Promised Land (9781524763183)

by Obama Barack

  If you believed in climate science, then the carbon dioxide pouring out of automobile tailpipes clearly qualified as air pollution. Apparently, President Bush’s EPA administrator didn’t (believe in science, that is). In 2003, he determined that the Clean Air Act wasn’t meant to give the agency authority to regulate greenhouse gases—and that even if it did, he still wouldn’t use it to change emission standards. Several states and environmental organizations sued, and in the 2007 ruling Massachusetts v. EPA, a narrow majority of the U.S. Supreme Court held that President Bush’s EPA had failed to apply “reasoned judgment” based on science in making its determination and ordered the agency to go back and redo its homework.

  For the next two years the Bush administration did nothing, but we were now in a position to take the Supreme Court’s decision out for a spin. Lisa and Carol recommended that we gather up the scientific evidence, issue a finding that greenhouse gases were subject to EPA regulation, and immediately use that authority to raise fuel-efficiency standards for all cars and trucks built or sold in the United States. Circumstances couldn’t have been more favorable for that sort of rulemaking: Although U.S. carmakers and the United Auto Workers (UAW) generally opposed higher fuel-efficiency standards, my decision to continue devoting billions in TARP money to keep their industry afloat had made them “more open-minded,” as Carol so delicately put it. If we acted fast enough, Lisa thought, we could have regulations in place before the automakers’ next model year. The resulting drop in U.S. gasoline consumption could save roughly 1.8 billion barrels of oil and reduce our annual greenhouse gas emissions by 20 percent; we’d also establish a useful precedent for having the EPA regulate other greenhouse gas sources in future years.

  To me, the plan was a no-brainer, though Rahm and I agreed that even with the automakers on board, having the EPA issue new mileage standards would generate plenty of political static. After all, GOP leaders considered the rollback of federal regulations a tier-one priority, right up there with lowering taxes on the rich. Business groups and big conservative donors like the Koch brothers had invested heavily in a decades-long campaign to make “regulation” a dirty word; you couldn’t open the editorial pages of The Wall Street Journal without finding some attack on an out-of-control “regulatory state.” To the anti-regulation crowd, the pros and cons of higher mileage standards mattered less than what a new rule symbolized: yet another example of unelected Washington bureaucrats trying to micromanage people’s lives, sap America’s economic vitality, violate private property rights, and undermine the Founding Fathers’ vision of representative government.

  I didn’t put a lot of stock in such arguments. As far back as the Progressive Era, oil trusts and railroad monopolies had used similar language to attack government efforts to loosen their stranglehold on the U.S. economy. So had opponents of FDR’s New Deal. And yet throughout the twentieth century, in law after law and in cooperation with presidents of both parties, Congress had kept delegating regulatory and enforcement authority to a host of specialized agencies, from the U.S. Securities and Exchange Commission (SEC) to the Occupational Safety and Health Administration (OSHA) to the Federal Aviation Administration (FAA). The reason was simple: As society grew more complex, corporations grew more powerful, and citizens demanded more from the government, elected officials simply did not have time to regulate so many diverse industries. Nor did they have the specialized knowledge required to set rules for fair dealing across financial markets, evaluate the safety of the latest medical device, make sense of new pollution data, or anticipate all the ways employers might discriminate against their employees on account of race or gender.

  In other words, if you wanted good government, then expertise mattered. You needed public institutions stocked with people whose job it was to pay attention to important stuff so the rest of us citizens didn’t have to. And it was thanks to those experts that Americans could worry less about the quality of the air we breathed or the water we drank, that we had recourse when employers failed to pay us the overtime we were due, that we could count on over-the-counter drugs not killing us, and that driving a car or flying on a commercial airplane was exponentially safer today than it had been just twenty or thirty or fifty years ago. The “regulatory state” conservatives complained so bitterly about had made American life a hell of a lot better.

