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Center for American Progress

Pres. Biden Is Holding Off On Climate Emergency Declaration For Now

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On Wednesday, the president will announce other climate actions in Somerset, Massachusetts, but declaring an emergency won’t happen as of now.

President Joe Biden will travel to Massachusetts on Wednesday to promote new efforts to combat climate change, although he will not declare an emergency that would unlock federal resources to deal with the issue despite increasing pressure from climate activists and Democratic lawmakers.

The White House said Tuesday it has not ruled out issuing such a declaration later, which would allow the president to reroute funds to climate efforts without congressional approval. On Wednesday, President Biden will announce other new climate actions when he visits a former coal-fired power plant in Somerset, Massachusetts, which shuttered in 2017 but has since been reborn as an offshore wind power facility.

But since Sen. Joe Manchin hit pause on negotiations over climate spending and taxes last week, the public attention has shifted to a presidential emergency declaration and what the Biden administration could do with the newfound powers.

“It’s not on the table for this week,” Karine Jean-Pierre, White House press secretary, said of a climate emergency declaration. “We are still considering it. I don’t have the upsides or the downsides of it.”

The president has been trying to signal to Democratic voters that he’s aggressively tackling global warming at a time when some of his supporters have despaired about the lack of progress. He has pledged to push forward on his own in the absence of congressional action.

Declaration of a climate emergency would be similar to one issued by former President Donald Trump boosting construction of a southern border wall. It would allow Pres. Biden to redirect spending to accelerate renewable energy such as wind and solar power and speed the nation’s transition away from fossil fuels such as coal, oil and natural gas. The declaration also could be used as a legal basis to block oil and gas drilling or other projects, although such actions would likely be challenged in court by energy companies or Republican-led states.

The focus on climate action comes amid a heat wave that has seared swaths of Europe, with Britain reaching the highest temperature ever registered in a country ill-prepared for such weather extremes.

The typically temperate nation was just the latest to be walloped by unusually hot, dry weather that has triggered wildfires from Portugal to the Balkans and led to hundreds of heat-related deaths. Images of flames racing toward a French beach and Britons sweltering — even at the seaside — have driven home concerns about climate change.

The president vowed late last week to take robust executive action on climate after Sen. Manchin — who has wielded outsized influence on the president’s legislative agenda because of Democrats’ razor-thin majority in the Senate — hit the brakes on negotiations over proposals for new environmental programs and higher taxes on the wealthy and corporations.

One of the biggest backers of fossil fuels within the Democratic caucus, Sen. Manchin has blamed persistently high inflation for his hesitation to go along with another spending package. His resistance has enraged other congressional Democrats who have ramped up pressure on Pres. Biden to act on his own on climate.

“I think given the global crisis that we’re facing, given the inability of Congress to address this existential threat, I think the White House has got to use all of the resources and tools that they can,” Sen. Bernie Sanders, (I) VT, said. “That’s something that I’ve called for, a long time ago.”

Pres. Biden, who served in the Senate for more than three decades, “has been chained to the legislative process, thinking about his past as a senator,” Sen. Jeff Merkley, (D) OR, said at a news conference Monday night. “Now he’s unchained, and he has to go.”

John Podesta, board chairman of the liberal Center for American Progress and a former climate counselor for President Barack Obama, said environmental leaders met with senior White House officials on Friday to discuss policy ideas. Some proposals included ramping up regulations on vehicle emissions and power plants, reinstating a ban on crude oil exports and suspending new leases for oil drilling on federal lands and waters.

“If he’s going to make good on his commitments to do everything he can to bring emissions down, he’s got to pay attention to those critical regulatory issues that are facing him,” Podesta said.

Ben King, an associate director at independent research firm Rhodium Group, said the United States is “nowhere close” to meeting ambitious goals set by Pres. Biden for reducing emissions.

The president escalated the country’s emissions reduction target to at least 50% below 2005 levels by 2030. Under current policies in place at the federal and state level, the U.S. is on track to reach a reduction of 24% to 35%, according to the Rhodium Group’s latest analysis.

“Absent meaningful policy action, we’re far off track from meeting the goals that the U.S. is committed to under the Paris accord,” King said, referring to a 2015 global conference on addressing climate change.

Even as Democrats and environmental groups pushed the president to act on his own, some legal scholars questioned whether an emergency declaration on climate change is justified.

“Emergency powers are designed for events such as terrorist attacks, epidemics and natural disasters,’’ said Elizabeth Goitein, co-director of the liberty and national security program at the Brennan Center for Justice at New York University School of Law.

