desired, but it paid the price to do so by purchasing pollution “credits.” If a company cut the amount of pollution it released, it could earn credits for doing so and turn around and sell them. This created a “market” for pollution. Polluters paid to pollute, companies earned money by cutting pollution. All the while, government determined how much total pollution was allowed by setting the cap. The government could turn the screws and push the caps downward, making a stronger and stronger incentive to cut emissions.
Cap-and-trade gained support after Bush imposed it on power plants that released sulfur dioxide, which created acid rain. By 2008, emissions were 60 percent lower than they had been in 1980. More importantly, the cuts were made at much lower costs than people had predicted. The cap and trade system on sulfur dioxide was imposed in 1990.
With their bill, the Markey committee aimed to create the largest cap-and-trade system in history. The limit on greenhouse emissions affected virtually every corner of the modern economy, from automobiles, to power plants, to factories. The policy mechanisms to do so, laid out in the bill’s thousand pages, were almost impossibly complex.
Ed Markey unveiled the bill in May of 2008, giving it the consumer-friendly name of “iCAP.” After Obama became president, Nancy Pelosi became emboldened. She helped initiate a coup in the Energy and Commerce Committee. A usually perfunctory vote on the chairmanship went against Dingell. He was replaced by the California liberal Henry Waxman, who vowed to pass a law to control carbon emissions. Ed Markey and his committee, after years of agitating from their basement office, were now in a position to do more than agitate. They were in a position to govern. They had opened a pathway to push their bill through Waxman’s committee.
The iCAP bill was put on the legislative operating table in 2009 and opened back up. It would become known as the Waxman-Markey bill, an ambitious cap-and-trade system that quickly became a centerpiece of Obama’s legislative agenda. The bill had been in the works for years and had been the subject of hundreds of hours of congressional hearings. In the early days of the Obama era, even more hearings were held. The select committee worked even harder as it drafted new language and met with members of Congress and lobbyists from the energy companies and environmental groups.
The long days of grinding work in the basement office were thrilling, in a way, for Phillips. He had the sense that he was a part of history. And he wasn’t the only one. At night, Phillips and his friends went out to drink at cheap bars. They must have felt something like the young staffers back in the 1930s, when the mighty legislative pillars of the New Deal were being put into place. They were laying the governing framework of future generations.
They were part of the strongest governing coalition in years, or perhaps decades. An acquaintance of Phillips’s, a young speechwriter named Dylan Loewe, wrote a book during that time entitled Permanently Blue: How Democrats Can End the Republican Party and Rule the Next Generation. Galley copies were passed around Washington. People read Loewe’s prediction that the Democratic Party was in a position to hold the White House and Congress for the next quarter century, and this prediction seemed entirely believable. The Republicans had been reduced to a factional minority with no clear path back to power. The Democratic Party had the force of history at its back, pushing it forward.
* * *
Koch Industries’ lobbying office was located on the eighth floor of a majestic stone building two blocks from the White House. In early 2009, David Hoffmann—the environmental attorney who’d helped impose Koch’s “10,000 percent compliance” doctrine at Invista’s factories—was still relatively new to Washington, DC. After working for several years in Wichita, he requested a transfer to Washington in 2007 so that he and his wife could enjoy more big-city culture. He moved into an office at Koch’s lobbying shop, even though he was still a compliance attorney. If Hoffmann sympathized with certain elements of the Obama revolution, he also saw the ugly side of the federal government—the complex bureaucracy, and the overbearing paperwork to comply with environmental laws. The Clean Air Act, he said, was a prime example. To comply with the law, there are “literally thousands of items that you need to go over to determine compliance. It takes a full-time staff, working around the clock, to get some of these