  That’s not to say that every criticism of federal regulation was bogus. There were times when bureaucratic red tape burdened businesses unnecessarily or delayed innovative products from getting to market. Some regulations really did cost more than they were worth. Environmental groups, in particular, hated a 1980 law that required an obscure executive branch subagency called the Office of Information and Regulatory Affairs (OIRA) to perform a cost-benefit analysis on every new federal regulation. They were convinced that the process favored corporate interests, and they had a point: It was a lot easier to measure a business’s profits and losses than it was to put a price on preserving an endangered bird or reducing the probability that a kid got asthma.

  Still, for both policy and political reasons, I felt that progressives couldn’t afford to ignore economics. Those of us who believed in the government’s ability to solve big problems had an obligation to pay attention to the real-world impact of our decisions and not just trust in the goodness of our intentions. If a proposed agency rule to preserve wetlands was going to lop acreage off a family farm, that agency should have to take the farmer’s losses into account before moving forward.

  It was precisely because I cared about getting this stuff right that I appointed Cass Sunstein, a former colleague at the University of Chicago Law School, to head up OIRA and serve as our resident cost-benefit expert. An eminent constitutional scholar who’d written a dozen books and was often mentioned as a future Supreme Court justice, Cass actually lobbied me for the OIRA post, an indication of his passion for service, his indifference to prestige, and a high nerd quotient that made him ideally suited for the job. (He was also sweet as can be, a world-class squash player, and the individual with the single most slovenly desk I ever set eyes on.) Over the next three years, Cass and his small team would grind away in the nondescript OIRA office across the street from the White House, ensuring that the regulations we proposed actually helped enough people to justify their costs. I also asked him to lead a thorough review of all existing federal regulations so that we could get rid of those that were unnecessary or obsolete.

  Cass unearthed some doozies: old requirements that forced hospitals, doctors, and nurses to spend more than $1 billion annually on paperwork requirements and administrative burdens; a bizarre environmental regulation that classified milk as “oil,” subjecting dairy farmers to annual costs in excess of $100 million; and a pointless mandate imposed on truckers to spend $1.7 billion in wasted time filling out forms after each run. But the vast majority of regulations Cass reviewed stood up to scrutiny—and by the end of my presidency, even Republican analysts would find that the benefits of our regulations outweighed their costs by a six-to-one margin.

  Lisa and Carol’s proposal to raise mileage standards ended up being one of those regulations. As soon as I gave them the go-ahead, they got to work. They had a good partner in my secretary of transportation, Ray LaHood, a former congressman from Peoria and a gentlemanly old-school Republican whose gregarious nature and earnest commitment to bipartisanship made him popular on both sides of the aisle. On a sunny day in May, I found myself standing in the Rose Garden, flanked by a group of auto-industry leaders, as well as the president of the UAW, to announce an agreement that would boost fuel efficiency on all new cars and light trucks from 27.5 miles per gallon to 35.5 by 2016. The plan stood to cut greenhouse gas emissions by more than 900 million metric tons over the lifetime of the new vehicles, the equivalent of taking 177 million cars off the road or shutting down 194 coal-fired power plants.

  In their remarks that day, the automakers stayed on message, expressing confi
dence in their ability to meet the new targets and the benefits to their business of having a single national standard rather than a patchwork of different state laws. The speed and lack of contentiousness with which we’d arrived at a deal took reporters by surprise, and several of them asked Carol what role the auto bailout might have played in sparking this newfound kumbaya spirit. “Not once did we ever mention bailouts during negotiations,” she insisted. Later, in the Oval, I asked her if what she’d said was true.

  “Absolutely,” she answered. “Of course, I can’t say the bailouts never crossed their minds…”

  Meanwhile, I set Steve Chu on a mission to update every efficiency standard he could find, using the power of a little-enforced 1987 law that gave the Department of Energy authority to set energy-efficiency standards on everything from lightbulbs to commercial air conditioners. The man was like a kid in a candy store, regaling me with detailed explanations of his latest standard-setting exploits. (“You’d be amazed at the environmental impact of just a five percent improvement on refrigerator efficiency!”) And although it was hard to match his excitement over washers and dryers, the results really were pretty amazing: By the time I left office, those new appliance standards were on track to remove another 210 million metric tons of greenhouse gases from the atmosphere annually.

