Tuesday, June 30, 2009

How ‘Cap and Trade’ Bill Will Further Cripple the Economy

The Editors

After a contentious session in the House last Friday, the largest tax increase in history – the Waxman-Markey bill – passed 219-211. Touted as a “jobs” bill by its supporters, how many Americans realize that the jobs created will not benefit Americans, but the nations of China and India?. On its face, the bill is part of a noble cause – noble, of course, if you believe that man is responsible for global warming (even though the trend toward global cooling is more evident than ever). In a nutshell, manufacturers will only be allowed a certain amount of carbon emissions. Those who have emissions to “spare” can trade them to other companies that need more. Those who go over the limit will be taxed.

Sounds great, doesn’t it? Let’s Save The Earth™! Until, of course, you realize that all living beings are carbon-based and we all “emit” carbon when we exhale in the form of carbon dioxide. Will individual people end up being taxed just for breathing? But we digress.

Naturally, those companies that are taxed for their emissions will pass the cost on to consumers, driving up the cost of goods and services everywhere. How this helps our tanking economy is still unclear. But there’s an even more worrisome aspect to all of this. Energy prices for all will go up. Perhaps the wealthiest among us can weather such increases, but as the Wall Street Journal points out,

Hit hardest would be the "95% of working families" Mr. Obama keeps mentioning, usually omitting that his no-new-taxes pledge comes with the caveat "unless you use energy." Putting a price on carbon is regressive by definition because poor and middle-income households spend more of their paychecks on things like gas to drive to work, groceries or home heating.

The Congressional Budget Office – Mr. Orszag's former roost – estimates that the price hikes from a 15% cut in emissions would cost the average household in the bottom-income quintile about 3.3% of its after-tax income every year. That's about $680, not including the costs of reduced employment and output. The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9% to 2.7% of income. The rich would pay 1.7%. Cap and trade is the ideal policy for every Beltway analyst who thinks the tax code is too progressive (all five of them).

But the greatest inequities are geographic and would be imposed on the parts of the U.S. that rely most on manufacturing or fossil fuels – particularly coal, which generates most power in the Midwest, Southern and Plains states. It's no coincidence that the liberals most invested in cap and trade – Barbara Boxer, Henry Waxman, Ed Markey – come from California or the Northeast.

President Obama, as part of his claim that this is a jobs bill, said, “There is no longer a debate about whether carbon pollution is placing our planet in jeopardy. It's happening. And there is no longer a question about whether the jobs and industries of the 21st century will be centered around clean, renewable energy. The question is, which country will create these jobs and these industries?"

Whenever you hear anyone say, “There is no longer a debate…” about anything, check your baloney detector. Has Obama spoken to the people of Spain lately? According to a study released in April, “Every ‘green job’ created with government money in Spain over the last eight years came at the cost of 2.2 regular jobs, and only one in 10 of the newly created green jobs became a permanent job.”

Gosh, where do we sign up?

To recap: energy and goods will become more expensive, and any creation of “green” jobs will come at the expense of others. Plus, the bill is chock full of other goodies, such as you not being able to sell your home until a government “expert” deems it environmentally friendly.

And to make this extra-special, Carol Browner of the EPA admitted to reading “major portions” of thebill – but would not state that she had read all thousand or so pages.

The eight Republicans whose votes put this bill in the “bipartisan” category are:

Mary Bono Mack - California
Washington Office: Phone: (202) 225-5330 Fax: (202) 225-2961
Palm Springs Office: Phone: (760) 320-1076 Fax: (760) 320-0596
Hemet Office: Phone: (951) 658-2312 Fax: (951) 652-2562

Michael Castle - Delaware
Washington Office: Phone: (202) 225-4165 Fax: (202) 225-2291
Wilmington Office: Phone: (302) 428-1902 Fax: (302) 428-1950
Dover Office: Phone: (302) 736-1666 Fax: (302) 736-6580
Georgetown Office: Phone: (302) 856-3334

Mark Kirk - Illinois
Washington Office: Phone: (202) 225-4835 Fax: (202) 225-0837
Northbrook Office: Phone: (847) 940-0202 Fax: (847) 940-7143

Leonard Lance - New Jersey
Washington Office: Phone: (202) 225-5361 Fax: (202) 225-9460
Westfield Office: Phone: (908) 518-7733 Fax: (908) 518-7751
Flemington Office: Phone: (908) 788-6900 Fax: (908) 788-2869

Frank LoBiondo - New Jersey
Washington Office: Phone: (202) 225-6572 Fax: (202) 225-3318
NJ Office: Toll Free: (800) 471-4450 Phone: (609) 625-5008 Fax: (609) 625-5071

John McHugh - New York
Washington Office: Phone: (202) 225-4611 Fax: (202) 226-0621
Watertown Office: Phone: (315) 782-3150 Fax: (315) 782-1291
Plattsburgh Office: Phone: (518) 563-1406 Fax: (518) 561-9723
Mayfield Office: Phone: (518) 661-6486 Fax: (518) 661-5704
Canastota Office: Phone: (315) 697-2063 Fax: (315) 697-2064

Dave Reichert - Washington
Washington Office: Phone: (202) 225-7761 Fax: (202) 225-4282
Mercer Island Office: Phone: (206) 275-3438 Fax: (206) 275-3437

Christopher Smith - New Jersey
Washington Office: Phone: (202) 225-3765 Fax: (202) 225-7768
Hamilton Office: Phone: (609) 585-7878 Fax: (609) 585-9155
Whiting Office: Phone: (732) 350-2300 Fax: (732) 350-6260

The Senate will take up the bill after the Independence Day break. If you’d like to make your concerns known, be sure to contact your senators.

Brought to you by the editors and research staff of FamilySecurityMatters.org.


Anonymous said...

I definitely intend to make my feelings known to my senators. Though I at this point I'm beginning to wonder if any of our representatives actually care to listen to us on the matter. Any matter, really.

This bill really does scare me. The rise of costs it will generate on a household and business could be terrible. We're already struggling and this could sound the death bell.

If passed I can't imagine what this will do to the already weak dollar.

GS Don Morris, Ph.D./Chana Givon said...

Appreciate your willingness to speak up-please share with all of your friends-the power still rests with the people and yet we must be willing to exercise this power-all the best-doc

Anonymous said...

Don't worry, Doc, I am sharing it ;-)

Thanks for speaking up yourself.

Did you see what Ron Paul had to say about it?

Cap and Trade: Another Nail in the Economy’s Coffin.