From the "we only want to save you from yourself" file.She's at it again! After helping ram through the largest spending bill in the country's history, House Speaker Nancy Pelosi has put cap-and-trade legislation on a forced march through the House of Representatives, and the bill may get a full vote as early as Friday. It looks as if the Democrats will have to destroy the discipline of economics to get it done. Despite House Energy and Commerce Chairman Henry Waxman's arm twisting of House Members , rural and Blue Dog Democrats remain wary of voting for a bill that will impose crushing costs on their home-district businesses and consumers. The leadership's solution to this problem is to simply claim the bill defies the laws of economics.
The Congressional Budget Office did an analysis of what has come to be known as the Waxman-Markey bill.
The CBO estimate is a one-year snapshot of taxes that will extend to infinity. To put it simply, under a cap-and-trade system, government sets a cap on the total amount of carbon that can be emitted nationally; companies then buy or sell permits to emit CO2, (i.e. you got the cash, you get to pollute) . The cap gets cranked down over time to reduce total carbon emissions. As the cap is tightened and companies are stripped of initial opportunities to "offset" their emissions, the price of permits will skyrocket beyond the CBO estimate of $28 per ton of carbon. The corporate costs of buying these expensive permits will be passed to consumers.(here is where we get screwed).
The hit to GDP is the real threat in this bill. The whole point of cap and trade is to hike the price of electricity and gas so that Americans will use less. These higher prices will show up not just in electricity bills or at the gas station but in every manufactured good, from food to cars. (here is where we really get screwed). Consumers will cut back on spending, which in turn will cut back on production, which results in fewer jobs created or higher unemployment. Some companies will instead move their operations overseas, with the same result.
When the Heritage Foundation did its analysis of Waxman-Markey, it broadly compared the economy with and without the carbon tax. Under this more comprehensive scenario, it found Waxman-Markey would cost the economy $161 billion in 2020, which is $1,870 for a family of four.
But from a bunch that just ran the national debt from 1 trillion to 3 trillion in two months, what's $1,870 bucks anyway, huh?
And an interesting fact is the CBO analysis is an average for the country as a whole. It doesn't take into account the fact that certain regions and populations will be more severely hit than others -- manufacturing states more than service states; coal producing states more than states that rely on hydro or natural gas. Low-income Americans, who devote more of their disposable income to energy, have more to lose than high-income families. (this is where the same party that caused the mess comes to the rescue with more government fixes)
But with all that said, an important fact Congressional leaders and environmentalists rarely ever mention outside of a losing debate (every wonder why they won't debate their critics?): America, who has taken dramatic steps to clean up our air and water over the last 40 years won't have much impact on global conditions if China, India and other major polluters don't follow suit and dramatically reduce their own pollutants. And don't give me "The Kyoto Protocol", it's a utopian sham, read it for yourself.
So, until Congressional leaders pass wide sweeping tax breaks to encourage the manufacture and use of cheap non-polluting solar panels for homes and businesses, and quit playing footsy with the extreme environmentalists by allowing them to block where energy producing wind mill farms can be placed (they're big on that "not in my backyard thing " ya know) I will continue to criticize and ride the whole bunch for trying to get into my pockets again rather than do something sensible......and I Want My Country Back!
D.S.
Update: Over the weekend, the cap-and-trade bill grew from 946 pages to 1,201 pages, according to the Sunlight Foundation. I'm sure they are all busy reading over it right now before they vote.
Update: Fri. 6/26: The Democratic-controlled House of Representatives narrowly passed by a 219-212 vote the sweeping legislation, most without even reading it. Forty-four Democrats voted against the bill, while just eight Republicans crossed the aisle to back it.
The legislation now goes to a more sensible Senate Chamber where the bills future becomes less certain.
