Hill Heat

Development of oil shale resources

Wonk Room — Thu, 15 May 2008 14:30:00 -0500

Markup of H.R. 6049, the Energy and Tax Extenders Act of 2008”

The Cunctator — Thu, 15 May 2008 10:30:00 -0500

The House Committee on Ways and Means today passed bipartisan legislation to extend vital tax relief to millions of families, strengthen investment opportunities for American businesses and encourage the production and use of renewable energy. The legislation, H.R. 6049, the Energy and Tax Extenders Act of 2008, was introduced by Committee Chairman Charles B. Rangel (D-NY) and could be considered by the full House of Representatives as early as next week. H.R. 6049 passed the Committee by a vote of 25-12.

Information.

H.R. 6049 Energy and Tax Extenders Act of 2008

Summary: H.R. 6049, the Energy and Tax Extenders Act of 2008, will provide almost $20 billion of tax incentives for investment in renewable energy, carbon capture and sequestration demonstration projects, energy efficiency and conservation. The bill will also extends $27 billion of expiring temporary tax provisions, including the research and development credit, special rules for active financing income, the State and local sales tax deduction, the deduction for out-of-pocket expenses for teachers, and the deduction for qualified tuition expenses. In addition, the bill provides almost $10 billion of additional tax relief for individuals through an expansion of the refundable child tax credit and a new standard deduction for property taxes. The bill would be primarily offset by closing a tax loophole that allows individuals that work for certain offshore corporations, such as hedge fund managers, to defer tax on their compensation and would delay the effective date of a tax benefit that has not yet taken effect for multinational corporations operating overseas.

ENERGY TAX INCENTIVES

I. ENERGY PRODUCTION INCENTIVES

Renewable Energy Incentives

Long-term extension and modification of renewable energy production tax credit. The bill extends the placed-in-service date for wind facilities for one year (through December 31, 2009). The bill would also extend the placed-in-service date for three years (through December 31, 2011) for certain other qualifying facilities: closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; and trash combustion facilities. The bill also includes a new category of qualifying facilities that will benefit from the longer December 31, 2011 placed-in-service date—facilities that generate electricity from marine renewables (e.g., waves and tides). The bill would cap the aggregate amount of tax credits that can be earned for these qualifying facilities placed in service after December 31, 2009 to an amount that has a present value equal to 35% of the facility’s cost. The bill clarifies the availability of the production tax credit with respect to certain sales of electricity to regulated public utilities and updates the definition of an open-loop biomass facility, the definition of a trash combustion facility, and the definition of a nonhydroelectric dam. This proposal is estimated to cost $7.046 billion over ten years.

Long-term extension and modification of solar energy and fuel cell investment tax credit. The bill extends the 30% investment tax credit for solar energy property and qualified fuel cell property and the 10% investment tax credit for microturbines for six years (through the end of 2014). It also increases the $500 per half kilowatt of capacity cap for qualified fuel cells to $1,500 per half kilowatt of capacity. The bill removes an existing limitation that prevents public utilities from claiming the investment tax credit. The bill would also provide a new 10% investment tax credit for combined heat and power systems. The bill also allows these credits to be used to offset alternative minimum tax (AMT). This proposal is estimated to cost $1.376 billion over 10 years.

Long-term extension and modification of the residential energy-efficient property credit. The bill would extend the credit for residential solar property for six years (through the end of 2014). The bill would also increase the annual credit cap (currently capped at $2,000) to $4,000. The bill would include residential small wind equipment and geothermal heat pumps as property qualifying for this credit. The bill also allows the credit to be used to offset alternative minimum tax (AMT). This proposal is estimated to cost approximately $666 million over ten years.

Sales of electric transmission property. The bill extends the present-law deferral of gain on sales of transmission property by vertically integrated electric utilities to FERC-approved independent transmission companies. Rather than recognizing the full amount of gain in the year of sale, this provision allows gain on such sales to be recognized ratably over an 8-year period. The rule applies to sales before January 1, 2010. This proposal is revenue neutral over 10 years.

New Clean Renewable Energy Bonds (“CREBs”). The bill authorizes $2 billion of new clean renewable energy bonds to finance facilities that generate electricity from the following resources: wind; closed-loop biomass; open-loop biomass; geothermal; small irrigation; hydropower; landfill gas; marine renewable; and trash combustion facilities. This $2 billion authorization will be subdivided into thirds: 1/3 will be available for qualifying projects of State/local/tribal governments; 1/3 for qualifying projects of public power providers; and 1/3 for qualifying projects of electric cooperatives. This proposal is estimated to cost $548 million over 10 years.

Carbon Mitigation Provisions

Carbon capture and sequestration (CCS) demonstration projects. The bill would provide $1.5 billion of tax credits for the creation of advanced coal electricity projects and certain coal gasification projects that demonstrate the greatest potential for carbon capture and sequestration (CCS) technology. Of these $1.5 billion of incentives, $1.25 billion would be awarded to advanced coal electricity projects and $250 million would be awarded to certain coal gasification projects. These tax credits would be awarded by Treasury through an application process, with the applicants that demonstrate the greatest carbon capture and sequestration percentage of total CO2 emissions receiving the highest priority. Applications will not be considered unless applicants can demonstrate that either their advanced coal electricity project would capture and sequester at least 65% of the facility’s carbon dioxide emissions or that their coal gasification project would capture and sequester at least 75% of the facility’s carbon dioxide emissions. Once these credits are awarded, recipients that fail to meet these minimum levels of carbon capture and sequestration would forfeit these tax credits. This proposal is estimated to cost $1.422 billion over 10 years.

Refund of certain coal excise taxes unconstitutionally collected from exporters. The Courts have determined that the Export Clause of the U.S. Constitution prevents the imposition of the coal excise tax on exported coal and, therefore, taxes collected on such exported coal are subject to a claim for refund. The bill would create a new procedure under which certain coal producers and exporters may claim a refund of these excise taxes that were imposed on coal exported from the United States. Under this procedure, coal producers or exporters that exported coal during the period beginning on or after October 1, 1990 and ending on or before the date of enactment of the bill, may obtain a refund (plus interest) from the Treasury of excise taxes paid on such exported coal and any interest accrued from the date of overpayment. _This proposal is estimated to cost $199 million over 10 years._

Solvency for the Black Lung Disability Trust Fund. The bill would enact the President’s proposal to bring the Black Lung Disability Trust Fund out of debt. Under current law, an excise tax is imposed on coal at a rate of $1.10 per ton for coal from underground mines and $0.55 per ton for coal from surface mines (aggregate tax per ton capped at 4.4 percent of the amount sold by the producer). Receipts from this tax are deposited in the Black Lung Disability Trust Fund, which is used to pay compensation, medical and survivor benefits to eligible miners and their survivors and to cover costs of program administration. The Trust Fund is permitted to borrow from the general fund any amounts necessary to make authorized expenditures if excise tax receipts do not provide sufficient funding. Reduced rates of excise tax apply after the earlier of December 31, 2013 or the date on which the Black Lung Disability Trust Fund has repaid, with interest, all amounts borrowed from the general fund of the Treasury. The President’s Budget proposes that the current excise tax rate should continue to apply beyond 2013 until all amounts borrowed from the general fund of the Treasury have been repaid with interest. After repayment, the reduced excise tax rates of $0.50 per ton for coal from underground mines and $0.25 per ton for coal from surface mines would apply (aggregate tax per ton capped at 2 percent of the amount sold by the producer). The bill would enact the President’s proposal. This proposal is estimated to raise $1.287 billion over 10 years.