  Over the next several years, carmakers and appliance manufacturers hit the higher efficiency goals we’d set without much fuss and ahead of schedule, confirming Steve’s assertion that when done properly, ambitious regulatory standards actually spurred businesses to innovate. If consumers noticed that the energy-efficient models of cars or appliances were sometimes more expensive, they didn’t complain; they were likely to make up the difference in lower electricity bills or fuel costs, and prices typically settled back down once the new technologies became the norm.

  To our surprise, even McConnell and Boehner didn’t get particularly worked up about our energy regulations—perhaps because they didn’t think it was a winning issue for them and didn’t want to divert attention from their efforts to defeat Obamacare. Not all Republicans showed such restraint. One day, Pete Rouse wandered into the Oval to show me media clips containing various remarks from Congresswoman Michele Bachmann of Minnesota, founder of the House Tea Party Caucus and an eventual Republican candidate for president. Bachmann had been decrying newfangled energy-efficient lightbulbs as an un-American “Big Brother intrusion” and a threat to public health; they also signaled what she declared to be a larger plot by Democrats to impose a radical “sustainability” agenda, in which all U.S. citizens would eventually be forced to “move to the urban core, live in tenements, [and] take light rail to their government jobs.”

  “Looks like our secret is out, Mr. President,” Pete said.

  I nodded gravely. “Better hide the recycling bins.”

  * * *

  —

  WHILE ENERGY-SAVING cars and dishwashers were a step forward, the ultimate pathway to lasting change, we knew, lay in getting comprehensive climate legislation through Congress. A bill had the potential to reach every sector of the economy that contributed to greenhouse gas emissions, not just vehicles and appliances. On top of that, the news stories and public dialogue sparked by the legislative process would help drive home the perils of rising global temperatures, and—if all went well—Congress would feel a sense of ownership of the final product. Perhaps most important, federal legislation would have genuine staying power, unlike regulations, which could be reversed unilaterally by a future Republican administration.

  Of course, legislation depended on our ability to overcome a Senate filibuster. And unlike the situation with the Recovery Act, where when push came to shove we’d been able to marshal every Democratic vote we needed, Harry Reid warned me that we were certain to lose at least a couple of Senate Dems from oil- and coal-producing states who were looking at tough reelections. To get sixty votes, we were going to need to convince at least two or three Republicans to support a bill that a majority of their voters firmly opposed, and that Mitch McConnell had sworn to defeat.

  Initially, at least, we thought our best bet was the guy I’d beat in the race for president.

  John McCain had downplayed his support for climate change legislation during his campaign, especially after he selected a running mate whose energy policy—“Drill, baby, drill!”—proved to be a Republican crowd favorite. But to his credit, McCain had never fully abandoned the position he’d staked out earlier in his Senate career, and in the (very) brief halo of good feeling right after the election, he and I had discussed working together to get a climate bill passed. Around the time I was sworn into office, McCain had reportedly joined forces with his best buddy in the Senate, Joe Lieberman, to put together a bipartisan alternative to more liberal legislation being proposed by Barbara Boxer, the California Democrat who chaired the Environment and Public Works Committee.

  Unfortunately, inside GOP circles, McCain’s brand of bipartisan compromise was badly out of fashion. Right-wingers despised him more than ever, blaming his lack of conservative conviction for Republican losses in the House and Senate. In late January 2009, a former congressman and right-wing radio host named J. D. Hayworth floated the possibility of running against McCain in the Arizona primary the next year—the first serious challenge McCain had faced since joining the Senate twenty-two years earlier. I imagine the sheer indignity of the situation must have made McCain’s blood boil, but the politician in him dictated that he quickly shore up his right flank—and joining forces with me on major environmental legislation certainly wasn’t going to do that. We soon got word through Lieberman’s office that McCain was off the bill.

