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Is Energy Bill the Next SCHIP?

The White House and Congress are on course for yet another bruising veto fight — this time on energy legislation that at one point was viewed as an issue ripe for a bipartisan deal.

The Bush administration issued a pre-emptive veto threat on energy legislation late Monday, attaching a long list of demands that Democrats rejected out of hand.

Among the demands was a warning against raising taxes — effectively forbidding Democratic efforts to roll back billions in tax breaks for oil companies — and opposition to requiring power companies to increase the use of renewable electricity.

Rep. Ed Markey (D-Mass.), chairman of the Energy Independence and Global Warming Committee, ripped the letter, noting that oil reached a record high of $88 a barrel on the same day, up from $26 a barrel six years ago.

“This is not a time for the president to say we need to do more for the oil industry,” Markey said. “The president will veto any energy legislation that does anything.”

Rep. Rahm Emanuel (D-Ill.) noted that at the same time Bush is vetoing spending on children’s health insurance and threatening other vetoes on spending, he is pledging to veto anything that doesn’t “coddle and protect Big Oil.”

Emanuel said Democrats would not weaken the bill to meet Bush’s demands.

And Democrats predicted that Republicans will rue standing with Bush against a major energy package.

“I think it becomes a problem for the Republicans if they are against children’s health care and against legislation that makes us less dependent on foreign oil,” Rep. Henry Waxman (D-Calif.) said. “That doesn’t sound like the best positions heading into an election year.”

“This is another example where the administration is totally out of touch,” said Rep. Chris Van Hollen (Md.), chairman of the Democratic Congressional Campaign Committee. “They’ve been looking out for oil and gas companies for six years at the expense of consumers.”

Van Hollen said Democrats would make an effort to get a big bipartisan vote but would not hesitate to use the obstructionist label against the GOP. “I think in the end if the Republicans block it, they will be held accountable in a serious way in next year’s elections,” he said.

But Republicans dismissed the Democratic rhetoric, charging that the bill the Democrats are crafting includes precious little in the way of new domestically produced supply and would heap expensive regulations on industry that would be passed on to consumers.

Rep. Joe Barton (R-Texas), ranking member of the Energy and Commerce Committee, said he and other Republicans have been shut out of negotiations on a compromise energy bill and predicted that Bush would veto a bill that did not include their input.

Barton said Democrats need to drop plans to expand Davis-Bacon labor regulations and should adopt a smaller increase to Corporate Average Fuel Economy standards than the Senate passed, among other changes.

Barton said he interpreted the administration letter as less a veto threat than an invitation to craft a bipartisan bill.

“If you really want to pass a bill, here’s what we can work together on,” Barton said. “I don’t know why the House Democratic leadership is really so afraid of being bipartisan with people like me, Rep. [Jim] McCrery [R-La.] and [Rep. John] Mica [R-Fla.],” Barton said. “The worst thing that would happen is talks break down.”

Barton predicted that Republicans would easily uphold any vetoes in the House, and Republicans dismissed charges that they would face voter wrath for blocking an energy bill.

“The fact that this is still referred to as an energy bill is somewhat comical in itself,” said Brian Kennedy, spokesman for House Minority Leader John Boehner (R-Ohio). “The Democrat staffers have been telling us that if you look very closely between the new taxes and the extra regulations you can, in fact, find energy in this bill, but my eyes aren’t that good. … As for the Dem predictions about political suffering: Yawn. They’ve been saying that all year long on everything from Iraq to AMT repeal and SCHIP and falling flat on their faces.”

Democrats, meanwhile, still have a number of controversial issues to work out among themselves, including how high a bar to set for CAFE vehicle miles per gallon requirements.

Energy and Commerce Chairman John Dingell (D-Mich.) continues to push for more gradual increases in CAFE requirements than House Democratic leaders and the Senate supports, although he said Tuesday he is working with the leadership to help craft the bill.

“I am committed to working with the Speaker and our leadership within this process to achieve a positive resolution on all issues,” Dingell said. “I intend to address the remaining questions on energy policy after the completion of this bill.”

Dingell prefers having a full-blown conference committee but has agreed to work with Speaker Nancy Pelosi (D-Calif.), and work has already begun on some of the less controversial items.

“I expect we’ll all be together when we get to the package,” Waxman said.

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