Carbon audit of the tax code. The bill directs the Secretary of the Treasury to request that the National Academy of Sciences undertake a comprehensive review of the tax code to identify the types of specific tax provisions that have the largest effects on carbon and other greenhouse gas emissions and to estimate the magnitude of those effects. This proposal has no revenue effect.

II. TRANSPORTATION AND DOMESTIC FUEL SECURITY

Creates a new tax credit for cellulosic biofuels. The bill would create a new $1.01 per gallon tax credit for the production of cellulosic biofuels. This tax credit will be available through 2015. This proposal is estimated to cost $1.145 billion over ten years. Expansion of allowance for property to produce cellulosic alcohol. Under current law, taxpayers are allowed to immediately write off 50% of the cost of facilities that produce cellulosic ethanol if such facilities are placed in service before January 1, 2013. Consistent with other provisions in the bill that seek to be technology neutral, the bill would allow this write off to be available for the production of other cellulosic biofuels in addition to cellulosic ethanol. This proposal is estimated to be revenue neutral over 10 years.

Extension of biodiesel production tax credit; extension and modification of renewable diesel tax credit. The bill extends for one year (through December 31, 2009) the $1.00 per gallon production tax credits for biodiesel and the small biodiesel producer credit of 10 cents per gallon. The bill also extends for one year (through December 31, 2009) the $1.00 per gallon production tax credit for diesel fuel created from biomass. The bill eliminates the current-law disparity in credit for biodiesel and agri-biodiesel and eliminates the requirement that renewable diesel fuel must be produced using a thermal depolymerization process. As a result, the credit will be available for any diesel fuel created from biomass without regard to the process used so long as the fuel is usable as home heating oil, as a fuel in vehicles, or as aviation jet fuel. The bill also clarifies that the $1 per gallon production credit for renewable diesel is limited to diesel fuel that is produced solely from biomass. Diesel fuel that is created by co-processing biomass with other feedstocks (e.g., petroleum) will be eligible for the 50 cent per gallon tax credit for alternative fuels. This proposal is estimated to cost $456 million over 10 years.

Reduces and modifies the ethanol tax credit. The bill reduces the current-law ethanol tax credit by more than 10% from 51 cents per gallon to 45 cents per gallon. In addition to this change, the bill would also limit the extent to which denaturants (i.e., chemicals added to ethanol and other alcohol fuels to make them undrinkable) may be counted in calculating the available credit. This proposal is estimated to raise $1.327 billion over 10 years.

Plug-in electric drive vehicle credit. The bill establishes a new credit for each qualified plug-in electric drive vehicle placed in service during each taxable year by a taxpayer. The base amount of the credit is $3,000. If the qualified vehicle draws propulsion from a battery with at least 5 kilowatt hours of capacity, the credit amount is increased by $200, plus another $200 for each kilowatt hour of battery capacity in excess of 5 kilowatt hours up to 15 kilowatt hours. Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the manufacturer records 60,000 sales. The credit is reduced in following calendar quarters. The credit is available against the alternative minimum tax (AMT). This proposal is estimated to cost $1.056 billion over 10 years.

Incentives for idling reduction units and advanced insulation for heavy trucks. The bill provides an exemption from the heavy vehicle excise tax for the cost of idling reduction units, such as auxiliary power units (APUs), which are designed to eliminate the need for truck engine idling (e.g., to provide heating, air conditioning, or electricity) at vehicle rest stops or other temporary parking locations. The bill would also exempt the installation of advanced insulation, which can reduce the need for energy consumption by transportation vehicles carrying refrigerated cargo. Both of these exemptions are intended to reduce carbon emissions in the transportation sector. This proposal is estimated to cost $96 million over 10 years.

Restructuring of New York Liberty Zone tax credits. The bill would implement a proposal included in the President’s FY 2009 Budget to provide the City of New York and the State of New York with tax credits for expenditures made for transportation infrastructure projects connecting with the New York Liberty Zone. This proposal is estimated to cost $1.117 billion over 10 years.

Fringe benefit for bicycle commuters. The bill allows employers to provide employees that commute to work using a bicycle limited fringe benefits to offset the costs of such commuting (e.g., bicycle storage). This proposal is estimated to cost $10 million over 10 years.

Extension and increase of alternative refueling stations tax credit. The bill increases the 30% alternative refueling property credit (capped at $30,000) to 50% (capped at $50,000). The credit provides a tax credit to businesses (e.g., gas stations) that install alternative fuel pumps, such as fuel pumps that dispense E85 fuel. The bill also extends this credit through the end of 2010. This proposal is estimated to cost $156 million over ten years.

Comprehensive study of biofuels. The bill directs the Secretary of the Treasury, in consultation with the Secretary of Agriculture and the Secretary of Energy and the Administrator of the Environmental Protection Agency, to request that the National Academy of Sciences produce an analysis of current scientific findings relating to the future production of biofuels and the domestic effects of a dramatic increase in the production of biofuels. This proposal has no revenue effect.

III. ENERGY CONSERVATION AND EFFICIENCY

Qualified Energy Conservation Bonds. The bill creates a new category of tax credit bonds to finance State and local government programs and initiatives designed to reduce greenhouse gas emissions. There is a national limitation of $3 billion which is allocated to States, municipalities and tribal governments. This proposal is estimated to cost $1.027 billion over 10 years.

Extension and modification of credit for energy-efficiency improvements to existing homes. The bill extends the tax credits for energy-efficient existing homes for one year (through December 31, 2008) and includes energy-efficient biomass fuel stoves as a new class of energy-efficient property eligible for a consumer tax credit of $300. This proposal is estimated to cost $1.061 billion over 10 years.

Extension of energy-efficient commercial buildings. The bill extends the energy-efficient commercial buildings deduction for five years (through December 31, 2013). This proposal is estimated to cost $891 million over 10 years.

Modification and extension of energy-efficient appliance credit. The bill would modify the existing energy-efficient appliance credit and extend this credit for three years (through the end of 2010). This proposal is estimated to cost $323 million over 10 years.

