(Examiner, The (Washington, DC) Via Acquire Media NewsEdge) ENERGY
Court blocks Nebraska route for Keystone XL
A Nebraska court blocked construction of the Keystone XL oil sands pipeline through its state, ruling as unconstitutional the Nebraska law that approved a new route pushed by builder TransCanada Corp.
The Lancaster County District Court decision presents a new obstacle for the proposed Canada-to-Texas project because it effectively halts, for now, the federal review process at the State Department.
"Under the court's ruling, TransCanada has no approved route in Nebraska. TransCanada is not authorized to condemn the property against Nebraska landowners. The pipeline project is at a standstill in this state," said Dave Domina, the attorney who represented the three Nebraska landowners who filed the lawsuit against Republican Gov. Dave Heineman. Domina is a Democratic Senate candidate for the state's open seat.
TransCanada now must secure approval for the pipeline route from the state's utility regulators, a step the 2012 Nebraska law had sought to circumvent.
Judge Stephanie Stacy said Heineman's move to approve the revised pipeline plan, as the law allowed, was unconstitutional because it wrested control of pipeline decisions from the Nebraska Public Service Commission. As such, Stacy ruled the law null and void.
Backers of the Nebraska Legislature's move to give Heineman authority over the pipeline say it was meant to alleviate a regulatory logjam.
TransCanada had changed the route to skirt more of the sensitive Sandhills region and the Ogallala Aquifer, which supplies drinking water to the region, following concerns from environmental groups and President Obama about the effects of a potential spill of the thick, carbon-rich oil sands.
The State Department said in a final environmental report earlier this month that the project posed no significant environmental risk.
The project now is undergoing an interagency review to determine whether it is in the national interest. That ruling could come by June.
Obama defended the review process, while allowing that it might seem "laborious" to Canada, which has urged the U.S. to quickly approve the project.
"There is a process that has been gone through. And I know it's been extensive and at times, I'm sure, [Canadian Prime Minister] Stephen [Harper] feels, a little too laborious," said Obama, flanked by Harper and Mexican President Enrique Pena Nieto, during a joint press conference at the North American Leaders Summit in Toluca, Mexico.
But Obama added that the lengthy study of the pipeline's effects was how the U.S. made "decisions about something that could potentially have [a] significant impact on America's national economy and our national interests."
Zack Colman, Energy & Environment Writer, and Meghashyam Mali, Assistant Managing Editor
Obama's budget won't shrink cost-of-living increase
President Obama's upcoming budget will not include a reduction in cost-of-living increases for Social Security and other government benefits, an offer he had made to Republicans.
"The compromise embedded in last year's budget included policies like chained CPI -- the No. 1 policy change that Republicans had asked for in previous fiscal negotiations," a White House official said. "However, over the course of last year, Republicans consistently showed a lack of willingness to negotiate on a deficit reduction deal, refusing to identify even one unfair tax loophole they would be willing to close, despite the president's willingness to put tough things on the table."
The chained CPI calculates inflation differently than the standard consumer price index, used to adjust annual benefits payments. Many economists believe it better reflects consumer spending, but it effectively would reduce increases in the benefits programs.
The White House official said Obama's previous offer for a so- called grand bargain to House Speaker John Boehner, R-Ohio, remained on the table if Republicans negotiate a "balanced plan to deal with our long-term fiscal challenges that includes closing loopholes for the wealthiest Americans and corporations. "
The White House is scheduled to release the president's budget March 4.
Democrats welcomed the decision by the White House to drop the budget provision, which is unpopular with progressives.
"Democrats applaud the president for eliminating chained CPI from his budget," said House Minority Leader Nancy Pelosi, D-Calif.
However, Republicans are accusing the president of merely playing to his base ahead of November's elections.
"This reaffirms what has become all too apparent: the president has no interest in doing anything, even modest, to address our looming debt crisis," said Boehner spokesman Brendan Buck. "The one and only idea the president has to offer is even more job- destroying tax hikes, and that non-starter won't do anything to save the entitlement programs that are critical to so many Americans.
