It didn’t generate too much attention, but last week, the “Gang of 10” — a group of five Democratic senators and five Republican senators — unveiled a compromise energy bill called the “New Energy Reform Act.” It has quite a few elements, but Nate Silver summarized the highlights:
* Opens additional drilling areas in the Gulf of Mexico, and allows Virginia, North Carolina, South Carolina and Georgia to elect to permit drilling off their coasts. Existing bans on drilling off the West Coast, including in the ANWR, would be preserved.
* Dedicates $20 billion to R&D on alternative fuels for motor vehicles.
* Extends a series of tax credits and incentives, such as for the purchase of hybrid vehicles.
* Funds the above — at total cost of about $84 billion — by closing tax loopholes for petroleum companies, in conjunction with licensing fees.
When Barack Obama expressed support for the legislation, the McCain campaign immediately branded him a “flip-flopper” for endorsing a compromise bill that includes expanded drilling.
But by any reasonable measure, the Gang of 10 has inadvertently left McCain in a very awkward position, for which there is no easy escape.
Sam Stein described the dynamic nicely yesterday, calling this an “energy trap” for McCain: “McCain is stuck in a conundrum: express support for the Gang of Ten and incur the wrath of anti-tax crusaders or continue rolling the dice against public opinion and risk being painted as a stooge of the oil lobby. His $1.3 million in oil and gas donations in June only furthers the frame.”
Quite right. McCain has said he wants lawmakers to reach some kind of bipartisan compromise, reach a consensus, and pursue a variety of energy policy options. The Gang of 10’s bill, while clearly imperfect, does just that. And yet, McCain opposes the measure, because it’s fiscally responsible and gets additional funding from Big Oil.
The more this bipartisan compromise gains attention, the worse it’s going to be for McCain.
“McCain has backed himself into a box on this,” one high-ranking Hill aide told Stein. “In the end he might have to do exactly what Obama has done: join the compromise while saying he objects sternly to the taxes. But even then he risks getting killed by his conservative base.”
Silver went so far as to call this “Obama’s checkmate,” and listed a series of benefits for the presumptive Democratic nominee. Among the many:
* Would take the drilling issue off the table. Offshore drilling polls well, favored by roughly 2:1 margins. But more than that, it gives the Republicans a rhetorically effective detour by which they can bypass most of the debate on energy policy, and much of the debate on the economy in general. The passage of a bill — particularly one that had Obama’s support — would mitigate the issue and force the Republicans to argue the economy from much weaker ground, such as the Democrat-friendly territory of social security, health care, and middle class tax cuts.
* Would make Obama look bipartisan. The Republicans supporting the bill aren’t your usual cast of Gordon Smiths and Susan Collinses. Instead, they are center-right types: Saxby Chambliss, John Thune, Lindsey Graham, Bob Corker, and Johnny Isakson. Obama’s claims to bipartisanship would be very credible.
* Would make McCain look obstructionist. The converse of this is also true, substantially undermining McCain’s claims to be a moderate/maverick.
* Would highlight McCain’s loyalty to Big Oil. Even worse for McCain is his reason for opposing the bill — his refusal to remove oil company tax loopholes. In this populist climate, and particularly in the wake of Exxon’s record-setting profits, that is a potentially lethal position to hold.
Keep an eye on this; it may end up mattering quite a bit.