Accelerated depreciation for smart meters and smart grid systems. The bill would provide accelerated depreciation for smart electric meters and smart electric grid systems. Under current law, taxpayers are generally able to recover the cost of this property over the course of 20 years. The bill would cut the cost recovery time in half by allowing taxpayers to recover the cost of this property over a 10-year period. This proposal is estimated to cost $921 million over 10 years.

Extension and modification of qualified green building and sustainable design project bond. The bill would extend the authority to issue qualified green building and sustainable design project bonds through the end of 2012. Authority to issues these bonds is currently set to expire on September 30, 2009. The bill would also clarify the application of the reserve account rules to multiple bond issuances. This proposal is estimated to cost $45 million over 10 years.

EXTENSION OF TEMPORARY TAX PROVISIONS

I. EXTENDERS PRIMARILY AFFECTING INDIVIDUALS

Extension of the deduction of State and local general sales taxes. The bill extends for one year (through 2008) the election to take an itemized deduction for State and local general sales taxes in lieu of the itemized deduction permitted for State and local income taxes. This proposal is estimated to cost $1.742 billion over 10 years.

Extension of above-the-line deduction for qualified tuition and related expenses. The bill extends the above-the-line tax deduction for qualified education expenses for one year (through 2008). For tax year 2007, the maximum deduction was $4,000 for taxpayers with AGI of $65,000 or less ($130,000 for joint returns) or $2,000 for taxpayers with AGI of $80,000 or less ($160,000 for joint returns). This proposal is estimated to cost $2.603 billion over 10 years.

Extension of special rules for regulated investment companies. The bill would for one year (through 2008) extend the tax treatment of interest-related dividends, short-term capital gain dividends, and other special rules applicable to foreign shareholders that invest in regulated nvestment companies. This proposal is estimated to cost $81 million over 10 years.

Extension of provision encouraging contributions of capital gain real property made for conservation purposes. The bill would extend for one year (through 2008) the increased contribution limits and carryforward period for amounts in excess of these limits for contributions of appreciated real property (including partial interests in real property) for conservation purposes. This proposal is estimated to cost $54 million over 10 years.

Extension of tax-free distributions from individual retirement plans for charitable purposes. The bill would extend for one year (through 2008) the provision that permits tax-free charitable contributions from an Individual Retirement Account (IRA) of up to $100,000 per taxpayer, per taxable year. This proposal is estimated to cost $465 million over 10 years.

Extension of above-the-line deduction for certain expenses of elementary and secondary school teachers. The bill extends for one year the $250 above-the-line tax deduction for teachers and other school professionals for expenses paid or incurred for books, supplies (other than nonathletic supplies for courses of instruction in health or physical education, computer equipment (including related software and services), other equipment, and supplementary materials used by the educator in the classroom for one year (i.e., to expenses paid or incurred in 2008). This proposal is estimated to cost $204 million over 10 years.

Extension of election to include combat pay in earned income for purposes of the earned income credit. The bill extends for one year (through 2008) the special rules that allow members of the armed services to include their combat pay in their earned income in order to qualify for the earned income tax credit. This proposal is estimated to cost $20 million over 10 years.

Extension of special rules for qualified mortgage bonds for veterans. The bill extends for one year (through 2008) the special rules that allows veterans to qualify for State-operated, tax-exempt mortgage revenue bond programs to provide lower-income individuals with access to mortgages with lower interest costs without regard to first-time home buyer requirement. This proposal is estimated to cost $158 million over 10 years.

Extension of special rules for distributions from retirement plans to individuals called to active duty. The bill extends for one year (through 2008) special rules that permit active duty reservists to make penalty-free withdrawals from retirement plans. This proposal is estimated to cost less than $500,000 over 10 years.

Reinstate the exclusion of amounts received under qualified group legal services plans. The bill reinstates for one year (through 2008) a provision that allows individuals to exclude certain amounts received under qualified group legal services plans from income. This proposal is estimated to cost $40 million over 10 years.

II. EXTENDERS PRIMARILY AFFECTING BUSINESSES

Extension of R&D credit. The bill extends the research credit for one year (through 2008). This proposal is estimated to cost $8.761 billion over 10 years.

Extension of Indian employment credit. The bill extends for one year (through 2008) the business tax credit for employers of qualified employees that work and live on or near an Indian reservation. The credit is for wages and health insurance costs paid to qualified employees (up to $20,000) in the current year over the amount paid in 1993. Wages for which the work opportunity tax credit is available are not qualified wages for the Indian employment tax credit. This proposal is estimated to cost $59 million over 10 years.

Extension of New Markets Tax Credit. The bill extends for one year (through 2009) the new markets tax credit, permitting a $3.5 billion maximum annual amount of qualified equity investments. This proposal is estimated to cost $1.315 billion over 10 years.

Extension of railroad track maintenance credit. The bill extends for one year (through 2008) the railroad track maintenance credit. The railroad track maintenance credit provides Class II and Class III railroads (e.g., short-line railroads) with a tax credit equal to 50 percent of gross expenditures for maintaining railroad tracks that they own or lease. This proposal is estimated to cost $165 million over 10 years.

Extension of 15-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant improvements. The bill would extend for one year (through 2008) the special 15-year cost recovery period for certain leasehold and qualified restaurant improvements. Absent an extension of this provision, the cost recovery period for these facilities would be 39 years. This proposal is estimated to cost $5.399 billion over 10 years.

Extension of 7-year straight-line cost recovery period for motorsports entertainment complexes. The bill would extend for one year (through 2008) the special 7-year cost recovery period for property used for land improvement and support facilities at motorsports entertainment complexes. Absent an extension of this provision, the cost recovery period for these facilities would be 15 years. This proposal is estimated to cost $48 million over 10 years.

Extension of accelerated depreciation for business property on an Indian reservation. The bill would extend for one year (through 2008) the placed-in-service date for the special depreciation recovery period for qualified Indian reservation property. In general, qualified Indian reservation property is property used predominantly in the active conduct of a trade or business within an Indian reservation, which is not used outside the reservation on a regular basis and was not acquired from a related person. _ This proposal is estimated to cost $152 million over 10 years.

Extension of expensing of “brownfields” environmental remediation costs. The bill would extend for one year (through 2008) the provision that allows for the expensing of costs associated with cleaning up hazardous (“brownfield”) sites. This proposal is estimated to cost $178 million over 10 years.

Extension of deduction allowable with respect to income attributable to domestic production activities in Puerto Rico. The bill would extend for one year (through 2008) the provision extending the section 199 domestic production activities deduction to activities in Puerto Rico. This proposal is estimated to cost $116 million over 10 years.

Extension of special tax treatment of certain payments to controlling exempt organizations. The bill would extend for one year (through 2008) the special rules for interest, rents, royalties and annuities received by a tax exempt entity from a controlled entity. This proposal is estimated to cost $35 million over 10 years.