Such powers “aren’t intended to address persistent problems, no matter how dire. And they aren’t meant to be an end-run around Congress,’’ Goitein wrote in a op-ed for The Washington Post last year.

Additional reporting by The Associated Press.

Related StoryU.K. Government Issues First-Ever Extreme Heat WarningU.K. Government Issues First-Ever Extreme Heat Warning

: newsy.com

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Top U.S. Officials Consulted With BlackRock as Markets Melted Down

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As Federal Reserve Chair Jerome H. Powell and Treasury Secretary Steven Mnuchin scrambled to save faltering markets at the start of the pandemic last year, America’s top economic officials were in near-constant contact with a Wall Street executive whose firm stood to benefit financially from the rescue.

Laurence D. Fink, the chief executive of BlackRock, the world’s largest asset manager, was in frequent touch with Mr. Mnuchin and Mr. Powell in the days before and after many of the Fed’s emergency rescue programs were announced in late March. Emails obtained by The New York Times through a records request, along with public releases, underscore the extent to which Mr. Fink planned alongside the government for parts of a financial rescue that his firm referred to in one message as “the project” that he and the Fed were “working on together.”

While some conversations were previously disclosed, the newly released emails, together with public calendar records, show the extent to which economic policymakers worked with a private company as they were drawing up a response to the financial meltdown and how intertwined BlackRock has become with the federal government.

60 recorded calls over the frantic Saturday and Sunday leading up to the Fed’s unveiling on Monday, March 23, of a policy package that included its first-ever program to buy corporate bonds, which were becoming nearly impossible to sell as investors sprinted to convert their holdings to cash. Mr. Mnuchin spoke to Mr. Fink five times that weekend, more than anyone other than the Fed chair, whom he spoke with nine times. Mr. Fink joined Mr. Mnuchin, Mr. Powell and Larry Kudlow, who was the White House National Economic Council director, for a brief call at 7:25 the evening before the Fed’s big announcement, based on Mr. Mnuchin’s calendars.

book on funds.

On March 24, 2020, the New York Fed announced that it had again hired BlackRock’s advisory arm, which operates separately from the company’s asset-management business but which Mr. Fink oversees, this time to carry out the Fed’s purchases of commercial mortgage-backed securities and corporate bonds.

BlackRock’s ability to directly profit from its regular contact with the government during rescue planning was limited. The firm signed a nondisclosure agreement with the New York Fed on March 22, restricting involved officials from sharing information about the coming programs.

were contracting and its business outlook hinged on what happened in certain markets.

While the Fed and Treasury consulted with many financial firms as they drew up their response — and practically all of Wall Street and much of Main Street benefited — no other company was as front and center.

Simply being in touch throughout the government’s planning was good for BlackRock, potentially burnishing its image over the longer run, Mr. Birdthistle said. BlackRock would have benefited through “tons of information, tons of secondary financial benefits,” he said.

Mr. Mnuchin could not be reached for comment. Asked whether top Fed officials discussed program details with Mr. Fink before his firm had signed the nondisclosure agreement, the Fed said Mr. Powell and Randal K. Quarles, a Fed vice chair who also appears in the emails, “have no recollection of discussing the terms of either facility with Mr. Fink.”

“Nor did they have any reason to do so because the Federal Reserve Bank of New York handled the process with great care and transparency,” the central bank added in its statement.

Brian Beades, a spokesman for BlackRock, highlighted that the firm had “stringent information barriers in place that ensure separation between BlackRock Financial Markets Advisory and the firm’s investment business.” He said it was “proud to have been in a position to assist the Federal Reserve in addressing the severe downturn in financial markets during the depths of the crisis.”

The disclosed emails between Fed and BlackRock officials — 11 in all across March and early April — do not make clear whether the company knew about any of the Fed and Treasury programs’ designs or whether they were simply providing market information.

Fed chair’s official schedule from that March. Those calendars generally track scheduled events, and may have missed meetings in early 2020 when staff members were frantically working on the market rescue and the Fed was shifting to work from home, a central bank spokesman said.

Mr. Powell’s calendars did show that he talked to Mr. Fink in March, April and May, and he has previously answered questions about those discussions.

“I can’t recall exactly what those conversations were, but they would have been about what he is seeing in the markets and things like that, to generally exchanging information,” Mr. Powell said at a July news conference, adding that it wasn’t “very many” conversations. “He’s typically trying to make sure that we are getting good service from the company that he founded and leads.”

