The question of constitutionality of Lieberman-Warner arose tangentially yesterday in debate over S. 3036 when Senator John Warner (R-VA) responded to a proposal by Sen. Johnny Isakson (R-GA) to provide tax incentives for nuclear power. Warner said (Page S4913):
Mr. WARNER. Mr. President, I wish to commend our distinguished colleague from Georgia. I listened very carefully, and I appreciate his reference to the fact that I will be offering at the earliest possible time an amendment to lay some foundation in this proposed legislation addressing nuclear power.
As I listened to what the Senator from Georgia said, I basically agree. But as the Senator well knows, if we were to have included these provisions, either during the course of the committee markup or indeed now in the amendment process, we would get blue-slipped. This type of legislation, which I support, I say to the Senator, must originate–as he well knows having served–in the House of Representatives and then come to the Senate.
So as colleagues follow this and say to themselves: This Senator brings forth very constructive proposals, why didn’t the managers put that in the bill, I think you would have to agree with me we would be faced with a blue-slip problem and our bill would come to a dead halt.
Funds from the auction of allowances are considered to be federal revenues and the spending of the auction proceeds to be federal outlays. In addition, because the government would be essential to the existence of the allowances and responsible for the readily realizable monetary value of them through its enforcement of the cap on emissions, and because the market for non-HFC allowances would be relatively liquid, CBO considers the distribution of those allowances at no charge to be functionally equivalent to distributing cash. Finally, because the receipts from selling or giving allowances away would effectively be an indirect business charge that reduces the federal tax base for income and payroll taxes, in most cases, CBO adjusted a portion of the gross gain to the federal government from auctioning and giving away allowances to account for reductions in other federal revenues; we assume that tax offset totals 25 percent—an approximate marginal tax rate on overall economic activity.
Looks like a revenue bill to us. Where’s the blue slip?
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