Reauthorization of Qualified Zone Academy Bonds (QZABs). The bill allows an additional $400,000,000 of QZAB issuing authority to State and local governments, which can be used to finance renovations, equipment purchases, developing course material, and training teachers and personnel at a qualified zone academy. In general, a qualified zone academy is any public school (or academic program within a public school) below college level that is located in an empowerment zone or enterprise community and is designed to cooperate with businesses to enhance the academic curriculum and increase graduation and employment rates. QZABs are a form of tax credit bonds which offer the holder a Federal tax credit instead of interest. The bill would improve the marketability of these bonds by modifying the current-law arbitrage restrictions. This proposal is estimated to cost $202 million over 10 years.

Extension of tax incentives for investment in the District of Columbia. The bill extends the designation of certain economically depressed census tracts within the District of Columbia as the District of Columbia Enterprise Zone. Businesses and individual residents within this enterprise zone are eligible for special tax incentives. The bill would also extend the $5,000 first-time homebuyer credit for the District of Columbia. The bill would extend both of these provisions for one year (through 2008). This proposal is estimated to cost $129 million over 10 years.

Extension of American Samoa economic development credit. The bill extends for one year (through 2008) the American Samoa economic development credit. In general, this credit provides certain domestic corporations operating in American Samoa with a possessions tax credit to offset their U.S. tax liability on income earned in American Samoa from active business operations, sales of assets used in a business, or certain investments in American Samoa. This proposal is estimated to cost $16 million over 10 years.

Extension of enhanced charitable deduction for contributions of food inventory. The bill would extend for one year (through 2008) the provision allowing businesses to claim an enhanced deduction for the contribution of food inventory. This proposal is estimated to cost $71 million over 10 years.

Enhanced charitable deduction for contributions of book inventories to public schools. The bill would extend for one year (through 2008) the provision allowing C corporations to claim an enhanced deduction for contributions of book inventory to public schools (kindergarten through grade 12). This proposal is estimated to cost $31 million over 10 years.

Extension of enhanced deduction for corporate contributions of computer equipment for educational purposes. The bill would extend for one year (through 2008) a provision that encourages businesses to contribute computer equipment and software to elementary, secondary, and post-secondary schools by allowing an enhanced deduction for such contributions. This proposal is estimated to cost $260 million over 10 years.

Extension of special rule for S corporations making charitable contributions of property. The bill would extend for one year (through 2008) the provision allowing S corporation shareholders to take into account their pro rata share of charitable deductions even if such deductions would exceed such shareholder’s adjusted basis in the S corporation. The bill would also make a technical correction clarifying the application of this provision. This proposal is estimated to cost $62 million over 10 years.

Extension of work opportunity tax credit for Hurricane Katrina employees. The bill would extend for one year (through 2008) the provision that expired in August of 2007 which allowed employers to claim the work opportunity tax credit for hiring employees who were affected by Hurricane Katrina. This proposal is estimated to cost $16 million over 10 years.

Extension of active financing exception. The bill extends the active financing exception from Subpart F of the tax code for one year (through 2009). This proposal is estimated to cost $3.970 billion over 10 years.

Extend look-through treatment of payments between related controlled foreign corporations. The bill extends the current law look-through treatment of payments between related controlled foreign corporations for one year (through 2009). This proposal is estimated to cost $611 million over 10 years.

Extend special expensing rules for certain film and television productions. The bill would extend the current law special expensing rules for U.S. film and television productions for one year (through 2009). This proposal is estimated to cost $10 million over 10 years.

III. OTHER EXTENDERS

Extension of disclosures of certain tax return information. The bill would permanently extend the current-law terrorist activity disclosure provisions and the authority for purposes of coordination with the Department of Veterans Affairs. This proposal estimated to have no revenue effect.

Extension of authority for undercover operations. The bill would permanently extend the authorization for the IRS to engage in certain activities related to undercover operations, such as purchasing property, organizing business entities and use the proceeds from an undercover operation to pay additional expenses incurred in the undercover operation. This proposal is estimated to have a negligible revenue effect.

Extension of temporary increase in limit on cover over of run excise tax revenues to Puerto Rico and the Virgin islands. The bill extends for one year the provision providing for payment of $13.25 per gallon to cover over a $13.50 per proof gallon excise tax on distilled spirits produced in or imported into the United States. This proposal is estimated to cost $96 million over 10 years.

Extension of tax on failure to comply with mental health parity requirements applicable to group health plans. The bill extends on a prospective basis through the end of 2008 the $100 per day excise tax on group health plans that impose limits on mental health benefits that are not imposed on medical and surgical benefits. _This proposal is estimated to cost $25 million over 10 years._

ADDITIONAL TAX RELIEF

I. INDIVIDUAL TAX RELIEF

Additional standard deduction for real property taxes. The bill would provide an additional standard deduction for State and local real property taxes paid or accrued by taxpayers who claim the regular standard deduction. The maximum amount that may be claimed under this provision is $700 for joint filers and $350 for individuals. This proposal applies only for 2008. This proposal is estimated to cost $1.174 billion over 10 years.

Change in refundable child credit. The bill would increase the eligibility for the refundable child tax credit in 2008. The child tax credit is refundable to the extent of 15 percent of the taxpayer’s earned income in excess of approximately $12,050 as a result of inflation adjustments to the original floor of $10,000. The bill would reduce this floor to $8,500 for 2008. This proposal is estimated to cost $3.129 billion over 10 years.

Extension and modification of AMT credit allowance against incentive stock options (ISOs). Exercise of an ISO is a preference in the individual minimum tax. The amount of the preference is the difference between the market price on the date of exercise and the option price. In the past, many individuals exercised these options and there were dramatic reductions in the value of the stock after exercise. These individuals found that their minimum tax liability far exceeded any gain from the exercise of the option. The bill would waive past underpayments and would guarantee that minimum tax actually paid on the exercise of these options would be returned to the taxpayer. This proposal is estimated to cost $2.291 billion over 10 years.

II. BUSINESS-RELATED PROVISIONS

Uniform treatment of attorney-advanced expenses and court costs in contingency fee cases. Under current law, the tax treatment of attorney-advanced expenses and court costs in contingency fee cases depends on whether the contingency fee is structured as a “net” fee (i.e., the attorney’s compensation is based on a percentage of the gross recovery in the litigation net of the advanced litigation costs) or as a “gross” fee (i.e., the attorney’s compensation is based on a percantage of the gross recovery without regard to the amount of advanced litigation costs). Where the contingency fee is structured as a “gross” fee, the attorney is allowed to take a current deduction for advanced litigation costs as they are paid. Where the contingency fee is structured as a “net” fee, the attorney is not allowed to take a current deduction for advanced litigation costs. The bill would conform the tax treatment of “net” fee arrangements to the tax treatment of “gross” fee arrangements by allowing all advanced litigation costs to be deducted currently by the attorney. This proposal is estimated to cost $1.572 billion over 10 years.

