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Obama=E2=80=99s hidden bailout of General Electric

By: Timothy=20 P. Carney
Examiner Columnist
03/03/09 8:12 = PM=20

While many companies hire lobbyists to win earmarks, General = Electric=E2=80=99s=20 unmatched lobbying force has secured a tax increase =E2=80=94 or its = equivalent =E2=80=94 in=20 President Barack Obama=E2=80=99s budget.

Labeled =E2=80=9Cclimate revenues=E2=80=9D and totaling $646 billion = over eight years, this=20 line item in Obama=E2=80=99s budget has inspired confidence in GE Chief = Executive=20 Officer Jeff Immelt. As Immelt put it in a letter this week, he believes = that=20 the Obama administration will be a profitable = =E2=80=9Cfinancier=E2=80=9D and =E2=80=9Ckey partner.=E2=80=9D

On page 115 of Obama=E2=80=99s fiscal 2010 budget is Table S-2, = titled =E2=80=9CEffect of=20 Budget Proposals on Projected Deficits.=E2=80=9D The chart forecasts the = costs of=20 Obama=E2=80=99s spending proposals and the added revenue of his proposed = tax increases.=20 It also forecasts, beginning in 2012, billions of dollars a year in = =E2=80=9Cclimate=20 revenues.=E2=80=9D This budget line, which has struck fear into some = lawmakers from=20 coal-dependent states, could spell salvation for GE in these times of=20 uncertainty.

How can Obama generate =E2=80=9Cclimate revenues=E2=80=9D? By forcing = companies to pay for=20 the right to emit greenhouse gases such as carbon dioxide.

A tax on greenhouse gas emissions could accomplish this, but = Obama=E2=80=99s=20 preferred policy =E2=80=94 and the approach embraced by a few = congressional bills in=20 recent years =E2=80=94 is called =E2=80=9Ccap and trade.=E2=80=9D In = short, cap and trade requires=20 businesses to spend =E2=80=9Ccredits=E2=80=9D to pay for their = emissions. Businesses can buy or=20 sell these credits, and the market =E2=80=94 not the government = =E2=80=94 would directly set the=20 price of a credit. Government would initially auction them off, = generating=20 revenue.

GE =E2=80=94 a member of the U.S. Climate Action Partnership, which = advocates cap and=20 trade =E2=80=94 leads the push for greenhouse gas restrictions.

In the fourth quarter of 2008 as the company=E2=80=99s stock fell 30 = percent, GE=20 spent $4.26 million on lobbying =E2=80=94 that=E2=80=99s $46,304 each = day, including weekends,=20 Thanksgiving and Christmas. In 2008, the company spent a grand total of = $18.66=20 million on lobbying.

Reviewing their lobbying filings, you might think you were looking at = Al=20 Gore=E2=80=99s agenda. GE=E2=80=99s specific lobbying issues included = the =E2=80=9CClimate Stewardship=20 Act,=E2=80=9D =E2=80=9CElectric Utility Cap and Trade Act,=E2=80=9D = =E2=80=9CGlobal Warming Reduction Act,=E2=80=9D=20 =E2=80=9CFederal Government Greenhouse Gas Registry Act,=E2=80=9D = =E2=80=9CLow Carbon Economy Act,=E2=80=9D and=20 =E2=80=9CLieberman-Warner Climate Security Act.=E2=80=9D

This isn=E2=80=99t altruism or public relations. GE has started a = joint venture=20 called Greenhouse Gas Services, which invests in =E2=80=94 and hopes to = manage the trade=20 in =E2=80=94 greenhouse gas credits. But these investments and this = trading floor are of=20 basically no use and nearly no value without government restrictions on=20 greenhouse gases.

Hence the lobbying, buttressed by generous campaign contributions: = Employees=20 and executives gave $1.35 million to politicians in the past election = while GE=E2=80=99s=20 political action committee shelled out $1.55 million. About 64 percent = of this=20 $2.9 million went to Democrats, with Obama easily the top recipient of = GE=20 money.

Obama=E2=80=99s budget includes the payoff, promising to start a = multibillion-dollar=20 greenhouse gas industry by 2012. In a letter this week, GE=E2=80=99S = Immelt told=20 shareholders that current events present an =E2=80=9Copportunity of a = lifetime,=E2=80=9D because=20 =E2=80=9Ccapitalism will be =E2=80=98reset.=E2=80=99 =E2=80=9D

Immelt wrote: =E2=80=9CThe interaction between government and = business will change=20 forever. In a reset economy, the government will be a regulator; and = also an=20 industry policy champion, a financier, and a key partner.=E2=80=9D

In short, GE plans to get rich by being one of the = government=E2=80=99s closest=20 partners =E2=80=94 which it has always been, thanks to its unmatched = lobbying=20 efforts.

The environmentalist at this point might respond, =E2=80=9CWell, good = for GE. if they=20 can get rich while helping the planet, more power to them.=E2=80=9D But = this ignores=20 important issues. First, restraining greenhouse gas emissions will cost=20 Americans dearly. Gas, electricity and heating prices will all go up. = The prices=20 of manufactured and shipped goods will go up. A Clemson University = report on=20 similar cap-and-trade proposals forecast a 1 percent decline in he U.S. = gross=20 domestic product by 2015 if they were implemented.

There are environmental costs, also, to such a focus on greenhouse = gases:=20 Ethanol=E2=80=99s damage to water supplies, soil health and air quality = are the fruit of=20 government pushing the product as a climate-friendly fuel.

When the lobbying fingerprints of GE and other well-connected firms = are=20 considered, it=E2=80=99s not hard to conclude that the policy that will = finally emerge=20 won=E2=80=99t be the one that is best for the planet and least bad for = the economy, but=20 the one that is best for General = Electric

more from Timothy P. Carney

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The=20 business of Detroit is producing lobbyists=20
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Former=20 NRCC Chairman Reynolds Cashes Out to K Street

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=E2=80=94Timothy P. = Carney

<= IMG=20 title=3D"" height=3D154 alt=3D""=20 src=3D"http://media.washingtonexaminer.com/images/yaynay41.png" = width=3D300=20 border=3D0>

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Did=20 DeMint's endorsement of Toomey set off Specter?=20
Why=20 the insurers will win in Obama=E2=80=99s health reform=20
Specter=E2=80=99s=20 party switch is all about winning=20
Specter's=20 switch: He's done it before

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Obama=E2=80=99s hidden bailout of General Electric

By: Timothy=20 P. Carney
Examiner Columnist
03/03/09 8:12 = PM=20

more from Timothy P. Carney

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Sports

Jets=20 trade with Detroit, select Iowa RB Shonn Greene to start 2nd round of = NFL=20 draft

Economy

Offic= ials says=20 Obama to lift US restrictions on family travel and remittances to = Cuba

Entertainment

NBC's=20 'Celebrity Apprentice' picked up for another round in Spring = 2010

Obama=E2=80=99s hidden bailout of General Electric

By: Timothy=20 P. CarneyExaminer Columnist03/03/09 8:12 = PM=20

more from Timothy P. Carney

Reader Comments

Post a comment

Sports

Jets=20 trade with Detroit, select Iowa RB Shonn Greene to start 2nd round of = NFL=20 draft

Economy

Offic= ials says=20 Obama to lift US restrictions on family travel and remittances to = Cuba

Entertainment

NBC's=20 'Celebrity Apprentice' picked up for another round in Spring = 2010

By: Timothy=20 P. Carney
Examiner Columnist
03/03/09 8:12 = PM=20