Carbon tax debate exposed rift among Trump’s aides

Source: By Jeff Greenfield, Politico • Posted: Friday, March 24, 2017

When former Secretary of State James Baker and his allies came to the White House last month to pitch a carbon tax, they received a warm reception from Gary Cohn, one of the president’s top economic advisers.

Six weeks later, the friendly meeting with advocates of the highly controversial policy proposal is still reverberating in the White House, underscoring the increasingly tense relationship between Cohn and Steve Bannon, Trump’s powerful chief strategist, who have staked out vastly different ideological approaches to West Wing matters.

Any tax would raise significant resistance from Republicans, and one Cohn ally says he has not been making active arguments for the tax internally. But the meeting nonetheless set off alarm bells for Bannon and his allies, who regard Cohn with growing suspicion and see climate change as a key point of tension between Trump’s moderate and hard-line conservative advisers. And they say Cohn — a registered Democrat — is a secret supporter of the tax.

“Our objective was twofold: to put this plan on their radar screen and for them not to dismiss it,” said Ted Halstead, president of the Climate Leadership Council, who attended the Feb. 8 meeting. “They have not dismissed it, which, given that part of it is a carbon tax, is significant.”

When asked on Tuesday whether Cohn, head of the National Economic Council, supported a carbon tax, White House press secretary Sean Spicer said there was a “robust” discussion ongoing about taxes.

“Part of the NEC’s responsibility in coordinating economic policy for the president is to listen to a range of viewpoints on various issues. The Trump administration is not considering a carbon tax,” Lindsay Walters, a White House spokeswoman, said later Tuesday evening, in response to questions.

It is unlikely such a tax would pass Congress or gain the White House’s support, with conservative allies, including the influential Heritage Foundation, fiercely opposed to the idea of a new tax and skeptical about global warming. “I have always been against a carbon tax,” said Rep. Chris Collins, a conservative New York lawmaker close to Trump.

But hard-line conservatives in the White House see advancing the notion that Cohn is supportive of the tax as one way to diminish the standing of the former Goldman Sachs executive, a New York power broker who often embraces practicality over politics.

It also is just one example of how tensions have flared inside the White House as different factions try to shape the ideological core of the West Wing and compete for Trump’s ear.

After Zeke Emanuel, one of the Affordable Care Act’s architects, came to the White House for a meeting with Trump, Speaker Paul Ryan and Health and Human Services Secretary Tom Price on Monday, conservatives and some White House aides were displeased, including Bannon, according to a source familiar with the situation. The strategist skipped the meeting, even though other top White House officials attended.

“Why would he be in here?” one adviser said of Emanuel. “We are trying to pass a new law, not promote theirs.”

“That is why the Hill thinks Cohn is not conducive to getting any legislation passed,” one White House official said, when asked about the meeting, accusing Cohn of orchestrating the meeting, a claim a White House spokeswoman denied.

Cohn allies say the former Goldman Sachs banker is injecting some realism and a practical sensibility into the White House, and that Trump has frequently talked to Emanuel privately.

Bannon and Stephen Miller, another top White House aide with hard-line views, have been noticeably quiet on the health care law, with Bannon often talking to the conservatives who oppose it and grousing about it privately to associates. “He doesn’t like the law, but he understands that if it fails, it could hurt his agenda to do things he wants,” one person who spoke to Bannon recently said.

One administration official said different White House aides are giving different pitches and messages to Capitol Hill lawmakers on replacing Obamacare. “What you hear depends on who you talk to and what faction they are from,” said one senior GOP aide.

One of the most heated debates in the West Wing has proved to be the Paris climate change agreement. People inside and outside the White House say it’s unclear where Trump will come down on the agreement, but that it will be a test of Bannon’s and Cohn’s influence. Bannon has opposed the deal, separating him from many other advisers, including Trump’s daughter Ivanka and her husband, Jared Kushner, and further heightening his tensions with Cohn.

Cohn is said to be avoiding taking a formal position on the Paris agreement, but several of his aides have been quietly mulling a plan to stay in the deal, while weakening a domestic emissions reduction target put forward by former President Barack Obama and trying to win incentives for fossil fuels. It is, these people said, a practical way to handle the matter.

Halstead said the carbon tax plan that advocates promoted in the White House includes regulatory rollbacks, and dividends for Americans from the proceeds of the tax. Carbon would likely be taxed at $40 per ton or so. Their argument was it would help growth, rebalance trade and reduce regulations, while fighting climate change. It is a plan, he said, that strikes a compromise.

“A carbon tax by itself is unpopular and a political dead end,” said Halstead. “By contrast, our conservative carbon dividends plan is both popular and populist, because the great majority of Americans would come out ahead.”