There’s an interesting exchange on the climate change bill going on over at Capital Gains and Games.  Budget wonk Stan Collander was impressed that “…the White House once again has demonstrated an excellent ability to get Congress to go along with the things it wants.”  Dartmouth economist and former Bush CEA member Andrew Samwick, however, argues that this is backwards.  He thinks the legislative branch should take the lead on developing legislation and the executive branch should take a subordinate role.

Andrew also complained that the legislation would give away most of the permits to industry and that almost all Republicans had sat out the debate.  I agree with him on those points, but not on the leadership point.  I don't see how Congress leads on complex policy issues.  It can (and should) take charge of things like investigations, but only the executive branch has the analytical capability to fully develop policies and only the president has the political capital to advance them.  Congress is designed to advance regional and factional interests.  Those should be part of the policy debate, but I don't see how a coherent policy on something like climate change can get very far if Congress takes the lead. 

In fact, my concern is the opposite of Andrew’s.  I think the President should be standing firmer on fundamental policy issues—such as allocation of permits.  The bill that came out of the House seems almost designed to fail in practice.  The subsidies for consumers are way too small.  (Samwick suggests that a payroll tax offset would make more sense, and I agree.  Obama proposed a version of that, but capitulated to Congress’s giveaways to industry.)  The permit allocation seems designed to reduce emissions in the most costly way possible.  And the capitulation to agriculture was obscene.   (Agriculture is exempt from any emission restrictions and USDA, not EPA, gets to decide about offsets—activities that reduce carbon emissions.  Given that USDA’s mission is to advance the interest of farmers, not the environment, this can’t work out well.)

The House did get the president to go along with its wishes (at least a version of them) and it wasn't pretty.  I dread what might emerge from the Senate.