investments in passenger rail and public transportation, and he is a member of the Congressional Bike Caucus. These are reasons to hope that he may be open to the visionary transportation policy that is needed to move our country forward.

“Friends of the Earth looks forward to working with Congressman LaHood to bring about such a policy.”

I think it's clear that Obama doesn't connect green policy and transportation policy, but it's probably because his green thinking outweighs the thinking on transportation. I don't think LaHood will have much of a power center. He is moderate for a Republican, and he has promoted expanded rail and transit funding in recent years, so I don't think he'll be an obstacle to that either. At some point, however, Streetsblog is right: to truly remake our energy future we need to provide options to alter the way we live - with smart growth, proper land use and livable streets. The era of suburban sprawl cannot continue because our efforts on reining in greenhouse gas emissions will collapse. DOT actually could play a valuable role in setting that policy, but Obama doesn't want to go there. His urban background, however, suggests he understands the importance of it, both for the economy, the environment and quality of life. So we'll see.

...just to round out the cabinet, there's former Dallas mayor Ron Kirk as US Trade Representative. I think it was clear with Xavier Becerra's remarks when he turned down the job that Obama didn't really think trade was a first- or second-order priority, and he didn't connect trade to our larger economic problems, so this may be another area where the pick doesn't entirely matter since that policy will be attacked from a different angle.

The Tailpipe Emissions Shell Game

The Bush Administration's Department of Transportation proposal to raise fuel economy rates faster than Congress mandated last fall comes with a catch - obliterating California's proposal to regulate tailpipe emissions. Think Progress has the relevant passage in the report.

(b) As a state regulation related to fuel economy standards, any state regulation regulating tailpipe
carbon dioxide emissions from automobiles is expressly preempted under 49 U.S.C. 32919.

(c) A state regulation regulating tailpipe carbon dioxide emissions from automobiles, particularly a regulation that is not attribute-based and does not separately regulate passenger cars and light trucks, conflicts with:

1. The fuel economy standards in this Part
2. The judgments made by the agency in establishing those standards, and
3. The achievement of the objectives of the statute (49 U.S.C. Chapter 329)

This actually changes little in the near term. The EPA has already denied California a waiver to regulate their own emissions, a ruling that is under court appeal. And the Supreme Court has already ruled on the belief that gas mileage standards and greenhouse gas emissions are separate, and that the states may act to regulate the latter.

Arnold Schwarzenegger and a coalition of governors have acted swiftly:

NHTSA has no authority to preempt states from regulating greenhouse gases. Congress and two federal district courts have rejected NHTSA's claim to such authority. Furthermore, this attack completely undermines the cooperative federalism principles embodied in the Clean Air Act, and is an end run around 40 years of precedent under that law.

Our states intend to comment on the proposed rulemaking and, if necessary, will sue NHTSA, just as California and other states have sued the U.S. Environmental Protection Agency, to ensure that states retain the right to reduce global climate change emissions...

It just adds to the extreme hackitude that has characterized this Administration's actions on global warming. We learned this week that over half of all EPA scientists have "experienced incidents of political interference in their work." Now the Department of Transportation gets added to the list.

Lobbying for Global Warming

Yesterday, the UN held a major conference on climate change (Bush was a no-show) and the Secretary-General called for immediate action to preserve the future of the planet. In a separate event, the President will call for a consensus about the world's highest-emitting nations that would allow each to set their own voluntary limits on greenhouse gas emissions instead of it being ordered by an international treaty.

Not a good idea, I know. But let's accept Bush's logic for a moment (and only a moment, before you slip into dementia). He believes that governing entities should be given latitude to make the climate change policies that they see fit, rather than having them signaled from on high. Unless, of course, that refers to states in this country and the one on high is him:

The Bush administration has conducted a concerted, behind-the-scenes lobbying campaign to try to generate opposition to California's request to regulate greenhouse gas emissions from cars and trucks, according to documents obtained by the House Committee on Oversight and Government Reform [...]

A flurry of e-mails among Transportation Department (DOT) officials and between its staffers and the White House, released yesterday, highlights efforts that administration officials have made to stir up public opposition to the waiver. Rather than attacking California's request outright, Bush officials quietly reached out to two dozen congressional offices and a handful of governors to try to undermine it.