  At the same time, not a single House Republican would even consider cosponsoring climate legislation. That left the two senior Democrats on the relevant committee, Henry Waxman of California and Ed Markey of Massachusetts, content to draft a bill on their own and pass it solely with Democratic votes. In the short term, this made our lives easier: Waxman and Markey broadly aligned with us on policy, their staffs knew what they were doing, and they welcomed our suggestions. But it also meant that the two congressmen felt little need to consider views less liberal than existed inside their own caucus, raising the prospect that the bill they produced could end up reading like an environmental group’s wish list and send a number of fence-sitting Senate Democrats into cardiac arrest.

  Hoping to head off a House/Senate impasse, Rahm gave Phil Schiliro the unenviable task of urging Waxman to start a dialogue with the likely sponsors of a Senate bill, including Lieberman, so that we could get a jump on narrowing the differences between the two sides. A week or so later, I called Phil into the Oval and asked how the conversation with Waxman had gone. Phil dropped his gangly frame onto the couch, grabbed an apple from the bowl I kept on the coffee table, and shrugged.

  “Not great,” he said, his voice landing somewhere between a chuckle and a sigh. Before joining my team, Phil had spent years working in Waxman’s office, most recently as chief of staff, so the two knew each other well. Waxman had given him an earful, he said, channeling the frustration that House Dems already felt toward the Senate Dems (and us) for what they considered to be a litany of previous sins: scaling back the Recovery Act, failing to even bring various House bills up for a vote for fear of putting moderate or conservative senators in a bind, and generally being spineless tools.

  “He said the Senate is ‘the place where good ideas go to die,’ ” Phil said.

  “Can’t argue with him there,” I said.

  “We’ll just have to sort it all out in a conference committee, after each chamber’s passed its own bill,” Phil said, trying his best to project an upbeat tone.

  In our effort to keep the House and Senate bills at least within shouting distance of each other, we did have one thing working in our favor: Lieberman and Boxer, as well as the House Dems and most environmental groups, had embraced a cap-
and-trade system similar to what I’d endorsed during the campaign as the preferred mechanism to achieve big cuts in greenhouse gases. Here’s how it worked: The federal government would cap the amount of greenhouse gas companies could emit, leaving it up to each company to figure out how to hit those targets. Companies exceeding their limit would pay a penalty. Companies that stayed below their limit could sell their unused pollution “credits” to less-efficient businesses. By setting a price on pollution and creating a market for environmentally friendly behavior, a cap-and-trade approach gave corporations an incentive to develop and adopt the latest green technologies; and with each technological advance, the government could lower the caps even further, encouraging a steady and virtuous cycle of innovation.

  There were other ways to put a price on greenhouse gas pollution. Some economists thought it was simpler, for example, to impose a “carbon tax” on all fossil fuels, discouraging their use by making them more expensive. But one of the reasons everyone had converged on a cap-and-trade proposal was that it had already been successfully tried—and by a Republican president, no less. Back in 1990, George H. W. Bush’s administration had put a cap-and-trade system in place to curb the sulfur dioxide coming out of factory smokestacks and contributing to acid rain, which was destroying lakes and forests across the East Coast. Despite dire predictions that the measure would lead to factory closures and mass layoffs, the offending companies had quickly figured out cost-efficient ways to retrofit their factories, and within a few years, the problem of acid rain had all but disappeared.

  Setting up a cap-and-trade system for greenhouse gas emissions involved a whole new level of scale and complexity. The fights over each detail promised to be fierce, with lobbyists swarming and every member of Congress whose vote we needed angling for this or that concession. And as the struggle to pass healthcare legislation was also teaching me, the mere fact that Republicans had once supported a policy idea championed by one of their own did not mean they’d support the exact same idea coming from a Democratic president.