The New New Deal (43 page)

By the end of the Tea Party summer, Obama’s approval ratings had fallen almost as sharply as the Recovery Act’s. He was down in the low 50s, mere mortal territory. The partisan divide that preceded his presidency was firmly back in place.

Congressional Democrats were starting to worry about the ominous trajectory of public opinion. At a White House tribute to country music, the Blue Dog Baron Hill told the president: The stimulus was great, but you’re not doing enough to sell it.

“I know exactly what you’re saying,” Obama replied. “And you’re exactly right.”

T
he first time Rahm Emanuel summoned Energy Department stimulus czar Matt Rogers to his office, he wanted to know what was happening with the smart grid. More specifically, he wanted to know: Why the fuck wasn’t anything happening with the smart grid? The Recovery Act had included a $4.5 billion grant program. So? Hello?

Rogers explained that there had been some delays in designing the new grant competition, and then some disputes with OMB bean counters about those designs. What he didn’t bother to explain was: Change is hard. Transforming America’s antiquated grid—and America’s fossil-fueled economy—wouldn’t happen overnight.

Rogers’s mission statement for the Recovery Act was: “Money Out Quickly—To Good, Enduring Projects—With Unprecedented Transparency—Making a Down Payment on the Energy & Environmental Future of the Country.” But there was real tension between the first part of that mission and the rest of that mission. In the fall of 2009, the Government Accountability Office found that most of the stimulus was spending out ahead of schedule.
³¹⁶
But the long-term investments designed to change the country were a lot trickier to get out quickly than business-as-usual investments.

Rahm wanted long-term change, too. Rahm’s Rule, after all, was
his rule. And he knew his boss was obsessed with that frigging grid. But that was all the more reason to produce some quick results. Why couldn’t Rogers just buy Americans $4.5 billion worth of digital smart meters? It would be easy. It would give the public something visible. And it would help fulfill Obama’s promise of forty million meters, so Rahm wouldn’t have to worry about the frigging grid anymore.

Rogers was hoping to avoid another fusillade of F-bombs, but he pushed back. Handing out smart meters before starting work on the rest of the smart grid—sensors, routers, automated substations, “synchrophasors”—would be like handing out iPhones before there was a 3G network. Smart meters could be an amazing tool, helping consumers track their electricity use and reduce their electricity bills. They could make meter readers obsolete, and help utilities pinpoint problems automatically instead of deploying battalions of trucks to troubleshoot entire neighborhoods. But they’d be virtually useless if the rest of the grid was still dumb. They needed to be part of a digital ecosystem with smart substations and smart transmission lines, where information would flow along with electrons. Synchrophasors might sound like
Star Trek
wackiness, but these dishwasher-sized metal boxes could monitor and control high-voltage wires hundreds of miles away, providing reams of data every 1/30 of a second, limiting costly outages and wasteful leakage. Anyway, it made sense to let utilities devise solutions for their own networks, rather than dictate from Washington. Maybe they’d have good ideas. Maybe those ideas would spread.

Rahm grudgingly agreed to a comprehensive approach, though he wasn’t thrilled about paying for doodads nobody would see. But he did demand a faster timetable. And he had one additional demand.

“I
never
want to hear you say the word ‘synchrophasor’ in public,” Rahm said. “Nobody will know what the fuck you’re talking about.”

T
he second time Rogers was summoned to Rahm’s office—and the third, and the fourth—the topic was low-income home weatherization. The Recovery Act created all kinds of bureaucratic headaches, but weatherization was a bureaucratic aneurysm. There’s no better example of the bumps on the road to change.

