The House and Senate return this week for a week that might not produce much in the way of legislation, but could have reverberations on climate policy for the next few years.  The focus of this week will be attempts in both chambers to swiftly pass a $25 billion bridge loan for the auto industry.  With GM on the brink on insolvency, and Ford and Chrysler not too far behind, Financial Services Chairman Barney Frank and Senator Carl Levin will offer legislation that will allow for $25 billion to be taken from the $700 billion Wall Street bailout for the use of the auto industry.  The Administration, while supportive of emergency loans to the auto industry, opposes using the $700 billion fund as a kitty for non-financial companies.

On Wednesday, the Big Three and the UAW go before Chairman Frank’s committee to make their case.  Chairman Frank, and the Democratic leadership, have been generally supportive of the autos’ request.  Opposition is coming from Senate Republicans such as Sen. Richard Shelby, ranking member of the Senate Banking Committee, and it is unlikely that the bill could survive a Republican filibuster.  President-elect Obama has offered his qualified support for the emergency loans and if they fail this week, it is likely that they could be enacted (possibly by executive order) when the new Administration takes office.  These loans will by no means be unconditional.  They will likely ask the auto companies for increased government scrutiny of their operations, including demonstrating that the companies have a plan to transform themselves into profitable and technologically innovative companies.  That means greater government support for fuel efficiency and weaning away from the fleet mixes that have proven unpopular in an age of higher gas prices.

The bigger story for climate this week will be the election of a chairman for the Energy and Commerce Committee.  The Commerce Committee in the House will be where a comprehensive climate bill will start, and California Rep. Henry Waxman is challenging Michigan Rep. John D. Dingell for the gavel.  Many have portrayed this tussle as an extension of the environmentalist vs. auto makers fight that has been going on for a generation, but it is just as much a product of House of Representatives intrigue and regional tensions between the Midwest and California on the direction of policy.  If Congressman Waxman is successful, their will be two Californians (Sen. Barbara Boxer is the other) who will largely control the direction of an American cap-and-trade bill.  That could pose a problem in creating the coalitions of businesses, utilities and labor needed for swift passage of the law.  In the end, the law might be more prescriptive, but its enactment will be uglier, especially during a recession.

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