The ‘Cap-and-Tax’ Fiasco
- Jul 1, 2009 - 4
Basic economic principles teach that achieving sound economic policy requires careful consideration of two expected outcomes: costs and benefits. A majority in Congress has just opted to disregard both.
In a narrow 219-212 vote, the House of Representatives has approved what many call the largest tax increase in American history—all in what many experts view as a futile attempt to control the world’s thermostat. The Waxman-Markey cap-and-trade bill, which restricts industries to specified amounts of greenhouse gases and other carbon emissions they can discharge, garnered support from 211 Democrats and eight Republicans. The damage was done Friday night, just before the House broke for a weeklong July 4 recess.
At its core, the nearly 1,500-page bill is a monstrosity, threatening to make every American who turns on a light switch a loser. First, there is the exorbitant cost. Such a plan amounts to a national energy tax, something cap-and-tax proponent President Obama has admitted will cause electricity rates to “necessarily skyrocket.” According to the Heritage Foundation, a family of four can expect to see their inflation-adjusted energy prices soar an additional $1,870 per year by 2020 and $6,800 per year by 2035 under Waxman-Markey.
Put another way, by 2035 electricity rates are projected to rise 90 percent, with gasoline prices jumping 58 percent and residential natural gas prices similarly climbing 55 percent. That amounts to a loss of $9.4 trillion in GDP. Hit hardest would be the poor, who expend a larger percentage of their income for energy, and people who live in the Midwest, South, and Rocky Mountain regions, where coal is the main fuel for industry and electricity.
The bill is also projected by some to be a job-killer. During the House floor debate, Rep. Tom Price (R-GA) called for a moment of silence for the anticipated 2.3 to 2.7 million jobs lost each year. His request was denied. Meanwhile, rising nations like India and China, with no intention of scaling back greenhouse gas emissions, are prepared to absorb lost American jobs, possibly leaving the United States behind as an economic featherweight.
The bureaucratic web of Waxman-Markey, controlled by some 20 government agencies, is so complex and far-reaching that no industry will be able to avoid entanglement. [See chart (PDF, 28KB) displayed by Republican Leader John Boehner.] Even home ownership will be targeted. Existing homes for sale will face stringent energy audits, and homes under construction will be subject to a 30 percent increase in energy efficiency—that is until it is ratcheted up an additional 50 percent in 2014. And this is only a sampling of the indirect costs to be passed on to Americans.
Then there is the expected benefit—little if anything. Economics aside, the rationale for imposing this massive tax increase—man-made global warming—is itself being viewed with increasing skepticism among scientists. For this reason, global warming, long the catch phrase of the debate, is being replaced with the term climate change. The repackaging is a brilliant move on the part of the proponents. The climate is always in a state of flux, so whether the earth is warming or cooling—as it has done for the last decade—politicians can still pin the blame on humans and cast a doomsday imperative that we must enact sweeping legislative mandates to reduce our carbon footprint.
In spite of the unfortunate House passage of the cap-and-trade bill, the Ethics & Religious Liberty Commission appreciates the calls you made last week to Capitol Hill. Now the focus turns to the Senate, where the bill must be stopped.
If you share our concerns, please tell your senators to vote “no” on the Waxman-Markey bill (H.R. 2454) or any other bill that would place a straightjacket on American industry and saddle generations of Americans with unnecessary tax burdens. You might also want to see how your representative voted on the bill and express either your appreciation or displeasure to him or her.
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1 On Jul 2nd, 2009, at 6:39am, Dreama Taylor wrote:
I’m sorry, but what has become of commom sense? The economy is suffering, families are working ever more diligently to provide basic needs! So let’s make heating/cooling of homes cost even more! Have we entered the Twilight Zone?
Several years ago public uproar was quieted by the promise to offer choice of electric co. by a new law. This news gave us hope, since we live on the line of a rural company which supplies our electric & the company which sells the electric to our company (literally 2 houses between the 2 power lines). We do not, however, have a choice of electric companies. So, we pay double to triple the price of electric-enough cost to make a house payment or provide a college education. NOW, rather than expect hope of relief of this overinflated cost of electric, my husband and I can expect to pay even more to heat/power our home as our son wonders how to pay for college in 1 years’ time. Thank you my country’s leaders!
2 On Jul 2nd, 2009, at 10:35am, Gene Spear wrote:
With the temperatures in the North decreasing steadily, what have we done to lower them? Nothing at all! Maybe we should now do something to keep it from getting too cold. Who is so foolish as to think we can control the temperature of this world? Thousands of great scientists renounce the theory of global warming. Why don’t our senators listen to them?
3 On Jul 2nd, 2009, at 9:44pm, donald wrote:
As for as the Cap and Tax Fiasco,I don’t mean to sound mean but I just want to vent a little if I may. It’s the American people’s fault it’s out fault, what I mean is we put up with what ever the the ones in leadership throw at us, we vote them in,you and I need to speak up and take a stand for what is right(I’m guilty)The ones in leadership don’t have any common since. When your not in tune with God and the Holy Spirit how could you be in touch with reality? I’m not against anyone being rich but some of these people (not all) in leadership positions have always had money and can’t relate to the poor, their focus is not on helping the poor or making the world a better place to live, their focus is on how can we make more money. They have never experienced the like of money and therefore can’t feel the pain of the poor.But Jesus is coming soon, Thanks
4 On Jul 5th, 2009, at 3:20pm, Bud Gruchalla wrote:
Since the main goal of Cap and Trade is to reduce the carbon dioxide emissions in the U.S. and we all emit carbon dioxide as we breathe, can we next expect to be taxed for breathing? After that will population growth be restricted? Perhaps that will be part of the comprehesive health care bill.