With the midterm elections fast-approaching, Democrats are left with a limited window to pass initiatives such as President Obama’s recently announced infrastructure bank proposal, the highly contested oil spill liability package, and the Federal Renewable Energy Standard. Bracing for a significant Republican pick-up in November, moderate Democrats are inclined to shy away from these tough votes, while a resurgent GOP has indirectly indicated it will be less than cooperative; reticent to give the Democrats a victory in advance of November. Today’s GR Insight takes a look at legislative landscape approaching the midterms.

The Obama Administration and the Democrats are going into the mid-term elections with a limited window – no more than six weeks, at maximum – to complete work on energy, oil spill liability, and a new round of economic stimulus measures, the latter of which were proposed by President Obama just this week.  With voters seemingly prepared to hand over control of the House and possibly the Senate to Republicans, success is as much a matter of political survival for Democrats as it is a matter of creating more jobs and transforming the US energy system.  The political dynamics that have made passing legislation so difficult in the past year, however, still exist, making passage of any legislation a remote possibility.  Meanwhile, the Administration and the oil industry continue to battle over the offshore drilling moratorium, a fight which has intensified following the oil platform explosion last week.  In this Energy and Climate Brief, Garten Rothkopf previews what are likely to be the most acrimonious legislative debates this Fall, including the possibility of a second stimulus, the oil spill liability package, and the fate of the Renewable Energy Standard, in order to gauge the likelihood of any of these measures passing this year.

A Second Stimulus?

Last week, the Obama Administration began floating a proposal for a new round of job creation initiatives.  Although the economic stimulus package, which passed in February 2009, has had some positive impact on economic growth and hiring (See GR's Analysis on 'Reassessing the Green Stimulus'), it has been overwhelmed by the depth of the economic downturn, including weak private investment and the contraction of state and local government budgets.  The latest unemployment figures, which show the unemployment rate having declined only a tenth of a percentage point from the same time a year ago, are evidence of this. With the poor economic situation likely to translate into heavy Democratic losses this November, the Obama Administration is now looking at a new stimulus package.  The proposal includes new infrastructure spending, but it will be weighted, in terms of dollar amounts, toward tax cuts, which is partially meant to help the plan bypass a Republican filibuster in the Senate.  

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