Provisions related to film and television productions. Under current law, taxpayers have not been able to take full advantage of tax incentives that are intended to encourage film and television companies to produce films here in the United States rather than overseas because of a number of technical issues. The bill would fix these issues. This proposal is estimated to cost $468 million over 10 years.

Modification of penalty on understatement of taxpayer’s liability by tax return preparer. The bill would conform the penalty standards for return preparers with the standards for taxpayers. For undisclosed positions, the penalty standard for return preparers is reduced to substantial authority. For disclosed positions, a return preparer generally must have a reasonable basis for the position. For positions involving tax shelters and certain reportable transactions, a return preparer must have a reasonable belief that the position would more likely than not be sustained on the merits. This proposal is estimated to cost $22 million over ten years.

III. EXTENSION AND EXPANSION OF CERTAIN GO ZONE INCENTIVES

Extension and Expansion of Certain Gulf Opportunity (GO) Zone Incentives. The bill would allow taxpayers in affected GO Zone areas to amend prior returns to take into account receipt of hurricane-related recovery grants, waive the start-construction deadline for certain property eligible for bonus deprecation in the GO Zone, and allow projects in two additional counties in Alabama to qualify for tax-exempt bond financing. This provision is estimated to cost $1.333 billion over ten years.

REVENUE PROVISIONS

Current inclusion of deferred compensation paid by certain tax indifferent parties. *The bill would tax individuals on a current basis if such individuals receive deferred compensation from a tax indifferent party. Current law generally allows executives and other employees to defer paying tax on compensation until the compensation is paid. This deferral is made possible by rules that require the corporation paying the deferred compensation to defer the deduction that relates to this compensation until the compensation is paid. Matching the timing of the deduction with the income inclusion ensures that the executive is not able to achieve the tax benefits of deferred compensation at the expense of the Treasury. Instead, the corporation paying the compensation bears the expense of paying deferred compensation as a result of the deferred deduction. Where an individual is paid deferred compensation by a tax indifferent party (such as an offshore corporation in a tax haven jurisdiction), there is no offsetting deduction that can be deferred. As a result, individuals receiving deferred compensation from a tax indifferent party are able to achieve the tax benefits of deferred compensation at the expense of the Treasury. This proposal is estimated to raise $24.289 billion over 10 years.

Delay implementation of worldwide allocation of interest.* In 2004, Congress provided taxpayers with an election to take advantage of a liberalized rule for allocating interest expense between United States sources and foreign sources for purposes of determining a taxpayer’s foreign tax credit limitation. Although enacted in 2004, this election is not available to taxpayers until taxable years beginning after 2008. The bill would delay the phase-in of this new liberalized rule for ten years (for taxable years beginning after 2018). This proposal is estimated to raise $29.962 billion over 10 years.

The source of dramatic movements in commodity markets (agriculture and energy): a change in market fundamentals or influence of institutional investors?

The Cunctator — Thu, 15 May 2008 10:00:00 -0500

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Woody Biomass: Scale and Sustainability

The Cunctator — Thu, 15 May 2008 10:00:00 -0500

Woody biomass refers to wood, branches, and other organic matter from trees and shrubs that can be used as a renewable substitute for fossil fuels in the production of both energy and products. Woody biomass can be an important component in a national renewable electricity standard (RES), a renewable energy feed-in tariff or any other efforts to reduce greenhouse gas emissions.

The Environmental and Energy Study Institute (EESI) invites you to learn about the direct linkage between scale and sustainability inherent in the biomass technologies. A good understanding of this relationship is essential for the development of biomass applications that are economically and environmentally sustainable. Compared to fossil fuel deposits, forests are incredibly dynamic systems. They develop within relatively short time periods (tens to thousands of years) and are subject to sudden and unpredictable disturbances from fires, windstorms, and pest infestations. Forests are also complex systems, created and maintained in a state of flux by the innumerable interactions of biota, soils, topography, hydrology, climate, and human communities; but when forest ecosystems are perceived as static pools of market commodities, the door is opened to unsustainable exploitation. Excessive harvesting and bad management practices result in reduced ecosystem services, biodiversity loss, soil degradation, and other environmental impacts. They also result in the “boom-and-bust” cycles that have traditionally characterized many timber markets, leading to economic stagnation and reduced quality-of-life in many rural, forest-dependent communities.

Sustainable, appropriately-scaled biomass applications, on the other hand, can reverse this trend, providing forest communities with stable jobs, a local source of renewable energy, and full participation in the stewardship of diverse forest ecosystems. There is a wide array of biomass technologies available across a large range of scales, including thermal applications (wood pellets, “combined heat and power” or CHP), electric generation (steam boilers, gasification, co-firing), liquid transportation fuels (cellulosic ethanol, methanol, renewable diesel), and biobased co-products. Determining what is appropriate in a given location is not a small task. It requires a comprehensive evaluation of many resources in addition to the forest itself, such as infrastructure, available labor, and market demand for energy and products. In addition to these quantifiable resources, local culture and public values will also help determine what is appropriate, as well as the management constraints necessary to ensure biodiverse landscapes, ecological functioning, clean water, recreational opportunities, and the other values and environmental services that society demands. These are the topics that will be addressed at the briefing.

Speakers for this event include:

Mark Spurr, Legislative Director, International District Energy Association
Charlie Niebling, Director of Public Affairs, New England Wood Pellet LLC
Christopher Recchia, Executive Director, Biomass Energy Resource Center
Lowell Rasmussen, Master of Planning, University of Minnesota Morris
Marvin Burchfield, Vice President, Decker Energy International, Inc.

This briefing is open to the public and no reservations are required. Please feel free to forward this notice. For more information, contact Jetta Wong at 202-662-1885 (jwong@eesi.org) or Jesse Caputo at 202-662-1882 (jcaputo@eesi.org)

Kempthorne: Polar Bear 'Threatened' By Decline of Arctic Sea Ice, But Drilling Can Continue

Wonk Room — Thu, 15 May 2008 08:16:00 -0500

Originally posted at the Wonk Room.

After years of delay, Secretary of the Interior Dirk Kempthorne made a landmark decision on whether global warming pollution is regulated by the Endangered Species Act (ESA). Kempthorne ruled that the polar bear should be classified as a “threatened species” due to the decline of polar sea ice, critical to its survival. Kempthorne stated:

They are likely to become endangered in the near future.