BlackRock’s connections to Washington are not new. It was a critical player in the 2008 crisis response, when the New York Fed retained the firm’s advisory arm to manage the mortgage assets of the insurance giant American International Group and Bear Stearns.

Several former BlackRock employees have been named to top roles in President Biden’s administration, including Brian Deese, who heads the White House National Economic Council, and Wally Adeyemo, who was Mr. Fink’s chief of staff and is now the No. 2 official at the Treasury.

in early 2009 to $7.4 trillion in 2019. By the end of last year, they were $8.7 trillion.

As it expanded, it has stepped up its lobbying. In 2004, BlackRock Inc. registered two lobbyists and spent less than $200,000 on its efforts. By 2019 it had 20 lobbyists and spent nearly $2.5 million, though that declined slightly last year, based on OpenSecrets data. Campaign contributions tied to the firm also jumped, touching $1.7 million in 2020 (80 percent to Democrats, 20 percent to Republicans) from next to nothing as recently as 2004.

short-term debt markets that came under intense stress as people and companies rushed to move all of their holdings into cash. And problems were brewing in the corporate debt market, including in exchange-traded funds, which track bundles of corporate debt and other assets but trade like stocks. Corporate bonds were difficult to trade and near impossible to issue in mid-March 2020. Prices on some high-grade corporate debt E.T.F.s, including one of BlackRock’s, were out of whack relative to the values of the underlying assets, which is unusual.

People could still pull their money from E.T.F.s, which both the industry and several outside academics have heralded as a sign of their resiliency. But investors would have had to take a financial hit to do so, relative to the quoted value of the underlying bonds. That could have bruised the product’s reputation in the eyes of some retail savers.

fund recovery was nearly instant.

When the New York Fed retained BlackRock’s advisory arm to make the purchases, it rapidly disclosed details of those contracts to the public. The firm did the program cheaply for the government, waiving fees for exchange-traded fund buying and rebating fees from its own iShares E.T.F.s back to the New York Fed.

The Fed has explained the decision to hire the advisory side of the house in terms of practicality.

“We hired BlackRock for their expertise in these markets,” Mr. Powell has since said in defense of the rapid move. “It was done very quickly due to the urgency and need for their expertise.”

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Gary Gensler, Wall Street’s New Watchdog, Has a Full Plate

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Mr. Gelzinis said Mr. Gensler would probably draw on his familiarity with the subject matter — he taught classes on blockchain technology at the Massachusetts Institute of Technology — to approach regulation around digital currencies more strategically. That would be a departure from his predecessor Jay Clayton, who favored enforcement actions against initial coin offerings without providing much regulatory guidance, he added.

Paul Grewal, chief counsel of Coinbase, the cryptocurrency exchange that went public last week, said the industry was “hopeful” about Mr. Gensler, noting that he is fluent in its language. Mr. Grewal said the industry wanted Mr. Gensler to provide clarity on how securities regulators decide when a digital asset is considered a security and subject to S.E.C. review, as opposed to a currency that is largely free from S.E.C. oversight.

The question grew in importance after the S.E.C. sued the San Francisco company Ripple Labs in December over the sale of its popular digital tokens to the public. The S.E.C. said the company was selling unregistered securities, while Ripple and others said the tokens should be classified as a digital currency. The enforcement action was one of the last brought before Mr. Clayton stepped down as chairman in the waning days of the Trump administration.

More recently, a brokerage affiliated with Sustainable Holdings, a financial technology company, asked the S.E.C. to weigh in on whether nonfungible tokens, which are being used to create digital art, are securities that require registration. The company, in its letter, asked the S.E.C. “to engage in a meaningful discussion of how to regulate fintech companies and individuals that are creating NFTs that may be deemed digital asset securities.”

Mr. Gensler, while teaching at M.I.T., acknowledged that regulators had struggled with how to treat digital assets. In a 2018 interview, he said digital assets could at times appear to be both a commodity and a security. At his Senate confirmation hearing, Mr. Gensler spoke strongly for heightened requirements for companies to disclose climate risks and diversity efforts.

“Diversity in boards and senior leadership benefits decision-making,” he said.

Mr. Gensler declined to be interviewed.

One thing the past three months have shown is that the stock and bond markets have a way of quickly writing the agenda for anyone who leads the S.E.C. That means SPACs will almost certainly be scrutinized. In particular, Mr. Gensler will have to determine whether these blank-check companies are a good market innovation for taking fledgling companies public or an investment vehicle that has the potential to harm retail investors, Mr. Hawke of Arnold & Porter said.

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