Crunch Time Approaches

The preliminaries are now over, and friction is due to increase between the metaphorical tire and asphalt on Obama's key legislative priorities: health care and energy.

In these summer months these two bills will set the long-term direction for the country, to the extent the (First) Obama Administration will have the ability to determine it. In each case, Obama will require a bill be passed, in order to complete his campaign pledges, so, the question will be if the bill that gets to him will be one he wants.

He can certainly count on the House, guided by Nancy Pelosi's will and driven by Super-Whip Rahm Emanuel. The trick will be getting the votes in the Senate--not 50, but 60. For these two domestic bills, Obama's party has 59 votes (i.e., Lieberman should be reliable), at least until Al Franken is seated. I think we can count on that being after the summer session--the Republicans' last-ditch delaying tactics can probably keep him out that long, but no more. So, Obama has to pick up one more Republican vote than he loses of Democrat votes in the Senate.

On health care, I think he has good chances to pick up Republican votes with both the Maine Senators, Olympia Snowe and Susan Collins. The key aspects to watch will be how realistic the cost savings--for consumers and for the government. Will the public offering--to compete with the private insurers'--emerge as a viable proposition available to all? Will the program pay for itself, after the start-up costs are over and sales commissions are somehow determined? This should be Ted Kennedy's bill, in that he should be the one to say to President Obama: this is a bill for change we can believe in (or not), and it should end up with his name on it.

I am actually less optimistic about the energy bill, both in terms of the votes and in terms of the quality of the bill that will eventually come out to be signed. Cap-and-trade is fundamentally a new business tax, of long or permanent duration, and thus will be very hard for Republicans to ever get behind. They will need solid inducements. I think Obama's bill sponsors (and he is still auditioning for the actual Senators to build around: I like our Sen. Bingaman's chances to win the part, actually) will need to horsetrade, and they will be empowered to do so.

I see four key concessions from a pure green energy, tax-the-polluters approach in the final bill: 1) Grandfathering in emissions from existing coal-burning polluters, so that they would only pay taxes when limits are cut or their fossil-fuel burning increases. This one is already baked in, as the Administration wisely isn't going to propose immediate tax increases, much as these polluters may deserve them.

2) Some kind of special concession for natural gas, which burns cleaner than oil or coal, is abundant in the continental U.S., and could figure into our transportation picture in the future (one of the elements of Boone Pickens' plan). Maybe it would be support for a new pipeline which could ensure plentiful supply at lowered cost throughout the country.

3) Money for at least one major coal gasification project. This is like Carter's synfuels and Reagan's Star Wars--clearly a hole which will permanently sequester money, but politically necessary.

4) Easing of regulatory obstacles and insurance for a small number of new nuclear plants. The Republican bill outlined this week--which has no chance whatsoever but does provide good talking points--has a huge target of something like 100 new nuke plants in 10 years. This is ridiculous and unnecessary--regardless of how many, Obama would go down in the history of nuclear energy as the first to authorize plants in over 30 years, and thus a relative hero to its proponents. Three to five plants would be enough to demonstrate proof of concept--that we now have the technology to build economically, safely, and the smaller scale will allow temporary solutions to the nuke waste problem to continue. Then, in 10 years or so, if all's well we can take a longer look at whether more are necessary and truly beneficial to our future society.

Judicious compromises on 2), 3), and 4) would allow Obama to find the Senators he needs--whether Republicans looking for "energy independence" or blue Dog Dems he needs to buy off--in order to get the 60 votes for cloture, and thus eventually to his desk for signature.

Oh, and Sonia Sotomayor will get approved sometime this summer, easily. That's a real success, too, but the key will be getting Republicans to get used to voting our way and not just allowing this to be a token show of feel-good bipartisan sentiment.