CBO puts hefty price tag on emis­sions plan

The Washington Times Weekly - - Politics - BY ED­WARD FELKER

When the House En­ergy and Com­merce Com­mit­tee ap­proved a cli­mate bill last month to re­duce green­house-gas emis­sions, Repub­li­cans — and a few Democrats — pre­dicted that it would im­pose huge costs on the Amer­i­can econ­omy.

Ac­cord­ing to the Con­gres­sional Bud­get Of­fice, they were right.

The CBO, the of­fi­cial, non­par­ti­san score­keeper of Congress, has de­ter­mined in a new anal­y­sis that the so-called “cap-and­trade” sys­tem in the bill would cost Amer­i­can cor­po­ra­tions, pub­lic util­i­ties and the oil and gas in­dus­try $846 bil­lion over 10 years. The bill is the cen­ter­piece of Pres­i­dent Obama’s en­ergy strat­egy.

Most of that money — all but $24 bil­lion — would flow back out from the gov­ern­ment cof­fers in the form of re­bates of var­i­ous kinds to af­fected in­dus­tries, lo­cal power com­pa­nies and re­finer­ies, among oth­ers.

Be­tween $61 bil­lion and $83 bil­lion would be re­turned to lower-in­come fam­i­lies in par­tic­u­lar, ac­cord­ing to the CBO and the con­gres­sional Joint Com­mit­tee on Tax­a­tion, though that num­ber is sub­ject to re­vi­sion when the House Ways and Means Com­mit­tee gets its chance to al­ter the mea­sure’s tax pro­vi­sions this sum­mer.

The gov­ern­ment would also col­lect an ad­di­tional $127 bil­lion in a sep­a­rate pro­gram to cut hy­droflu­o­ro­car­bon emis­sions.

The CBO re­port was a sharp re­minder that the green­house­gas-re­duc­tion plan crafted by House En­ergy and Com­merce Chair­man Henry A. Wax­man, Cal­i­for­nia Demo­crat, and fel­low Demo­crat Rep. Ed­ward J. Markey of Mas­sachusetts would re­quire an ex­pen­sive, com­plex gov­ern­ment pro­gram to achieve its goals.

Un­der their plan, de­clin­ing fed­eral green­house-gas lim­its would be cou­pled with a man­date on af­fected com­pa­nies to buy an­nual emis­sions per­mits, or al­lowances, from the gov­ern­ment or through the mar­ket­place. The com­pa­nies could ex­ceed their pol­lu­tion tar­get by buy­ing ad­di­tional al­lowances or pur­chas­ing “off­set” cred­its from ap­proved forestry and con­ser­va­tion projects. Com­pa­nies that cut their emis­sions faster than re­quired can save their ex­cess al­lowances for fu­ture years, or sell them.

Mr. Markey on June 8 touted the net $24 bil­lion in net deficit re­duc­tion over the next decade that CBO an­a­lysts have pro­jected for the cap-and-trade plan. He told the As­so­ci­ated Press that the re­port shows the bill “will get our planet out of the red, while help­ing to put our bud­get back in the black.”

Op­po­nents seized on the mas- sive price tag as well.

Amer­i­can Petroleum In­sti­tute Pres­i­dent Jack Ger­ard said the pro­jected costs of the emis­sions al­lowances will mean in­creases of as much as 77 cents a gal­lon for gaso­line, and diesel fuel in­creases of 88 cents per gal­lon.

“This is what hap­pens when mar­ket-based reg­u­la­tion is aban­doned in fa­vor of pick­ing win­ners and losers,” Mr. Ger­ard said. “Putting most of the bur­den on one sec­tor also helps ex­plain why the leg­is­la­tion prom­ises to be a job-killer.”

Rep. Dave Camp of Michi­gan, the rank­ing Repub­li­can on the House Ways and Means Com­mit­tee, said the num­bers show Democrats are aban­don­ing Mr. Obama’s pledge not to raise taxes on the mid­dle class. Re­bates to off­set higher en­ergy costs for con­sumers, ac­cord­ing to the CBO, would top out at $359 a year for fam­i­lies mak­ing no more than $42,000 a year.

“In­creas­ing Amer­i­cans’ fuel and util­ity bills in this re­ces­sion is not only bad pol­icy, but it com­pletely ig­nores the hard­ships mil­lions of Amer­i­cans are al­ready fac­ing,” Mr. Camp said.

Repub­li­cans and in­dus­try op­po­nents see the re­port as an ar­gu­ment they can use to rally moderate Democrats to vote against the bill on the House floor. But de­feat­ing the leg­is­la­tion in the heav­ily Demo­cratic House is still con­sid­ered to be an up­hill climb.

AS­SO­CI­ATED PRESS

Reps. Henry A. Wax­man (left) of Cal­i­for­nia and Ed­ward J. Markey (right) of Mas­sachusetts, seen here with fel­low Demo­cratic Reps. Bart Stu­pak of Michi­gan and Betty Sut­ton of Ohio last month, crafted the green­house-gas-re­duc­tion plan.

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