The Department of Interior, under Secretary Dirk Kempthorne, fought for several years in the courts since 2005 to avoid making a decision on whether the precipitous decline in Arctic sea ice due to global warming is making the polar bear an endangered species. Fish and Wildlife Service director Dale Hall testified in January that there was no significant scientific uncertainty in the endangerment posed by global warming to polar bears—the only legal justification under the Endangered Species Act for a delay.

Kempthone’s decision to follow the science is in marked contrast to Environmental Protection Agency Administrator Stephen Johnson’s action to override his staff in refusing to regulate tailpipe greenhouse gas emissions.

However, Kempthorne also argued vigorously that his decison does not compel the Bush administration to construct a plan to regulate greenhouse gas emissions, repeating President Bush’s entirely spurious claim that would be a “wholly inappropriate use” of the Endangered Species Act. The Interior news release announces, “Rule will allow continuation of vital energy production in Alaska.” Kempthorne claimed that the Marine Mammal Protection Act (MMPA) is “more stringent” than the ESA, despite the court ruling that compelled him to make today’s ruling stating that “the protections afforded under the ESA far surpass those provided by the MMPA.”

Despite his protestations, Kempthorne’s decision clearly calls into question the legality of the sale of oil and gas drilling rights in polar bear habitat on February 6, while the polar bear decision was being illegally delayed.

Kempthorne complained that the Endangered Species Act is “one of the most inflexible” pieces of legislation because it didn’t allow him to consider economic impacts when protecting species like the polar bear from extinction.

From the Department of Interior press release on the 368-page rule:

To make sure the ESA is not misused to regulate global climate change, Kempthorne promised the following actions:
The U.S. Fish and Wildlife Service is proposing a 4(d) rule that states that if an activity is permissible under the stricter standards of the Marine Mammal Protection Act, it is also permissible under the ESA with respect to the polar bear. This rule, effective immediately, will ensure the protection of the bear while allowing us to continue to develop our natural resources in the arctic region in an environmentally sound way.
Director Hall will issue guidance to staff that the best scientific data available today cannot make a causal connection between harm to listed species or their habitats and greenhouse gas emissions from a specific facility, or resource development project or government action.
The Department will issue a Solicitor’s Opinion further clarifying these points.
The Department will propose common sense modifications to the existing ESA regulatory language to prevent abuse of this listing to erect a back-door climate policy outside our normal system of political accountability.

Andy Revkin at Dot Earth concludes, “So this leaves everything as it was, in a way, with the bears facing a transforming ecosystem and environmentalists successful in their litigation, but not necessarily empowered by the listing.” At Climate Progress Joe Romm calls the decision “bye-polar disorder.”

Sierra Club spokesman Josh Dorner tells the Wonk Room, “This is the regulatory equivalent of a signing statement—only this one gets to be challenged in court.”

Responding to the Global Food Crisis

The Cunctator — Wed, 14 May 2008 09:30:00 -0500

Panel 1:

The Honorable Henrietta H. Fore, Administrator and Director of Foreign Assistance Agency for International Development
The Honorable Edward P. Lazear, Chairman, Council of Economic Advisers, Executive Office of the President

Panel 2:

The Honorable Josette Sheeran, Executive Director, World Food Programme, United Nations
The Honorable M. Peter McPherson, President, National Association of State Universities and Land-Grant Colleges

The impacts of climate change on the reliability, security, economics and design of critical energy infrastructure in coastal regions

Wonk Room — Tue, 13 May 2008 10:00:00 -0500

Mercury Legislation

The Cunctator — Tue, 13 May 2008 10:00:00 -0500

Panel 1

Robert J. Meyers, Principal Deputy Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency

Panel 2

Lisa P. Jackson, Commissioner, New Jersey Department of Environmental Protection
Dr. Michael Durham PhD, Officer and Board Member, Institute of Clean Air Companies
Dr. Steven A. Benson, Senior Research Manager/Advisor, Energy and Environment Research Center, The University of North Dakota
Dr. Leonard Levin PhD, Technical Executive, Air Quality Health & Risk Assessment, Electric Power Research Institute
Vickie Patton, Deputy General Counsel, Climate and Air Program, Environmental Defense Fund

Panel 3

Dr. Linda Greer PhD, Director, Public Health Program, Natural Resources Defense Council
Arthur Dungan, President, The Chlorine Institute, Inc.

Text of John McCain's Climate Change Speech and Handouts

Wonk Room — Mon, 12 May 2008 13:39:00 -0500

McCain campaign talking points, question-and-answer and “fact sheet” handouts.

Here is the full text of Sen. John McCain’s (R-AZ) speech on climate change in Portland, Oregon, as prepared for delivery:

Thank you all very much. I appreciate the hospitality of Vestas Wind Technology. Today is a kind of test run for the company. They’ve got wind technicians here, wind studies, and all these wind turbines, but there’s no wind. So now I know why they asked me to come give a speech.
Every day, when there are no reporters and cameras around to draw attention to it, this company and others like it are doing important work. And what we see here is just a glimpse of much bigger things to come. Wind power is one of many alternative energy sources that are changing our economy for the better. And one day they will change our economy forever.

Wind is a clean and predictable source of energy, and about as renewable as anything on earth. Along with solar power, fuel-cell technology, cleaner burning fuels and other new energy sources, wind power will bring America closer to energy independence. Our economy depends upon clean and affordable alternatives to fossil fuels, and so, in many ways, does our security. A large share of the world’s oil reserves is controlled by foreign powers that do not have our interests at heart. And as our reliance on oil passes away, their power will vanish with it.

In the coming weeks I intend to address many of the great challenges that America’s energy policies must meet. When we debate energy bills in Washington, it should be more than a competition among industries for special favors, subsidies, and tax breaks. In the Congress, we need to send the special interests on their way – without their favors and subsidies. We need to draw on the best ideas of both parties, and on all the resources a free market can provide. We need to keep our eyes on big goals in energy policy, the serious dangers, and the common interests of the American people.

Today I’d like to focus on just one of those challenges, and among environmental dangers it is surely the most serious of all. Whether we call it “climate change” or “global warming,” in the end we’re all left with the same set of facts. The facts of global warming demand our urgent attention, especially in Washington. Good stewardship, prudence, and simple commonsense demand that we to act meet the challenge, and act quickly.

Some of the most compelling evidence of global warming comes to us from NASA. No longer do we need to rely on guesswork and computer modeling, because satellite images reveal a dramatic disappearance of glaciers, Antarctic ice shelves and polar ice sheets. And I’ve seen some of this evidence up close. A few years ago I traveled to the area of Svalbard, Norway, a group of islands in the Arctic Ocean. I was shown the southernmost point where a glacier had reached twenty years earlier. From there, we had to venture northward up the fjord to see where that same glacier ends today – because all the rest has melted. On a trip to Alaska, I heard about a national park visitor’s center that was built to offer a picture-perfect view of a large glacier. Problem is, the glacier is gone. A work of nature that took ages to form had melted away in a matter of decades.