"With three years left in office, it seems the president is already throwing in the towel," Buck added.
Brian Hughes, White House Correspondent
Study: Consumers will be hit by Obamacare's insurance tax
A multibillion-dollar tax that President Obama's health care law imposes on the insurance industry will be passed onto consumers, costing individuals and families hundreds of dollars annually starting this year, according to a new study by American Action Forum.
As one way of financing the $2 trillion cost of expanding insurance coverage, Obamacare imposes a tax on the health insurance industry, which is assessed to each insurer based on its share of annual premiums collected by the industry.
But according to the study by Robert Book of the center-right policy group American Action Forum, "insurers will have to pass most of this tax along to policyholders in the form of higher premiums, or possibly higher average out-of-pocket costs or reduced benefits."
The report estimates that in 2014, individuals with employer- sponsored insurance would have to pay $77 extra as a result of the tax and those with family coverage through their employers would have to pay an extra $266. By 2018, that will increase to $139 for individuals and $476 for those with family coverage.
Overall, the fees are projected to raise $8 billion in 2014 and a total of $58.8 billion through 2018.
Philip Klein, Senior Writer
White House expects jump in young, healthy Obamacare enrollees
The White House sidestepped questions about whether the administration would hit its target of seven million Obamacare enrollees after Vice President Joe Biden suggested it would fall short.
Deputy press secretary Josh Earnest said the administration expects a bump in enrollments of young, healthy consumers as the March 31 deadline nears, citing a similar surge when Massachusetts rolled out its health insurance exchanges.
"What they found was that the preponderance of young adults signed up at near the end of the window," he said. "And we do have a similar expectation that the rate of young adults who sign up will increase as ... we get closer to the deadline."
Biden, while meeting with people who had benefited from the health care law or helped sign up consumers, admitted that the administration faced a challenge hitting its goal.
"We may not get to seven million, we may get to five or six, but that's a hell of a start," Biden said.
Earnest highlighted California, where enrollment in the state's exchanges has passed expectations.
"There are some states, some local exchanges, that are ahead of the curve when it comes to signing people up and exceeding their projections," he said.
"Ultimately, what our goal is, particularly the goal that we're focused on over the course of the next six weeks, is to sign up as many people as possible, to educate people about the options that are available to them and let them know that there is an opportunity for them to sign up," Earnest said.
The administration said 3.3 million had signed up for Obamacare as of Feb. 1, but it has failed to share information on how many have paid their first month's premium. The exchanges are also behind their targets on signing up young and healthy consumers needed to offset older, sicker patients.
Meghashyam Mali, Assistant Managing Editor
Obama on Pacific trade pact: 'We'll get this passed'
President Obama said a Pacific trade deal would win approval despite stiff opposition from congressional Democrats.
Obama's liberal allies in Washington have resisted his calls to swiftly approve the Trans-Pacific Partnership, undercutting the president's trade pitch to North American leaders at a summit in Toluca, Mexico.
"We'll get this passed if it's a good agreement," Obama declared.
The president hit back at suggestions that his party was holding up the 12-nation trade accord.
"There are elements in my party that oppose this trade deal," the president said, insisting that the Democrats were not of one view on the pact.
Republicans counter that the Democratic leadership is holding up progress on an area where rare bipartisan agreement exists.
Democrats have opposed "fast-track" legislation that would speed the approval of trade pacts, citing concerns over how the deals would affect the American job market.
Still, Obama made a bit of a sales pitch to his allies back in Washington.
People "concerned about losing jobs," Obama said, should remember that "some of the old agreements put us at a disadvantage."
Brian Hughes, White House Correspondent
Veteran asks Christie to toss his Springsteen CDs
A veteran during a town hall in New Jersey encouraged Gov. Chris Christie, R-N.J., to destroy his Bruce Springsteen CDs.
"When you go home tonight, would you please destroy all your Bruce Springsteen CDs?" he said. "He's not a friend of yours, governor."
