Democrats Tangle on Climate Change

By IAN TALLEY and STEPHEN POWER

WASHINGTON -- Democratic congressional leaders are encountering opposition from key Senate Democrats to the president's plan to put a price on carbon this year, and are considering bypassing normal Senate procedures to push through legislation.
President Barack Obama's 2010 budget plan calls for using a carbon cap-and-trade system to raise as much as $646 billion in new revenue for the government between 2012 and 2020.
The system would set limits on how much carbon dioxide and other greenhouse gases industries could emit, and sell rights to emit those gases that could be traded among companies. Most of the money raised would go toward a refundable tax credit of up to $400 for working individuals and $800 for working families, subject to income limits. The rest would go to subsidize clean technology research, under the president's proposal.
Under normal rules, backers of the cap-and-trade bill would need 60 Senate votes to cut off debate and move to final action. As of now, it's not clear Democratic leaders have those votes.
In a harbinger of the trouble Democrats face over environmental legislation, the House on Wednesday voted down a proposal to set aside more than two million acres in nine states as protected wilderness. A majority of House members supported the bill, but it fell short of the needed two-thirds majority.
On the much broader climate issue, several Democratic senators from Rust Belt and coal-producing states have warned that they may not support legislation that lacks sufficient protections for their home-state manufacturing and mining interests.
On Wednesday, the chairman of the Senate Budget Committee, Kent Conrad (D., N.D.), said it is "unlikely" climate legislation will pass the Senate "if it doesn't have money set aside for industries that will be especially hard hit."
The sparring over climate change underscores the choices facing Democratic leaders, who could try to push through a cap-and-trade bill using "reconciliation" rules that shield certain budget measures from filibusters. In an interview, White House Office of Management and Budget Director Peter Orszag said the administration is considering trying to pass climate legislation using such rules, which require 51 votes rather than a filibuster-proof 60.
A spokesman for Senate Majority Leader Harry Reid, Jim Manley, said that Mr. Reid is weeks away from making a decision about how to proceed on cap-and-trade legislation.
In 2001, Republicans used the budget reconciliation process to push through tax cuts called for by then-President George W. Bush, and many Democrats accused Mr. Bush of bypassing the democratic process.
The debate over climate is not taking place in a vacuum. The decision on climate change will be balanced against other Democratic priorities, including whether the partisan fighting likely to be spurred by the move would poison cooperation on other initiatives. In the run-up to action on the 2010 budget, Democrats are also debating whether to seek filibuster-proof protections for Mr. Obama's health-care plan, as well as a proposal to change the way the government finances student loans.
Sen. Max Baucus, a Democrat from coal-state Montana and the chairman of the Finance Committee, said "it's not a good idea" to use reconciliation to pass cap-and-trade, and the partisan nature of such a strategy would cause the administration trouble. "It's possible 51 votes could be found, but at what cost?" he said.
Republicans were more blunt. "It's a horrible idea, [and] would be seen as a vast power grab and would be wildly unpopular," said Sen. John Cornyn (R., Texas).—Greg Hitt and Martin Vaughan contributed to this article.
Write to Ian Talley at ian.talley@dowjones.com and Stephen Power at stephen.power@wsj.com