American homes waste ungodly amounts of energy, and studies suggest that modest efficiencies—sealing ducts; adding insulation; upgrading furnaces, air conditioners, and windows—could save homeowners $40 billion a year. This was the kind of policy no-brainer that Obama loved. At an event at a Home Depot in Virginia, he declared that contrary to popular belief, insulation was sexy: “Here’s what’s sexy about it: Saving money!” Saving energy, slashing emissions, and employing an army of workers with caulk guns sounded alluring, too.
³¹⁷
Obama had vowed to weatherize one million homes a year during the campaign, and had steered $5 billion into Energy’s $200 million weatherization program through the stimulus. The goal was not only to “green the ghetto”—a phrase coined by White House green jobs adviser Van Jones, a charismatic urban activist and author of
The Green Collar Economy
—but to train a weatherization workforce, spur demand for green products, and eventually create a national culture where tuning up homes would be as routine as tuning up cars.
³¹⁸

“The idea was, if you put in a chunk of change, you can stand up a new sector,” says Jones, who had founded an advocacy group called Green For All that had called for a Green New Deal. “And damn! That was a serious chunk of change.”

It was a nice idea, although Jones wouldn’t get to see it through; he was forced to resign after Glenn Beck used his pre-White House activism to make him a poster child for White House radicalism. And by summer’s end, many states had yet to weatherize a single home. At the rate the money was moving, it would have taken a century to do a million.

To put it mildly, Rahm wasn’t pleased. How hard could it be to seal a drafty window or insulate an attic? What the—oh, you get the idea.

“What a nightmare,” Rogers recalls. “That program had issues.”

E
arly on, the White House wanted to see the Energy Department’s plan for weatherizing one million homes a year.

We’re not going to do one million homes a year, Rogers said. We’re not going to do one million homes, period.

Say what? The president had promised one million homes a year. Recovery Act coordinator Ed DeSeve told Rogers: This isn’t optional.

Rogers was a can-do guy, but he was also a numbers guy. He had enough funding to do 600,000 retrofits over three years. “We’re not trying to be cute,” he told DeSeve. “The arithmetic is the arithmetic.”

That was just the first snafu. Soon a bigger one threatened to turn even the 600,000-home goal into a pipe dream. Weatherization had always been exempt from the Hoover-era Davis-Bacon law, which required federal projects to pay the “prevailing wage” for similar jobs in the local area. But in the fine print of the Recovery Act, union-friendly congressional Democrats extended Davis-Bacon to weatherization, even though the Labor Department had never set prevailing wages for weatherization jobs. So hundreds of local nonprofits that should have been hiring to handle the surge of new cash were waiting for instructions, unwilling to risk fines for underpaying employees or misfiling reports. Davis-Bacon would delay the program six months and make it a national symbol of stimulus sluggishness.

The issue itself was mind-numbingly dull. Rogers didn’t care all that much whether caulkers were paid as “laborers,” “carpenters,” or “construction workers.” He just wanted guidance, so the local agencies could start hiring and start caulking. But after months of haggling—and heavy union lobbying—the Labor Department decided to create an entirely new job classification for weatherization, which required an entirely new wage survey of every U.S. county. Secretaries Chu and Solis signed a joint letter encouraging the agencies to start hiring anyway, suggesting they could estimate prevailing wages under existing
classifications. But the agencies were flummoxed. At one point, Rogers and assistant energy secretary Cathy Zoi surfed the Labor Department’s website to try to figure out an appropriate wage for Chicago. They were flummoxed, too.

“And I think we’re reasonably intelligent people,” Rogers says.

“They didn’t even have a search function,” Zoi scoffs.

Labor did rush to compile the new wage rates in just a few months. But then it ruled that the new rates couldn’t apply to more ambitious building retrofits funded through state and local energy efficiency grants. Those projects would have to determine wages on a case-by-case basis. Labor even decided that consumers who used stimulus incentives for efficiency upgrades in their own homes should pay prevailing wages, a ruling so nutty that Chu called Solis from India to get it reversed.

But the damage was done. The Government Accountability Office, the department’s inspector general, and the media all savaged the weatherization program’s slow pace.
³¹⁹
In 2009, it only finished 30,252 homes. California, which was supposed to do 2,500 a month, completed 12.