Christie joked that he could destroy all the CDs, but that all of the liberal musician's songs were now on his iPhone.
"I don't think I've ever been under the illusion that as a ... fan of his music, that that mean that he and I were necessarily simpatico on a number of other issues," Christie said.
Christie added that artists like Springsteen, who has written many anti-war songs and who spoofed Christie's bridgegate scandal with a version of "Born to Run" on Jimmy Fallon's late-night show, made New Jersey proud, even though some residents might disagree with their politics.
"I think we get attached to certain people as youngsters, which I did," Christie said, admitting that the veteran was probably giving him good advice.
Christie reminded the audience that he had been to 132 Bruce Springsteen concerts.
"It's hard to kind of let that go," he admitted.
Charlie Spiering, Commentary Writer
Obama praises Gap stores for raising minimum wage
President Obama praised Gap Inc. after the clothing retailer announced that it would raise its employees' minimum wage.
"In my State of the Union address, I asked more businesses to do what they can to raise their employees' wages," Obama said. "Today, I applaud Gap Inc. for announcing that they intend to raise wages for their employees beginning this year - a decision that will benefit about 65,000 workers in the U.S."
Reports said Gap, which owns the Banana Republic, Old Navy, Gap and Athleta chains, would raise its minimum wage to $9 in June 2014 and to $10 in June 2015.
Obama has pressed lawmakers to raise the minimum wage to $10.10, but the measure is unlikely to pass the Republican-controlled House, where conservative lawmakers say raising wages could hurt small businesses and hurt job growth.
Obama has made the issue a centerpiece of his push to bolster the middle class and fight income inequality, and signed an executive order raising the minimum wage for new federal contract workers.
A report from the Congressional Budget Office, though, said that while a wage increase would help lift more families out of poverty, it would cost the economy jobs -- a finding the Obama administration disputes.
The president in applauding Gap Inc. pushed lawmakers to raise the minimum wage for all workers.
"Right now, there is a bill in front of both the House and the Senate that would boost America's minimum wage to $10.10 an hour, and lift wages for more than 16 million workers -- all without requiring a single dollar in new taxes or spending," he said. "It's time to pass that bill and give America a raise."
Meghashyam Mali, Assistant Managing Editor
FCC to draft new Internet rules
The Federal Communications Commission said it won't appeal a court decision that struck down broadband Internet rules known as net neutrality and instead will draft a new set of regulations to ensure open access to the Web.
FCC Chairman Tom Wheeler said his agency will write new rules barring Internet providers like Verizon, Comcast or Time Warner from prioritizing its content and charging more for certain services or websites, forcing them to treat all Internet data equally.
"The Internet is and must remain the greatest engine of free expression, innovation, economic growth and opportunity the world has ever known," Wheeler said. "We must preserve and promote the Internet."
A federal court in January said the FCC doesn't have the authority to enforce its net neutrality rules because the agency -- initially set up to regulate communication in an era dominated by telephone and radio -- doesn't classify broadband Internet service as a telecommunications service.
So instead of fighting the decision, Wheeler said the FCC will rewrite its rules that oversee the Internet. He stopped short of saying the agency will reclassify Internet service providers as a telecommunications service -- a move that could create a maelstrom of lawsuits -- but left open the possibility.
"The FCC must stand strongly behind its responsibility to oversee the public interest standard and ensure that the Internet remains open and fair," Wheeler said.
The agency is expected to announced its new rules later this year.
Many Republicans on Capitol Hill are opposed to net neutrality and applauded the court's January ruling, saying the FCC had overstepped its authority and that its rules threatened to stifle a free flow of information on the Internet.
But Democrats worry that without proper oversight, Internet service providers will gouge customers with ever-increasing fees and charge video-dependent websites like Netflix more money for faster service.
Sean Lengell, Congressional Correspondent
Obama apologizes to art historian
President Obama wrote a letter of apology to an art history professor taken aback by his jab at students who majored in the subject.
