Obama Aide Previews Carbon-Emissions Rules for Democrats

President Barack Obama’s top adviser on climate change previewed tightly held power-plant emissions rules for a handful of senior U.S. House Democrats, signaling the high stakes of the regulation for Obama’s legacy.

White House counselor John Podesta told Democrats gathered yesterday in House Minority Leader Nancy Pelosi’s office that he expects some Republican governors to resist the rules but not with the same intensity that they fought the Affordable Care Act, said two people who attended. That’s because the alternative to cooperating is enforcement by the Environmental Protection Agency, said the people, who requested anonymity.

EPA officials have been publicly silent about the contours of the regulation, which is due to be released June 2. The agency is expected to seek reductions in carbon emissions of as much as 25 percent while allowing power systems to reap cuts both inside and outside the confines of coal plants, according to people familiar with the proposal.

Representative Henry Waxman of California, the top Democrat on the Energy and Commerce Committee, confirmed yesterday that the meeting with Podesta had taken place.

“Because of my strong concern about the climate change issue, I have been in touch with the administration on these rules as they have been developing,” Waxman said in an interview.

While many Democrats are eager to take aggressive action to combat climate change, others in the party -– particularly those from coal-producing regions -– worry that the rule will be politically painful as it forces power-plant closures and threatens to increase electricity rates for consumers.

Democratic Defections

One House Democratic lawmaker said the administration is bracing for a floor fight in which Republicans will seek to embarrass Obama with a vote against the rule. While Democrats know they’ll lose some coal state members in such a vote, they would prefer to see the number of defections closer to 10 rather than 50, said the lawmaker, who asked not to be identified to speak about confidential deliberations.

It’s unlikely Republicans could muster the votes needed to overturn the rule in the Democratic-controlled Senate.

House Speaker John Boehner, an Ohio Republican, asked about the rule at a morning briefing yesterday, said he wasn’t “qualified to debate the science over climate change.”

“But I am astute enough to understand that every proposal that has come out of this administration to deal with climate change involves hurting our economy and killing American jobs,” Boehner told reporters. “That can’t be the prescription for dealing with changes in our climate.”

Party Votes

The Democrats who met with Podesta yesterday are key to rallying party votes in the House. They included Pelosi, Waxman, House Minority Whip Steny Hoyer of Maryland and Chris Van Hollen of Maryland, Doris Matsui of California, Gerry Connolly of Virginia, and Gary Peters of Michigan, according to a lawmaker who attended and asked not to be identified discussing the meeting.

Democrats familiar with the meeting described the discussion as light on substance and heavy on talking points. States are expected to have flexibility to devise their own systems for reducing emissions, according to several people briefed on the rule.

Obama has pledged to reduce U.S. greenhouse gases about 17 percent by 2020 over 2005 levels, with deeper cuts to follow. At the heart of that effort is a plan being considered by the president that would cut power-plant emissions. The EPA proposal is scheduled to become final one year from June 2.

‘Carbon Budget’

The administration is considering an approach that would allow states to set up their own systems to achieve mandated cuts, including setting an overall “carbon budget” for states and leaving it up to them to meet the limits, according to people familiar with the plan under discussion.

EPA Administrator Gina McCarthy said last week the rules will give states “flexibility to develop plans on how to achieve those reductions in a way that’s economically beneficial to them.”

The rules will let states “establish their own energy policies as long as the carbon pollution reductions that we are going to require in this rule actually are achieved,” she said at an event in Seattle.

The U.S. Chamber of Commerce warned this week that the climate plan could result in a $50 billion a year hit to the U.S. economy. Environmental groups counter that spending on energy efficiency and renewable sources of power will spur the economy along and add jobs. They say the approach could be a net benefit to the country.

To contact the reporters on this story: Derek Wallbank in Washington at dwallbank@bloomberg.net; Jonathan Allen in Washington at jallen149@bloomberg.net; Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net; Jodi Schneider at jschneider50@bloomberg.net; Steven Komarow at skomarow1@bloomberg.net Michael Shepard

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