Zombielanche

Ryan Lizza has a must-read article about Obama’s second term in The New Yorker. Here’s the climate change bit:

Obama talks about energy in most of his speeches, but, in contrast with 2009, when the centerpiece of his program was a cap-and-trade approach to reducing carbon emissions, his goal today is unclear. Early discussions on Capitol Hill suggest that, in a wide-ranging deal, a carbon tax might be part of a grand bargain to settle Taxmageddon. The proposition is not as absurd as it sounds. In 1997, the budget deal struck by Clinton and the Republicans was not so much a meeting in the middle as a swap of major priorities. “That was a deal of trades,” one former Clinton official said. Clinton won policies such as a new children’s-health program, a higher-education tax cut, and some progressive changes to the welfare bill that he signed into law in 1996. “We won those things and then we just gave the Republicans big Medicare savings, and we let them cut the capital-gains tax for rich people.”

A grand bargain, with climate change as a solution to Taxmageddon? And…what’s Taxmageddon?

Election Day is November 6th. Fifty-five days later, on New Year’s Eve, the size and the scope of the federal government are scheduled to be radically altered. Federal tax rates for every income group will shoot up to levels not seen since 2001. Payroll taxes for employees will jump by two percentage points. Unemployment benefits for some three million Americans will be cut off. The Pentagon will start the new year with a fifty-five-billion-dollar budget cut. The budget allocated to everything from the F.B.I. to the Park Service to meat inspections will be slashed by the same amount. Soon after, federal payments to doctors who treat patients using Medicare, the federal health program for the elderly, will be slashed by about a third.

The huge increase in taxes and the precipitate drop in government spending would equal an economic contraction of more than five hundred billion dollars, more than three per cent of G.D.P. The impact could send a fragile economy back into a recession. “It’s two to three times bigger in negative terms than even the biggest year of the stimulus was in positive terms,” Austan Goolsbee, Obama’s former chairman of the Council of Economic Advisers, said. It is this frightening confluence of fiscal time bombs, starting on December 31, 2012, that has earned the name Taxmageddon.

It’s good to hear climate change is part of the biggest domestic policy discussions going–where it should be. It is a large bargaining chip; we shall see how it is played and if Congressional Zombies can be defeated.