"Let me apologize for my off-the-cuff remarks," Obama wrote to Ann Collins Johns, a professor at the University of Texas at Austin who emailed the White House. "I was making a point about the jobs market, not the value of art history. As it so happens, art history was one of my favorite subjects in high school, and it has helped me take in a great deal of joy in my life that I might otherwise have missed."
At a speech in Milwaukee last month, Obama suggested that students would be better served pursuing studies in manufacturing than majoring in art history.
"Folks can make a lot more potentially with skilled manufacturing or the trades than they might with an art history degree," Obama said, before adding, "I don't want to get a bunch of emails from everybody."
The art history professor describes herself as an Obama fan but said she reached out to the president to explain the scope of her field.
Obama told her to convey his apology to the rest of her department.
"I was trying to encourage young people," Obama said, "who may not be predisposed to a four-year college experience to be open to technical training that can lead them to an honorable career."
Sen. Marco Rubio, R-Fla., mocked the apology as "pathetic," and suggested the president should encourage young people to take more vocational courses.
"Pathetic Obama apology to art history prof," tweeted the Tea Party favorite. "We do need more degrees that lead to #jobs."
Brian Hughes, White House Correspondent
Las Vegas hopes to bring GOP convention to 'Sin City'
Las Vegas is vying to host the 2016 Republican National Convention and could be the frontrunner if the party's social conservatives can look beyond the gambling mecca's "Sin City" reputation.
A large number of hotel rooms and meeting facilities near a convention hall, restaurants run by America's top chefs and no hurricanes are a few of the reasons why the city appeals to GOP convention organizers.
But gambling, risque entertainment and adults-only hotel pool parties are also a staple of Vegas hospitality. And despite the city's hard sell, it's not clear if the GOP's culturally conservative base is willing to hold their convention there.
Las Vegas must overcome its stigma for vice and excess in a competition that includes more staid communities. Representatives from Cincinnati, Cleveland, Columbus, Dallas, Denver, Kansas City, Phoenix and Las Vegas showed up at Republican National Committee headquarters in Washington to attend "interested cities day."
Although the event is more than two years away, the RNC's site selection process is underway, with official bids to host the gathering due by Feb. 26.
Las Vegas is built to seamlessly host several major conventions simultaneously, and Nevada Lt. Gov. Brian Krolicki said that the city's logistical advantage over other locations is "profoundly compelling."
Krolicki cited statistics that favor Las Vegas' bid: 150,000 hotel rooms in the city, 15,000 luxury suites and its experience with managing conventions. The city hosts 21,000 conventions and welcomes 40 million visitors annually. According to the Las Vegas Convention and Visitors Bureau, nearly 5 million came to town in 2012 to attend a convention.
Las Vegas is also making a strong effort to knock down Republican committee members concerns that "Sin City" would make an inappropriate host.
"Some have criticized Las Vegas as a location," Jim Brulte, the California GOP chairman, wrote in a January email to committee members. "I can only reply that I am a conservative Christian and my denomination has its international conventions in Las Vegas from time to time.
"Why? ... Because putting on conventions is what Las Vegas does every week of every year," he said.
David M. Drucker, Senior Congressional Correspondent
Obama touts 'win-win-win' of higher fuel efficiency standards
President Obama announced new executive actions to develop higher fuel-efficiency standards for medium-and heavy-duty trucks, calling his latest unilateral push a "win-win-win" for jobs, consumers and the environment.
Traveling to Prince George's County, Md., just a few miles from the White House, Obama directed the Environmental Protection Agency and Transportation Department to develop strict greenhouse gas standards that would go into effect in March 2016 for the vehicles.
"Don't make small plans, make big plans," Obama said at a Safeway distribution center, calling the blueprint an "ambitious" way to limit oil imports and protect the environment.
Conservatives, however, counter that Obama's latest effort is just another example of the White House sidestepping Congress to enact the president's agenda.
The president has ramped up his focus on climate change, traveling to California to link the state's historic drought to global warming and push for the creation of a $1 billion fund devoted to studying volatile weather conditions.
