Who Will Pick up the Pieces?

It's the thesis of my new blog, "Boomergeddon" (or, "The Retirement Crisis") that the federal government will reach the brink of financial insolvency within the next two or three decades. If you buy my argument, another question logically poses itself: Who will provide essential government services when the feds go broke?

Not California, that's for sure. In the aftermath of Tuesday's referenda, in which voters roundly rejected some $16 billion in tax increases, the finances of the "tarnished gold" state are looking more precarious than ever. California is an instance of a state whose governance system has failed. Blame the Ds, blame the Rs, blame whom you choose, but the fact remains, the state is all but ungovernable. And when the federal government follows suit, circa 2030, where would you prefer to be living?

I explore that question in my latest blog post, "Who Will Pick up the Pieces," where I include a table that might be helpful in making that decision: the current bond ratings of the 50 states. If If California is a prelude to a larger, society-wide disaster, only the fiscally strong will survive. Virginia is one. Go see who the others are.

"Cap and Trade" Part Two

Funny how movements spring from nowhere.

That's the case with the Waxman-Markey "Cap and Trade" bill to restrict greenhouse gases that I filed about yesterday. There's no question that the bill has legs given the orgy of lobbying over it that seems to have sprung from nowhere and is supplanting the economic crisis and the still-sizzling financial meltdown.

Why, for example, are right-wing groups suddenly having seminars about Cap and Trade? Why are conservatives such as U.S. Rep Eric Cantor equating the Waxman bill as a threat on the level of global terrorism and Iran? What's with the timing of the sudden anxiety?

According to the Center for Public Integrity, a group that tracks lobbyists, the renewed interest quietly gained steam in this years first quarter when the business community realized that Barack Obama's presidency meant that some kind of global warming law was likely. As many as 140 companies started circling their wagons, including makers of blue jeans, computer serves and sneakers. Food firms such as Land O Lakes, Tysons and the National Turkey Federation grabbed sand bags. Other than Duke Energy, whose CEO backs Cap and Trade, many utilities had been quiet but not any more.

The Center lists the "Climate Top 10" of big-time lobbying firms that lead the lobbying pack. Richmond's very own Hunton & Williams makes the cut with seven power, oil and gas companies.

Right wing advocacy groups, such as the so-called Thomas Jefferson Institute for Public Policy, are setting up seminars to pump out their propaganda about the Waxman bill. Their call to arms is the supposed expense to stop global warming. The Jefferson crowd, which unfortunately was given and has seriously degraded the Bacons Rebellion e-zine, picked three speakers at a recent seminar at the Lewis Ginter Botanical Garden in Richmond who were obviously dogmatically correct and in tune with the institute's world view which is shaped by the many lobbyists who run the organization.

One speaker claimed that Waxman-Markey would cost the average family $3,000. Funny but the Congressional Budget Office puts the figure at $1,600, but what's $1,400 when you're trying to frame an important environmental initiative as needless and costly?

As for Cantor's concern, consider that for the past four of his election campaigns, Cantor has received money from powerful electric utility Dominion. The firm has given him a total of $88,097, according to the OpenSecrets, a contribution data base, and has been among the top five Cantor donors each time.

To sure sure, lobbyists are springing to action because so much money is at stake with whatever approach goes to cut greenhouse gas emissions. The flurry of activity now means one thing: Waxman-Markey really does have a chance.

Peter Galuszka

 

Is "Cap and Trade" Finally Here?

Is a serious plan finally in the making to limit carbon dioxide emissions in the U.S.?

It very well could be since a number of key Democrats in Congress, including Rick Boucher from the Virginia coalfields, have agreed to a number of closed-door compromises that might make it fly. The bill is being shepherded by Rep. Henry Waxman, a California Democrat.

If passed, the bill could have huge implications for Virginia. For one reason, it would affect how much CO2 that Dominion, one of the largest coal-burning utilities in the country, can pump into the air. Ditto American Electric Power, the nation's No. 1 coal-burner, and Old Dominion Electric Cooperative, a Henrico County-based utility serving rural areas in Virginia, Maryland and Delaware, that wants to build a monster $6 billion coal-burning plant in Surry County, not all that far from the tourist havens of Williamsburg and Jamestown.

As it now stands, the bill would set a limit on greenhouse gases. Carbon dioxide would have to be cut by 17 percent by 2020 compared with 2005 emissions, and 83 percent by 2050. Unlike a policy favored by President Barack Obama, the right to emit greenhouse gases -- making up 85 percent of the total -- would be given away. Obama wanted them sold at auction.

Utilities would get 35 percent of the allowances and billions of dollars would be spent to help research new technologies that would capture CO2 at big generating plants and somehow send it deep in the earth into a kind of permanent storage. Doing so, would keep utilities using coal and thus help the Virginia coalfields. Boucher helped orchestrate the idea and it has support from such coalfield groups as the United Mine Workers of America.

Not everybody likes the effort. Eric Cantor, the Henrico Republican who is Minority Whip, told a luncheon at the World Affairs Council of Greater Richmond Monday that the bill "would do nothing but raise costs." I was at the luncheon since I am a WAC member and later spoke to Cantor who said that the Waxman bill is much more restrictive than another proposal shot down last year that had been pushed by Senator Joe Lieberman and our own John Warner. I find Cantor's position curious since his own party's candidate for president last year backed some kind of cap and trade law.

The Waxman bill is drawing fire from the other side of the aisle, too. Greenpeace USA says that Waxman's initially laudable effort has been undermined by lobbyists.

So, what to make of this? First off, something needs to be done about CO2 and global warming despite the head-in-the-sand naysayers, including (dare I say it) our very own and beloved Jim Bacon, founder of this blog. Secondly, giving away rather than selling allotments in "cap and trade" does favor utilities and that is reason for pause. Thirdly, finding a way to deep six CO2 in the earth sounds good but the technologies aren't mature and it might further other bad aspects of coal, such as mountaintop removal. Clearing the way for more coal use (55 percent of electricity in the U.S. comes from coal) might only aggravate the serious damage mountaintop removal is doing to Central Appalachia.

True, the economy is still a mess, but what happens with Waxman's bill will have huge long-term implications, such as whether large portions of the Eastern Shore and Virginia Beach face a waterlogged future.

Peter Galuszka

Check Out the "Retirement Crisis" Blog

Kudos to EMR and Peter G. for keeping Bacon's Rebellion a lively venue for discussing real issues during my prolonged absence. I'm parachuting in just to say hello -- and to let Bacon's Rebellion readers know about my new blog, The Retirement Crisis.

While Bacon's Rebellion explores the theme of environmental sustainability, The Retirement Crisis tackles the theme of fiscal sustainability. Both are weighty. Both are game changers. No, that's too mild. Both are civilization changers.

But of the two, I believe that fiscal collapse is more imminent than the environmental collapse. And if we can't forestall the one, the United States won't have the resources to avert the other.

The new blog focuses on the "retirement crisis" in a raw appeal to peoples' self interest. Questions about multitrillion-dollar budget deficits, age wave-induced shortages of global capital, the overwhelming burden of carrying the national debt, and the disintegration of the retirement safety net are too abstract for most Americans to wrap their brains around. By making the case that the federal government will be unable to keep the promises made regarding Social Security, Medicare, Medicaid and other entitlements, I'm hoping I can make the case that these issues will impact readers directly.

I urge Bacon's Rebellion readers to bookmark The Retirement Crisis or sign up for the RSS feed. I promise you, we'll have a lot of fun -- and perhaps even nudge the needle of debate at the national level, just as we did with Bacon's Rebellion in Virginia.