One May 22 e-mail written by Jeff Shane, undersecretary of transportation for policy, outlined how Transportation Secretary Mary Peters orchestrated the campaign. Peters "asked that we develop some ideas asap about facilitating a pushback from governors (esp. D's) and others opposed to piecemeal regulation of emissions, as per CA's waiver petition," Shane wrote. "She has heard that such objections could have an important effect on the way Congress looks at the issue."

Waxman has been investigating this issue for some time. In fact, back in June, he even released a voice mail from a DOT staffer to a member of Congress asking them to oppose the EPA waiver for California. But this new data is just more evidence of the total politicization of federal agencies, and the ideologically driven desire to stop all efforts to curb the production of greenhuse gas emissions. It also happens to be completely illegal to use our tax dollars to mount such a behind-the-scenes campaign.

In a letter yesterday to James L. Connaughton, chairman of the White House Council on Environmental Quality, Rep. Henry A. Waxman (D-Calif.) asked him to "repudiate these efforts."

"If Secretary Peters has concerns about whether California's application meets the legal standards set forth in the Clean Air Act, she should submit comments to EPA making her case," wrote Waxman, chairman of the oversight panel, which negotiated for three months to have the documents released. "Instead of taking this action, however, she apparently sought and received White House approval to use taxpayer funds to mount a lobbying campaign designed to inject political considerations into the decision."

The Governor is on a barnstorming tour, selling his own action on climate change to the UN (while conveniently forgetting to mention firing the head of the Air Resources Board because he was pushing too hard for emission reductions, or the three important environmental bills on his desk he has yet to sign). He may want to speak up about this effort to undermine all anti-global warming efforts, which incidentally is coming from the standard-bearer of his own party. Or he could keep giving speeches and savor applause.

More Politicization of Federal Agencies

We didn't need any more evidence that the Bush Administration uses the executive branch as a political instrument. But this latest example shows that they will use federal agencies to work to oppose legislative efforts at the state level, making a complete mockery of the entire premise of federalism itself.

House Oversight and Government Reform Committee Henry Waxman has received information that the Department of Transportation has been lobbying members of Congress to oppose state efforts, sought by California and others, to regulate tailpipe emissions. California is waiting for an EPA waiver to implement their tailpipe emissions proposal. The Governor has threatened to sue the EPA if they don't receive that waiver. The first roadblock that the EPA tried was to appeal to the Supreme Court by claiming that they didn't have the ability to regulate greenhouse gases, but in a landmark decision the Supreme Court said that they did. So plan B, apparently, is to use the DOT to threaten legislators in automobile-producing districts that their local economies would be severly impacted by any efforts to regulate. This excerpt is from a letter by Waxman to Transportation Secretary Mary Peters:

The U.S. Environmental Protection Agency is currently considering a request from the State of California for a waiver under the Clean Air Act (Waxman wrote the Clean Air Act -ed.) to establish state motor vehicle emissions standards for greenhouse gases...

My understanding is that the Department of Transportation and the Bush Administration have not taken an official postition on this issue. However, the staff of a member of Congress recently received a voicemail message from Heideh Shahmoradi, special assistant for governmental affairs in the Office of the Secretary of the Department of Transportation, suggesting that the member (1) submit comments to EPA opposing California's request and (2) "reach out to your governor's office for them to submit comments since this would greatly impact auto facilities within your district."

You can read the full text of the voicemail and the entire letter from Rep. Waxman to Sec. Peters at this link.

This is patently illegal. The DOT, which is supposed to merely regulate and facilitate transportation and not advocate on behalf of automobile interests, is lobbying Congress to influence an EPA ruling that would affect state legislation. Within the letter, there are other instances of federal agencies in the Clinton Administration distributing talking points supporting or opposing Congressional legislation. But this goes even further, asking Congress to step in to an exceutive agency decision which will nullify state efforts to tackle global warming. It allows the President to be supposedly neutral about the EPA ruling while getting Congress to do his dirty work for him.

For the past six years of Republican rule, Congress has done nothing while the planet has continued to warm and spew harnful greenhouse gases into the air. States like California have stopped waiting around for the feds to get their act together, and put forward their own plan, which is completely legal under the Clean Air Act. Now the Bush Administration is using federal agencies illegally to try and derail it. Now that we actually have oversight in the Congress (in one branch, anyway), we are beginning to see the depth of the politicization of these federal agencies, suggesting that what has been done behind the scenes in these two terms of office has been far more destructive that what has been done out in the open.