According to the White House, heavy-duty trucks account for just 4 percent of all vehicles on the road but more than 20 percent of fuel use and carbon emissions.
"We're taking the next step," Obama said. "We want trucks that use less oil, save money, cut pollution."
Brian Hughes, White House Correspondent
States play shell games to balance budgets
Paying bills late, selling buildings and swiping money from special accounts are some of the gimmicks states are using to bypass balanced budget requirements, according to a report on the tricks being used to paper over deep deficits.
From California to New Hampshire, state governments are using smoke and mirrors instead of cash to meet the constitutional or statutory mandates that they finish their fiscal years with balanced budgets, according to research from State Budget Solutions, a nonpartisan group that monitors state spending.
The total accumulated state debt is about $5.1 trillion, or about $16,178 for every American, according to the group.
"It's really a terrible situation that keeps compounding year after year," said Joe Luppino-Esposito, the organization's editor and counsel. "There absolutely will be a day of reckoning. The biggest joke of it all is that almost every state says it has a balanced budget. A lot of them claim that they have a surplus every year."
The most costly gimmick is underfunding annual payments for government pensions. States now face about $3.9 trillion in unfunded pension liabilities, according to SBS.
California is by far the biggest offender, with more than $583 billion in underfunded pensions. Four states continued to significantly underfund required pension payments in 2013: California, Illinois, New Jersey and New York, SBS research shows.
The SBS calculations use market-based projections to calculate future pension fund earnings, rather than the more optimistic figures used by most states.
Requirements for a balanced budget vary. The National Conference of State Legislatures says 49 states have some balanced budget requirement, though in several states the mandate is weak or not clear. Vermont is the exception.
With the definition of a balanced budget so murky, state governments have long used tricks to make it appear they are not going deeper in debt.
California and New Jersey are the states that use the most gimmicks to balance their budgets, according to SBS. Both states have underfunded pensions, delayed payments, inflated revenue or cost-savings projections, and sold state assets to claim balanced budgets.
Mark Flatten, Watchdog Reporter
Federal Reserve IG to probe spiraling building costs at CFPB
Federal Reserve investigators will examine why renovation costs for the Consumer Financial Protection Bureau's headquarters building have soared to more than three times the original estimate.
"We have received a request ... to conduct a review of the CFPB's renovation project. We have agreed to conduct such a review," a spokesman for the Federal Reserve inspector general told the Washington Examiner.
The request came from Rep. Patrick McHenry, chairman of the House Financial Services Committee's oversight and investigations subcommittee.
The North Carolina Republican's request followed a stormy oversight hearing with CFPB Director Richard Cordray.
The Comptroller of the Currency, the prior occupant of the building at 1700 G St. NW, had estimated renovation costs for the building at $55 million.
But in July, the CFPB announced that the renovation cost estimate had nearly doubled to $95 million.
Then, at the hearing, Cordray stunned lawmakers with an admission that the renovation costs had ballooned to $145 million.
Cordray declined to provide an explanation for the spiraling costs. The CFPB has refused to provide documents on the renovation requested last year by the Examiner in a Freedom of Information Act request.
McHenry said the $145 million in renovation costs almost equals the General Service Administration's assessed value for the building of $154 million. As the federal government's real estate agency, the GSA owns the building, not the CFPB.
In his request for the review, McHenry told inspector general Mark Bialek that he "should evaluate the budgeting process for the renovations, determine if the renovation expenses were subject to a competitive bidding process and conclude whether these dramatic increases are justified."
Cordray has said the building is deteriorating, with inadequate electrical, phone and elevators.
However, a Washington Business Journal article reported that the upgrades are more ambitious, including a rooftop play yard to serve the basement child care center, a "green" roof, interior renovations and a new lobby redesign, as well as new landscaping to create a public plaza.
By placing CFPB under the Federal Reserve when the agency was created in 2010, Congress exempted the bureau from congressional oversight of its budget. But the Federal Reserve IG can investigate the agency.
Richard P. Pollock, Senior Watchdog Reporter
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