Washington (Platts)--25Mar2009

The US House Budget Committee is considered likely Wednesday to approve a
fiscal 2010 budget resolution that excludes the Obama administration's
assumption that the Treasury will begin receiving revenue from a nationwide
CO2 cap-and-trade program beginning in 2012, according to draft documents
released by the committee.

In his fiscal 2010 budget outline in February, President Barack Obama
included $646 billion in revenue over from fiscal 2012 through fiscal 2019
from the auctioning of permits to emit CO2.

The expected decision by the House panel is likely to be mirrored by the
Senate Budget Committee, which is expected to approve its fiscal 2010 budget
resolution on Thursday.

The decisions to exclude cap-and-trade revenue from the budget
resolutions do not signal how Congress is likely to vote on GHG legislation
and are designed more to blunt opposition from Senate Republicans, who have
objected to efforts to use the budget process to pass GHG limits by a simple
51-vote majority, rather than the 60-vote super majority usually needed to
pass controversial measures.

Senate Budget Committee Chairman Kent Conrad late Tuesday said he
believes including such language in the budget resolution would have limited
what jurisdictional committees could do when when they begin working on
legislation.

Conrad said a cap-and-trade measures should be left to committees of
jurisdiction. "Honestly, we don't know what they're going to do," he said.

Both chambers have, however, included provisional language that would
allow adjustments in the amount of money spent on renewable energy, advanced
vehicle technologies and energy efficiency if and when cash becomes available,
such as when a cap-and-trade law begins producing revenue.

Though Congress took a different approach to promoting cap and trade than
the White House proposed, Office of Management and the Budget Director Peter
Orzag told reporters Wednesday morning that the congressional strategy would
work, too.

"The fact that its not treated in the budget resolution the same way that
we proposed in no way means that the House and Senate can't take the
legislation up. And in fact, some may argue that the political economy of
getting climate change done this year may actually be better outside of the
budget resolution than inside of it," he said.

--Jean Chemnick, jean_chemnick@platts.com