by Richard Morrison
May 18, 2009

Democrats formally unveil a 932-page bill to restrict greenhouse gas emissions.

CEI Expert Available to Comment: Senior Fellow Marlo Lewis on how the bill has turned into corporate welfare: 

“President Obama had campaigned on a cap-and-trade plan in which 100% of the emission allowances would be auctioned…Of course, the last thing companies subject to emission caps want to do is pay $646 billion or more for the right to produce or use energy. So the U.S. Climate Action Partnership, the main corporate lobby for cap-and-trade, lobbied for a system with mostly free rationing coupons, and that’s what they got. Under the revised Waxman-Markey bill, from 2012 through 2025, the electricity sector will receive 35% of the allowances gratis and natural gas distribution companies will receive 9%, with free distributions phasing out from 2026 through 2030. In all, 85% of the rationing coupons are allocated free-of-charge to industry and other interests.” 

2. BUSINESS

General Motor Corp.’s proposed bankruptcy filing pits union retirees against GM investors.

CEI Expert Available to Comment: Special Projects Counsel Hans Bader on the unfair distribution of the company’s value: 

“If Obama gets his way, the United Auto Workers will receive at least ten times as much value ($10 billion plus 39 percent of the company) as the bondholders (who get no money and 10 percent of the company) even though the bondholders are owed more ($27 billion vs. $20 billion). This is neither legal nor fair: under the bankruptcy laws, the UAW is not supposed to get preference over the bondholders; and it is the UAW, not the bondholders, which helped bring GM to its knees through its rigid work rules and excessive wages and benefits. The Administration will seek to get around the bankruptcy laws through a sham sale of GM’s assets to a shell company owned by the Administration and the UAW.” 

3. ENVIRONMENT

Profits for organic retailer Whole Foods drop 32%.

CEI Expert Available to Comment: Director of Risk and Environmental Policy Angela Logomasini on why a flourishing economy is good for the environment: 

“It appears that organic food becomes a luxury item that must be dispensed with when times get hard. Despite the fact that organic food isn’t necessarily any healthier or better for the environment than conventional food, many people view it as environmentally superior and are willing to pay more for it—but only up to a point. There is a lesson for environmentalists to learn here. Wealth creates the will and the ability to pay for environmental amenities.” 

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