Billionaire’s energy tax crusade is risky business for unions

By Jason Stverak

A billionaire investor arrived in Washington Tuesday to kick off a $100 million spending campaign designed to overwhelm the opposition this fall midterms, and senior Democrats were predictably furious.

But this megadonor wasn’t a Koch brother or any other conservative bogeyman. It was Tom Steyer, an environmental activist planning to spend nine figures of his own money to force politicians to support policies that Congress and the public have flatly rejected. However, this moneybomb is a poison pill that is poised to tear apart the Democratic Party from within.

Steyer’s advocacy may be the beginning of the end of the Democratic coalition that we’ve known for the past century. Wine-track coastal progressives have always been an awkward political partner for beer-track, blue-collar union workers, and it may be impossible for the latter to stand idly by while the former spends millions to take away their jobs.

Steyer’s millions will go toward promoting a variety of environmental causes, including opposition to the Keystone XL pipeline, but the California billionaire’s primary objective is a revival of a variety of new energy taxes that will cost all Americans more. and-trade plans, carbon taxes, and oil extraction taxes like Steyer is working for in California, have been political nonstarters since 2009, when the Waxman-Markey climate bill barely passed a House where Democrats held a 78-seat majority, and promptly died in the Senate, which at the time had a 60-Democrat supermajority — the largest majority of liberals that chamber has had in the modern era of politics.

These burdensome energy taxes are dead for a good reason — Democrats killed them. The Waxman-Markey bill, which in effect would have placed an exorbitant tax on the vast majority of American energy, was popular in liberal coastal cities, iffy at best in the suburban swing areas that tilt the balance of power in Congress, and horrifically unpopular in the rural and energy-producing regions of America.

The reason noncoastal Democrats abandoned and-trade and other burdensome energy taxes is because the policies explicitly harm working people, the traditional backbone of the party of Jefferson, Jackson and the New Deal.

Energy production creates real jobs, and not the briefcase-and-cubicle type. Millions of Americans who make a living with their hands work in coal mines, refineries, power plants and the variety of industries directly supported by energy, including manufacturing, construction, plastics, and dozens more.

These jobs have long been one of the bedrocks of the American middle class and are the economic engines of working cities from Pittsburgh to Houston to Duluth. The nascent hydraulic fracturing industry also is creating thousands of jobs in previously depressed areas, offering people still out of work from the recession a chance to start anew.

Further complicating this picture for Steyer is that many of the jobs directly and indirectly supported by the energy he wants to tax are union jobs, and by crusading against energy, he’s biting the hand that feeds the party he claims to support.

Labor unions — and not billionaires like Steyer and the Kochs — were the largest source of outside money in the 2012 elections, spending $1.7 billion (almost all in support of Democrats), and providing Democratic candidates with an unparalleled get-out-the-vote operation. Very little gets done on the left side of the aisle without labor’s blessing, and although most major unions do not oppose and-trade, Steyer’s agenda would lead to the direct loss of union jobs and create unrest in the labor movement.

Steyer’s millions, for example, will advocate for further restrictions on the coal industry, an end to oil and gas pipeline construction, and higher taxes on fuel and electricity. In practice, any of these policies would eliminate blue-collar jobs, and make it harder for families to pay their utility bills. Steyer has said that “we need to reward people whose behavior reduces climate risk, and penalize people who add to it,” either unaware or unconcerned that the people punished will largely be middle-class union workers.

Supporting new energy taxes has proven to be political suicide for any member from an Appalachian or interior state. In fact, 31 House Democrats from moderate and conservative districts — some of whom hadn’t even drawn a challenger the previous year — lost their seats after voting for Waxman-Markey. Opposition to the bill among energy-state senators was so fierce that the Senate never even took up the bill.

Democrats who rely on the votes of blue-collar workers would rather talk about anything but new energy taxes that will delay job growth and slow economic recovery, but Steyer’s millions are going to force them to.

Now, with Democrats defending Senate seats in seven states carried by Mitt Romney in 2012, three more in moderate, rural interior states, and one in coal-heavy Virginia, Steyer wants to unearth this anvil from its political grave and tie it around the necks of anyone who attempts to run under the blue banner.

Jason Stverak is president of the Franklin Center for Government & Public Integrity.