Our scientists have also seen and measured reduced snowpack, with earlier runoffs in the Pacific Northwest and elsewhere. We have seen sustained drought in the Southwest, and across the world average temperatures that seem to reach new records every few years. We have seen a higher incidence of extreme weather events. In the frozen wilds of Alaska, the Arctic, Antarctic, and elsewhere, wildlife biologists have noted sudden changes in animal migration patterns, a loss of their habitat, a rise in sea levels. And you would think that if the polar bears, walruses, and sea birds have the good sense to respond to new conditions and new dangers, then humanity can respond as well.

We have many advantages in the fight against global warming, but time is not one of them. Instead of idly debating the precise extent of global warming, or the precise timeline of global warming, we need to deal with the central facts of rising temperatures, rising waters, and all the endless troubles that global warming will bring. We stand warned by serious and credible scientists across the world that time is short and the dangers are great. The most relevant question now is whether our own government is equal to the challenge.

There are vital measures we can take in the short term, even as we focus on long-term policies to mitigate the effects of global warming. In the years ahead, we are likely to see reduced water supplies … more forest fires than in previous decades … changes in crop production … more heat waves afflicting our cities and a greater intensity in storms. Each one of these consequences of climate change will require policies to protect our citizens, especially those most vulnerable to violent weather. Each one will require new precautions in the repair and construction our roads, bridges, railways, seawalls and other infrastructure. Some state local governments have already begun their planning and preparation for extreme events and other impacts of climate change. The federal government can help them in many ways, above all by coordinating their efforts, and I am committed to providing that support.

To lead in this effort, however, our government must strike at the source of the problem—with reforms that only Congress can enact and the president can sign. We know that greenhouse gasses are heavily implicated as a cause of climate change. And we know that among all greenhouse gasses, the worst by far is the carbon-dioxide that results from fossil-fuel combustion. Yet for all the good work of entrepreneurs and inventors in finding cleaner and better technologies, the fundamental incentives of the market are still on the side of carbon-based energy. This has to change before we can make the decisive shift away from fossil fuels.

For the market to do more, government must do more by opening new paths of invention and ingenuity. And we must do this in a way that gives American businesses new incentives and new rewards to seek, instead of just giving them new taxes to pay and new orders to follow. The most direct way to achieve this is through a system that sets clear limits on all greenhouse gases, while also allowing the sale of rights to excess emissions. And this is the proposal I will submit to the Congress if I am elected president—a cap-and-trade system to change the dynamic of our energy economy.

As a program under the Clean Air Act, the cap-and-trade system achieved enormous success in ridding the air of acid rain. And the same approach that brought a decline in sulfur dioxide emissions can have an equally dramatic and permanent effect on carbon emissions. Instantly, automakers, coal companies, power plants, and every other enterprise in America would have an incentive to reduce carbon emissions, because when they go under those limits they can sell the balance of permitted emissions for cash. As never before, the market would reward any person or company that seeks to invent, improve, or acquire alternatives to carbon-based energy. It is very hard to picture venture capitalists, corporate planners, small businesses and environmentalists all working to the same good purpose. But such cooperation is actually possible in the case of climate change, and this reform will set it in motion.

The people of this country have a genius for adapting, solving problems, and inventing new and better ways to accomplish our goals. But the federal government can’t just summon those talents by command – only the free market can draw them out. A cap-and-trade policy will send a signal that will be heard and welcomed all across the American economy. Those who want clean coal technology, more wind and solar, nuclear power, biomass and bio-fuels will have their opportunity through a new market that rewards those and other innovations in clean energy. The market will evolve, too, by requiring sensible reductions in greenhouse gases, but also by allowing full flexibility in how industry meets that requirement. Entrepreneurs and firms will know which energy investments they should make. And the highest rewards will go to those who make the smartest, safest, most responsible choices. A cap-and-trade reform will also create a profitable opportunity for rural America to receive market-based payments ~~- instead of government subsidies -~~ for the conservation practices that store carbon in the soils of our nation’s farms.

We will cap emissions according to specific goals, measuring progress by reference to past carbon emissions. By the year 2012, we will seek a return to 2005 levels of emission … by 2020, a return to 1990 levels … and so on until we have achieved at least a reduction of sixty percent below 1990 levels by the year 2050. In the course of time, it may be that new ideas and technologies will come along that we can hardly imagine today, allowing all industries to change with a speed that will surprise us. More likely, however, there will be some companies that need extra emissions rights, and they will be able to buy them. The system to meet these targets and timetables will give these companies extra time to adapt—and that is good economic policy. It is also a matter of simple fairness, because the cap-and-trade system will create jobs, improve livelihoods, and strengthen futures across our country.

The goal in all of this is to assure an energy supply that is safe, secure, diverse, and domestic. And in pursuit of these objectives, we cannot afford to take economic growth and job creation for granted. A strong and growing economy is essential to all of our goals, and especially the goal of finding alternatives to carbon-based technology. We want to turn the American economy toward cleaner and safer energy sources. And you can’t achieve that by imposing costs that the American economy cannot sustain.

As part of my cap-and-trade incentives, I will also propose to include the purchase of offsets from those outside the scope of the trading system. This will broaden the array of rewards for reduced emissions, while also lowering the costs of compliance with our new emissions standards. Through the sale of offsets – and with strict standards to assure that reductions are real – our agricultural sector alone can provide as much as forty percent of the overall reductions we will require in greenhouse gas emissions. And in the short term, farmers and ranchers can do it in some of the most cost-effective ways.

Over time, an increasing fraction of permits for emissions could be supplied by auction, yielding federal revenues that can be put to good use. Under my plan, we will apply these and other federal funds to help build the infrastructure of a post-carbon economy. We will support projects to advance technologies that capture and store carbon emissions. We will assist in transmitting wind- and solar-generated power from states that have them to states that need them. We will add to current federal efforts to develop promising technologies, such as plug-ins, hybrids, flex-fuel vehicles, and hydrogen-powered cars and trucks. We will also establish clear standards in government-funded research, to make sure that funding is effective and focused on the right goals.

And to create greater demand for the best technologies and practices in energy conservation, we will use the purchasing power of the United States government. Our government can hardly expect citizens and private businesses to adopt or invest in low-carbon technologies when it doesn’t always hold itself to the same standard. We need to set a better example in Washington, by consistently applying the best environmental standards to every purchase our government makes.

