April 17 (Bloomberg) -- House Energy and Commerce Committee Chairman Henry Waxman said he won’t compromise on his proposed 20 percent reduction in greenhouse gases over the next decade in the face of criticism from lawmakers who say the economy could suffer.

“I want to keep those caps in place,” Waxman said in an interview on Bloomberg Television’s “Political Capital with Al Hunt” airing this weekend. “It’s what the scientists are telling us we must do” to avoid a global catastrophe, he said.

Waxman, a California Democrat, said he would be willing to give ground in other areas of the measure, which comes up for its opening round of debate in Congress next week.

The four days of subcommittee hearings will follow the Environmental Protection Agency’s ruling today that greenhouse gases pose a danger to the public, a finding that opens the way for new U.S. regulation of cars, power plants and factories.

Waxman, 69, said he expects his climate bill, as well as health-care reform legislation, to clear the House before August.

He took issue with President Barack Obama’s plan to use 80 percent of the estimated $646 billion in revenue raised from carbon permits under a so-called cap-and-trade system to help fund middle-class tax cuts.

“I don’t think that’s the best use of it,” Waxman said. “By and large” it should be spent on green technologies, he said, and part of it could be used to “help consumers with higher energy costs” and hard-hit industries, “especially coal.”

Under the Obama plan only $120 billion would go to green technologies.

Support From Dingell

Waxman said Representatives John Dingell, a Michigan Democrat who once chaired the committee, and Rick Boucher, a Democrat from Virginia’s coal country, will support his 20 percent reduction even though they have previously called for a reduction of just 6 percent.

Dingell and Boucher may be willing to accept the higher reductions in part because of Waxman’s proposal for allocating the permit revenue.

Waxman said Congress, and not the EPA, should determine how to regulate greenhouse-gas emissions.

“I don’t think the EPA ought to be regulating carbon emissions,” he said. Instead, pollution should be controlled by his climate-change bill, which proposes a cap on the amount a company can pollute along with the ability of companies to buy and sell pollution permits.

Warning on Costs

Critics of the bill, including House Minority Leader John Boehner, an Ohio Republican, say the climate-change bill will dramatically raise energy costs, effectively levying a tax on consumers and industries.

Waxman said he’s concerned about the impact on the industrial areas of the country “in the short term.”

“That’s why we’re looking to use some of the funds generated by the cap-and-trade program to redirect it to help consumers with higher energy costs,” he said.

Waxman’s measure, intended to cut greenhouse gases by 20 percent by 2020 compared with 2005 levels, is more aggressive than Obama’s proposal for a 14 percent cut by 2020.

The plan’s centerpiece is the cap-and-trade system that sets limits on greenhouse-gas pollution, makes companies get permits for emissions, and encourages power plants and factories to switch to clean energy such as wind and solar.

Waxman’s plan leaves undecided whether some allowances for pollution would be given away. He said the subject is still under negotiation.

Justice Memos

On the Justice Department’s release of Bush administration legal memos on the treatment of terror suspects, Waxman said he supports the creation of a commission to investigate alleged abuses, with the possibility that the inquiry will lead to prosecution.

“It should to all the way to the top,” said Waxman.

Investigating the financial meltdown on Wall Street, often Waxman’s target in his former role as the chairman of the House Oversight and Government Reform Committee, is no longer on his agenda.

“I’m much too busy,” Waxman said.

To contact the reporter on this story: Christopher Stern in Washington at cstern3@bloomberg.net

Last Updated: April 17, 2009 14:37 EDT