Hurting the Heartland?
Obama's proposed coal and tobacco taxes would disproportionately impact some key states—ones that the Democrats will need in 2012.
A coal war is about to break out in America—a regional conflict that will pit the coasts of the country against the Appalachian and Midwest heartland, where cheap power from coal is considered a birthright and a crucial economic necessity.
This conflict has been rising for a long time. Its John Brown is, of course, Al Gore, who has convinced most of the Democratic leadership (and most of America) that rising carbon dioxide levels are immoral and will leave the planet a hot, heaving mess.
Following the lead of Hill Democrats and some moderate Republicans, President Obama wants to "cap" the total amount of CO2 that American power plants emit across the country in any given year, and then require companies to purchase "pollution credits" if they want to send any of the chemical into the atmosphere.
The good news, from Obama's point of view, is that the cost of the credits should encourage companies to speed up work on alternative technologies. In the meantime, administration officials are predicting that sales of the credits will generate more than $600 billion in federal revenue over the next 10 years—money that Obama plans to use not only for energy research but also to give tax credits to the working poor and to support other programs.
But the new tax burden—and it does amount to a new tax—will be borne primarily in two regions of the country. The reason is simple enough: most energy-generated CO2 comes from coal-fired power plants, and most of them, and the "dirtiest" of them, are in a region that stretches along the length of the Ohio River, from St. Louis east to Pittsburgh, and in states on both side of the river.
The administration says that it will try to mitigate the hit to customers in those places and states by engineering tax-based rebates. But the rebate idea doesn't mollify politicians—many of them Democrats—in states such as Ohio, Pennsylvania, Indiana and Kentucky—who worry that the cost of the permits will raise energy costs for individuals and manufacturers already hard-hit by recession and job losses in power-hungry industries.
One concerned Democrat is Sen. Evan Bayh of Indiana, who sits on the Energy and Natural Resources Committee. Virtually all of his state's power is coal-generated, and he has voiced concerns about the Obama proposal. But Bayh won't get to ask questions in committee, because the "cap and trade" plan was taken from his jurisdiction and instead given to Sen. Barbara Boxer of California, a strong proponent of the idea. Sen. Harry Reid of Nevada, the Democratic leader and a strong supporter of the plan, ordered the change in committee jurisdiction.
Even though he won states such as Indiana and Ohio, Obama has yet to convincingly play to the heartland and Appalachian interior. Last fall, he infamously suggested that people in such places "cling" to their guns and their religion in troubled times. But they cling to coal power (and coal mining), too.
These places are caught in the riptide of change. They need a more rational health-care system and a cleaner environment. Yet they are disproportionately exposed to higher taxes because they rely on the (unhealthy) commodities Obama wants to tax.
Tobacco is another example. To expand health care for children under the State Children's Health Insurance Program (SCHIP, and pronounced S-chip), Obama proposed, and the Congress agreed, to raise taxes on tobacco by $30 billion. And yes, smoking rates are higher along the Ohio River and nearby states.
A state such as Kentucky gets hit from every direction: CO2 pollution credits, higher cigarette taxes in a state of heavy smokers and further loss of demand for tobacco—still an important local crop.
I know that Obama is essentially a big-city guy from various coasts: West, East and North (Lake Michigan). I know he is an urban guy: Stevie Wonder not Taylor Swift; NBA not NASCAR. But as he hurdles from one big proposal to another, he needs to remember the heartland voters who helped make his victory exceptional.
At this point, we're all "clinging" to something.
Like The Daily Beast on Facebook and follow us on Twitter for updates all day long.
Howard Fineman is Newsweek's Senior Washington Correspondent and Columnist, senior editor and deputy Washington bureau chief. He is the author of "Living Politics," a column that began on MSNBC.COM and Newsweek.com and that now also appears in the print magazine. An award-winning reporter and writer, Fineman also is an analyst for NBC News and MSNBC, appearing regularly on "Countdown with Keith Olbermann," "Hardball with Chris Matthews" and "TODAY." The author of scores of Newsweek cover stories, Fineman's work has appeared as well in The New York Times, The Washington Post and The New Republic. His 2008 national best-selling book, "The Thirteen American Arguments," was released in paperback by Random House in the spring of 2009.
One of the nation's leading political reporters, Fineman has interviewed every major presidential candidate from (then-vice president) George H.W. Bush in 1985 to (then senator) Barack Obama early and often in the 2008 campaign cycle. His current work focuses on the Obama Administration and its top officials, as well as on Congress and politics throughout the country. Although based in Washington, Fineman travels widely in the U.S. and has covered politics and other events in 49 of the 50 states.
Fineman's work has produced many milestones and awards. A cover story in November 2001 featured President George W. Bush's first extensive interview after 9/11. Another cover, "Bush and God," was part of a series of articles that won the 2003 National Magazine Award for General Excellence. His reporting has helped Newsweek win many honors from the Magazine Publishers Association and the American Journalism Review. Other awards include a "Page One" from the Headliners Club of New York, a "Silver Gavel" from the American Bar Association and a "Deadline Club" from the Society of Professional Journalists (SPJ). In 2006 he received the Alumni Award from Columbia University's Graduate School of Journalism.
As a reporter and writer, Fineman ranges widely. Besides campaign-year covers, other projects have included: race and politics, the impact of digital technology on society, the influence of Hollywood on politics, the rise of the religious right and of conservative talk radio. He has interviewed business leaders such as George Soros, Bill Gates, Steve Case and Robert Rubin and entertainment figures such as Warren Beatty, Jane Fonda and Jay Leno.
Although now under exclusive television contract to NBC, Fineman over the years has appeared on major public affairs shows, such as Nightline, Face the Nation, Fox News Sunday, Larry King Live, Charlie Rose and the NewsHour. He was a regular panelist on Washington Week in Review on PBS (1983-95) and on CNN's Capital Gang Sunday (1995-98). He worked with Ted Koppel on Nightline specials, and has been a guest on Comedy Central's "The Daily Show with Jon Stewart" and "The Colbert Report."
A native of Pittsburgh, Fineman began his career at The Courier-Journal in Louisville, covering the environment, the coal industry and state politics before joining the newspaper's Washington bureau in 1978. He moved to Newsweek in 1980, was named chief political correspondent in 1984, deputy Washington bureau chief in 1993, senior editor in 1995 and senior Washington correspondent and columnist in 2008.
Fineman holds an A.B., Phi Beta Kappa, from Colgate, an M.S. in journalism from Columbia and a J.D. from the Brandeis School of Law at the University of Louisville. His legal education included a year as a visiting student at the Georgetown University Law Center. He received Watson and Pultizer Traveling Fellowships for study in Europe, Russia and the Middle East, and has traveled to more than 40 countries, among them China, Vietnam, Japan, Ukraine, Israel, Turkey and the West Bank Palestinian Territories.
Fineman is married to Amy L. Nathan, a senior counsel at the Federal Communications Commission. They live in Washington with their two children, Meredith and Nicholas.
For inquiries, please contact The Daily Beast at editorial@thedailybeast.com.
Comments