As we move toward all of these goals, and over time put the age of fossil fuels behind us, we must consider every alternative source of power, and that includes nuclear power. When our cap-and-trade policy is in place, there will be a sudden and sustained pursuit in the market for new investment opportunities in low-emission fuel sources. And here we have a known, proven energy source that requires exactly zero emissions. We have 104 nuclear reactors in our country, generating about twenty percent of our electricity. These reactors alone spare the atmosphere from about 700 million metric tons of carbon dioxide that would otherwise be released every year. That’s the annual equivalent of nearly all emissions from all the cars we drive in America. Europe, for its part, has 197 reactors in operation, and nations including France and Belgium derive more than half their electricity from nuclear power. Those good practices contribute to the more than two billion metric tons of carbon dioxide avoided every year, worldwide, because of nuclear energy. It doesn’t take a leap in logic to conclude that if we want to arrest global warming, then nuclear energy is a powerful ally in that cause.

In a cap-and-trade energy economy, the cost of building new reactors will be less prohibitive. The incentives to invest in a mature, zero-emissions technology will be stronger. New research and innovation will help the industry to overcome the well known drawbacks to nuclear power, such as the transport and storage of waste. And our government can help in these efforts. We can support research to extend the use of existing plants. Above all, we must make certain that every plant in America is safe from the designs of terrorists. And when all of this is assured, it will be time again to expand our use of one of the cleanest, safest, and most reliable sources of energy on earth.

For all of the last century, the profit motive basically led in one direction—toward machines, methods, and industries that used oil and gas. Enormous good came from that industrial growth, and we are all the beneficiaries of the national prosperity it built. But there were costs we weren’t counting, and often hardly noticed. And these terrible costs have added up now, in the atmosphere, in the oceans, and all across the natural world. They are no longer tenable, sustainable, or defensible. And what better way to correct past errors than to turn the creative energies of the free market in the other direction? Under the cap-and-trade system, this can happen. In all its power, the profit motive will suddenly begin to shift and point the other way – toward cleaner fuels, wiser ways, and a healthier planet.

As a nation, we make our own environmental plans and our own resolutions. But working with other nations to arrest climate change can be an even tougher proposition. China, India, and other developing economic powers in particular are among the greatest contributors to global warming today—increasing carbon emissions at a furious pace – and they are not receptive to international standards. Nor do they think that we in the industrialized world are in any position to preach the good news of carbon-emission control. We made most of our contributions to global warming before anyone knew about global warming.

This set of facts and perceived self-interests proved the undoing of the Kyoto Protocols. As president, I will have to deal with the same set of facts. I will not shirk the mantle of leadership that the United States bears. I will not permit eight long years to pass without serious action on serious challenges. I will not accept the same dead-end of failed diplomacy that claimed Kyoto. The United States will lead and will lead with a different approach—an approach that speaks to the interests and obligations of every nation.

Shared dangers mean shared duties, and global problems require global cooperation. The United States and our friends in Europe cannot alone deal with the threat of global warming. No nation should be exempted from its obligations. And least of all should we make exceptions for the very countries that are accelerating carbon emissions while the rest of us seek to reduce emissions. If we are going to establish meaningful environmental protocols, then they must include the two nations that have the potential to pollute the air faster, and in greater annual volume, than any nation ever in history.

At the same time, we will continue in good faith to negotiate with China and other nations to enact the standards and controls that are in the interest of every nation – whatever their stage of economic development. And America can take the lead in offering these developing nations the low-carbon technologies that we will make and they will need. One good idea or invention to reduce carbon emissions is worth a thousand finely crafted proposals at a conference table. And the governments of these developing economic powers will soon recognize, as America is beginning to do, their urgent need for cleaner-burning fuels and safer sources of energy.

If the efforts to negotiate an international solution that includes China and India do not succeed, we still have an obligation to act.

In my approach to global climate-control efforts, we will apply the principle of equal treatment. We will apply the same environmental standards to industries in China, India, and elsewhere that we apply to our own industries. And if industrializing countries seek an economic advantage by evading those standards, I would work with the European Union and other like-minded governments that plan to address the global warming problem to develop a cost equalization mechanism to apply to those countries that decline to enact a similar cap.

For all of its historical disregard of environmental standards, it cannot have escaped the attention of the Chinese regime that China’s skies are dangerously polluted, its beautiful rivers are dying, its grasslands vanishing, its coastlines receding, and its own glaciers melting. We know many of these signs from our own experience—from environmental lessons learned the hard way. And today, all the world knows that they are the signs of even greater trouble to come. Pressing on blindly with uncontrolled carbon emissions is in no one’s interest, especially China’s. And the rest of the world stands ready to help.

Like other environmental challenges ~~- only more so -~~ global warming presents a test of foresight, of political courage, and of the unselfish concern that one generation owes to the next. We need to think straight about the dangers ahead, and to meet the problem with all the resources of human ingenuity at our disposal. We Americans like to say that there is no problem we can’t solve, however complicated, and no obstacle we cannot overcome if we meet it together. I believe this about our country. I know this about our country. And now it is time for us to show those qualities once again.

Thank you.

Overview of EPA Investigations

Wonk Room — Thu, 08 May 2008 17:10:00 -0500

From the Wonk Room.

The scheduled Oversight and Government Reform Committee hearing today on White House interference with ozone standards has been the hearing has been postponed because EPA Administrator Stephen Johnson refused to appear:

EPA officials say Johnson had a “recurrence of ongoing back issues stemming from a car accident years ago.”

Below is the current status of a number of EPA scandals Congress is expecting Administrator Johnson to answer for:

EPA SCANDAL	CURRENT STATUS
The denial of the California waiver petition.	January 8: California and 15 other states sue to overturn denial. April 9: Waxman issues latest subpoena for documents involving White House. April 22: NHTSA issues fuel-economy standards that it claims preempts state global warming standards; states warn of lawsuit.
Failure to obey Supreme Court mandate to make a global warming pollution endangerment finding.	March 27: EPA announces it will ask for a new round of comments. April 2: Officials of 18 states sue to require the EPA to act within 60 days April 2: EPA documents are subpoenaed by House Global Warming Committee; the documents have not been turned over. April 18: Court orders EPA to file its response to the state suit by May 8.
White House interference in ozone standards.	April 16: Waxman subpoenas White House documents. May 8: Date of scheduled Oversight Committee hearing with Administrator Johnson; postponed when Johnson refuses to appear.
Mary Gade firing.	May 1: EPA Region V Administrator Mary Gade resigns, saying “There’s no question this is about Dow.” Sen. Whitehouse (D-RI) and Rep. Dingell (D-MI) announce intent to investigate. May 7: Citizens for Responsibility and Ethics in Washington file two Freedom of Information Act (FOIA) requests with the EPA regarding Gade’s resignation.
Politicization of the EPA.	April 23: Union of Concerned Scientists issues survey of 1600 staff scientists describing mass politicization and political interference. April 29: Sen. Boxer (D-CA) releases Goverment Accountability Office report detailing politicization of toxic regulation. May 7: Senate Environment and Public Works Oversight Subcommittee holds hearing into politicization of EPA.