I wanted to do more Waxman-Markey blogging, but unfortunately I was overtaken by events. However, I think it's worth noting that what happened with the bill sort of goes to my point about Medicare cost control. One of the ways Obama was going to get the money to pay for health care was from auctioning carbon permits. That went away to get through the House. And the Senate is more conservative about legislation than the lower house.
Now, everyone on the left was united in favoring auctions over giveaways. Auctions also had a fair amount of support on the right, mostly from people who hate corporate welfare even if they also oppose cap-and-trade. And you can whine all you want about how the Republican party had a god-given moral duty to provide political cover to Democrats from coal states (though frankly the complaining about your party's 60-seat senate majority is really starting to sound quite idiotic), but the fact is that at the end of the day, you couldn't do this perfectly obvious thing that has surprisingly broad support among the policy elites of both parties. Instead, the bill was passed in a form that makes it more expensive, and almost totally ineffective.
The fact that you can imagine some perfect bureaucrat administering a beautifully-designed law does not mean that this is actually possible in the American political universe.