Cap-and-trade traded away?

George Stephanopolous reported yesterday that Senate Democrats forced Barack Obama to choose between two break-the-bank policies for this year.  The White House apparently surrendered on cap-and-trade in order to get started on a massive overhaul of the nation’s health-care delivery system.  Stephanopolous refers to the dilemma as a classic “scorpion in the bottle” problem:

When the White House released its budget, I said the president’s effort to reform health care and cap carbon emissions were “scorpions in a bottle” — only one could make it through Congress this year.

This week, the White House and House Democrats made their choice: health care is the survivor.

As the Wall Street Journal and Washington Post have reported, House Democrats (backed by the White House) plan to write a budget resolution that allows health care to be passed by a simple majority (through the so-called “reconciliation” process) if a bipartisan compromise isn’t reached by September.

Cap and trade will not get the same budget protection, and there are nowhere  near 60 votes for it.  Keeping it out of the reconciliation process recognizes reality: Congress can’t pass it in the middle of a recession.

Stephanopolous notes that Democrats in the House made this choice, but it’s really all about the Senate.  Obama thinks he can get a few moderate Republicans to go along on health care reform, probably more than just the Porkulus 3, if he steers a centrist course.  Cap-and-trade has problems even among Democrats, especially in the Rust Belt and in coal-producing areas, and its impact on the economy makes it a non-starter in this session of Congress.

Even the health-care effort will get curtailed, likely as a result of the massive government spending already undertaken by Democrats this year.  Instead of moving forward with a comprehensive plan to socialize the health sector, Obama wants to work around the edges this year. Obama has apparently learned that lesson from Hillary Clinton’s abortive attempt to nationalize the health sector in 1993-4.

That may put off the rest of his reforms until 2011, though.  Obama will not want to impose a nationalized system in an election year, especially if he’s performing as badly then as he has in the last two months.  Republicans are already licking their chops for the midterms, and a major socialist initiatitve will be exactly what they need to compete for control of the House.  That probably pushes cap-and-trade to 2011, too.

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