The Energy Department couldn’t put all the blame on Davis-Bacon, not when its own bureaucratic follies evoked Dilbert cartoons. Its Office of Weatherization and Intergovernmental Programs, which oversaw $6.3 billion worth of state and local grants as well as the low-income retrofits, was known as “The Turkey Farm” for the quality of its staff. Since it’s almost impossible to fire non-performing civil servants, Bush’s Energy Department officials had stockpiled their stiffs in the weatherization division, hoping to get rid of the deadwood en masse by killing the program or shifting it to another department. And the Obama team struggled to bring in new blood to handle all the new money—described in one agency PowerPoint as “Massive Funding: BBBBBBBBILLIONS!”—in part because a bureaucrat in Golden, Colorado, nearing retirement, wasn’t signing off on new hires.
³²⁰
Her boss in Washington had fallen off a roof hanging Christmas lights—shades of
The Office
—so the process slowed to a near halt. And the civil servant overseeing the
division in Washington, an enthusiastic advocate for weatherization, was not the kind of head-banger who could battle the bureaucracy and end the inertia. When the numbers failed to improve, Zoi and Rogers shifted him to an outreach role.

The Turkey Farm needed a leader who could ruffle a few feathers.

C
laire Broido Johnson was another best-and-brightest wunderkind you wouldn’t expect to find in middle management at a federal agency. She majored in environmental science and public policy at Harvard—she helped create the major—and later graduated from Harvard Business School. After stints structuring energy deals for major banks and corporations—including ill-fated Enron, as her detractors often noted—she helped found SunEdison, which used an innovative financing model to become the nation’s largest solar provider. She wasn’t much of a diplomat, but she had the brains, private sector instincts, and bull-in-a-china-shop mentality the department needed to get its creaky weatherization office up to stimulus speed.

“She was like a hurricane hitting the building,” says one civil servant.

Johnson’s mission was simple: Get the money out. So she set metrics and goals for every weatherization agency and state energy office, forced program officers to call them weekly to monitor their progress, and distributed national rankings of spend-out rates to encourage interstate competition. She launched initiatives with military-style code names like Operation GreenLight, Operation QuickDraw, and Operation FastTrack to streamline grant procedures and pressure spending slowpokes. When it became clear that local governments applying for grants were struggling to navigate federal red tape—the department’s procurement requirements for energy-efficient furnaces and radioactive nuclear materials were not that different—Johnson moved dozens of her top performers (the “SWAT team”) into a makeshift call center in the department’s basement (the “dungeon”), where they spent weeks leading small-town mayors and big-city energy officials through the process.

“I was spending my own money at Costco to bribe them with cookies and candy and lunches,” Johnson says.

The cookies were nice, but Johnson was a tough one. She had no patience for stupid rules or stupid people. Her focus was getting the money out, and she expected that to be everyone else’s focus. “Her mantra was: Spend!” says one of her internal critics. “Claire, I broke my arm. Fuck it! Spend!” When her underlings wanted to forge an interagency partnership that seemed worthy but wouldn’t have helped get the money out, she shot it down with a caustic email: “I really don’t understand why we’re spending time on this.” Many state and local officials resented the department’s harassment over spend-out rates, and its bias toward quick and proven efficiency upgrades like LED streetlights and traffic lights. New Hampshire set up several unusual initiatives—a revolving loan program for green businesses, rebates for wood pellet heating systems to replace fuel oil—and found itself on the receiving end of frequent federal nasty-grams.

“The word that comes to mind is ‘eviscerate.’ We had our guts pulled out through our noses,” says Laura Richardson, the state energy office’s stimulus coordinator. “All they cared about was: Get the money out.”

Johnson set the brutal tone, but she was responding to pressure from Rogers, who was responding to Chu, who was responding to the White House. Maybe her bulldog style might have been hailed as “hard-charging” if she had been an older man, rather than a petite blonde in her mid-thirties. But she was not hailed at the Turkey Farm. Early on, when she asked all of the division’s staffers what they were accountable for, two responded: “You can’t make me accountable for anything.” One employee buried his nose in a newspaper whenever she approached. When she chastised another lifer for napping on the job, he filed a union grievance.

Increasingly frustrated, Johnson launched a secret “Operation Cupcake” to try to fire the worst laggards, but she never stood a chance against the cupcakes. They knew that political appointees come and go, but civil servants are forever. They called themselves “WeBe’s,” as in: We be here, you be gone.