The Obama Administration’s Regulatory Opportunity

Columnist Timothy Carney warns that the massive bail-outs now flowing out of Washington will give the incoming Obama administration an opportunity to impose a regulatory agenda that otherwise would be impossible to promote.  It’s not so much that the government will be doing anything different than it has been doing under both Republicans and Democrats.  Rather, Washington will be doing a lot more of it.  Writes Carney:

“You never want a serious crisis to go to waste,” incoming White House chief of staff Rahm Emanuel recently said. “And what I mean by that is an opportunity to do things you think you could not do before.”

What “things” do Emanuel and the Obama administration want to do, and what “opportunities” have been presented them by the current economic crisis? In short, the armada of bailouts deployed by the outgoing Bush administration will soon become the weapons the Democrats need to push greenhouse gas regulations that they haven’t been able to get in through the front door.

Put another way, with the federal government now paying (with your money) the Detroit piper, Obama and congressional leaders get to call the tune. This provides a chance for a regulatory agenda that would never fly otherwise.

General Motors, Ford, and Chrysler all have come begging at the federal trough for a series of bailouts. In recent weeks, Democrats have made it clear what they will demand in exchange for the bailout cash: more attention to fuel-efficient cars, fewer gas guzzlers, more research into alternative-fuel-powered cars, and other green efforts.

It’s also obvious what the Democratic Congress won’t demand of Detroit—they won’t call on the Big Three to significantly renegotiate the absurdly generous pension plans the unions demanded and irresponsible past CEOs agreed to.

Democrats in Washington have long fought to protect the unions and have been champing at the bit for greenhouse gas restrictions. The bailouts provide new leverage on both of these scores.

Specifically, the Obama administration and Congress can new regulate greenhouse gas emissions and fuel efficiency through a back door. While there is broad public support for action on climate change, that support is shallow. People aren’t willing to have their energy prices hiked in order to reduce their carbon footprint.