China and the United States have been playing a game of chicken: Who's going to cave first to set tough emissions reduction rules?

The outcome could be influenced by who owes whom money, said David Gergen, former advisor to several U.S. presidents and a senior political analyst at CNN.

Gergen, who spoke at the annual Edison Electric Institute (EEI) convention in San Francisco on Thursday, recalled a vignette about President Eisenhower during the Suez Crisis. The British and the French had teamed up with Israel in fighting Egypt over Egypt's attempt to take control of the Suez Canal.

"He called up the British and the French and said, 'You do know we are your creditors, and you're financially dependent on us. If you stay in, then we can cut you off,' " Gergen recounted. "What did they do? They got out. That's the power of being creditors."

He said the story is a cautionary tale to U.S. lawmakers as they work on the details of a climate change bill. Today, the full House of Representatives is expected to vote on the legislation, often dubbed the Waxman-Markey bill after its sponsors.

Some lawmakers and members of President Obama's administration hope the bill would be used to bolster the United States' position when it comes time to negotiate a pact that will succeed the Kyoto Protocol when the countries meet in Copenhagen this December.

The United States particularly wants China to commit to cutting greenhouse gas emissions. But so far China hasn't been willing. China, by the way, became the U.S. government's largest creditor last fall.

"It doesn't help that they have become our biggest creditors. It makes it more difficult to negotiate with the Chinese," said Gergen, who also is a professor at the John F. Kennedy School of Government at Harvard University.

Gergen says China could use its position as the U.S.'s major creditor in international negotiations for the new climate change pact. What China does with the U.S.'s debt could hamper the U.S. government's ability to borrow money and raise interest rates in the United States.

Moving the Waxman-Markey bill along has been tough for Democratic lawmakers. The compromise version that came out of Rep. Henry Waxman's Energy and Commerce Committee last month drew no shortage of scorn and praise from various industry and environmental groups. The version that is before the full House today will not be less contentious.

The most controversial part of the legislation is the cap-and-trade program aimed at reducing manmade greenhouse gas emissions over time.

Various industries, from utilities to cement makers to automotive companies, have fought for free permits. A cap-and trade program sets emissions caps over time and allows companies, states, banks and even individuals to buy and sell permits that allow polluters to meet their emission-reduction requirements.

China wants the United States to set strict emissions caps and spend money to help developing countries to curb their emissions. But China isn't willing to set caps for its own industries, fearing that doing so would lead to more expensive goods and services and severely hurt the country's booming export business (the same argument has been made by U.S. exporters over the Waxman-Markey bill).

Some U.S. lawmakers would like to pass a climate change bill before the Copenhagen meeting to show that the United States, one of the top two emitters in the world, is serious about cutting emissions and should be a leader in the negotiations.

Gergen said that'd be a tall order. The Waxman-Markey bill has to go through the U.S. Senate, which is mired in dealings with healthcare reform and the confirmation of Sonia Sotomayor for the U.S. Supreme Court, he said.

"My sense is that there is a less than 50 percent chance that the Senate will pass this bill before the end of the year," Gergen said.

He said the bill could go through significant changes still and unite critics into a strong force to be reckoned with.

Obama could go to Copenhagen with only the House version of the bill and ask China for concessions in exchange for getting the bill passed in the Senate, Gergen said.

"But that road leads to Beijing," he said.

Tags: cap-and-trade, climate change, emissions, epa, henry waxman