March 19, 2009 at 10:32 am

Senators may block Obama on emissions

Levin )

WASHINGTON -- Michigan's senators, reliable allies of President Barack Obama, are emerging as potential obstacles to one of his top budget priorities.

Both have raised major questions about a cap-and-trade system to limit carbon emissions. Last week, Sen. Carl Levin, D-Detroit, joined a handful of more moderate Senate Democrats in opposing a procedural move that could make it easier for such a system to become law.

And Sen. Debbie Stabenow of Lansing criticized the administration for tying new money for energy research -- some of which could help the auto industry -- to passage of a cap-and-trade plan.

The issue once again puts Michigan lawmakers who are generally friendly toward the party's priorities closer to the party's moderates, and even Republicans, on a debate affecting Michigan and the auto industry.

Obama's budget proposal includes a plan to reduce carbon emissions, which some link to global climate change. Though the administration has not laid out many details, such a plan would place a national limit on emissions. Industries that produce carbon -- including auto firms, power plants and factories -- would have to pay for emissions permits, which could be traded among companies.

"I believe we've gotta move" on carbon limits, Levin said Wednesday. "I'm going to find something I'm going to vote for, that I think is fair, because we have to act."

But Levin said he worries that such a plan could unfairly penalize manufacturing -- which can emit lots of carbon -- and states such as Michigan that depend heavily on coal-fired power plants, another big carbon source.

He was one of seven Democrats and 26 Republicans to sign a letter last week objecting to the use of the budget reconciliation process, which would limit chances for debate and amendments, to debate cap-and-trade legislation.

Stabenow's objection: Obama's pledge for a 10-year, $150 billion effort to boost alternative energy technology, including auto research, will only happen with a cap-and-trade plan that would include a government auction of all the available emissions permits. Last week, she quizzed Energy Secretary Steven Chu and Treasury Secretary Tim Geithner on the plan.

A 100 percent auction is "unlikely, actually, to happen, and certainly will not happen until down the road," Stabenow told Chu at a Senate Budget Committee hearing. "Right now we need financing" for energy research.