Research Briefing

Meet The Democrats’ New National Energy Tax, Same As The Old National Energy Tax

SEN. JOE LIEBERMAN (I-CT): “You Remember The Artist Formerly Known As Prince? This Is Market-Based System For Punishing Polluters Previously Known As Cap And Trade.” (Coral Davenport, “A Bill Tailored To The Current Climate,” CQ Weekly, 4/19/10)

DESPITE REBRANDING EFFORTS, SENATE CAP-AND-TRADE BILL MIRRORS HOUSE BILL …

After Two Week Delay, Democratic Senators Will Introduce Climate Bill Today. “The leading sponsors of a long-delayed energy and climate change bill said Friday they will press ahead despite losing the support of their only Republican partner… Sens. John Kerry, D-Mass, and Joe Lieberman, I-Conn., said they plan to introduce a bill on Wednesday. The pair made the announcement just hours after Sen. Lindsey Graham, R-S.C., said it's impossible to pass the legislation now because of disagreements over offshore drilling and immigration reform.” (Frederic J. Frommer And Matthew Daly, “Kerry, Lieberman press climate bill without Graham,” The Associated Press, 5/8/10)

But Democrats Attempting To Rebrand “Cap-And-Trade” As “Market-Based System For Punishing Polluters.” “[C]limate co-authors concede that part of what’s going on is really just re-branding… Here’s how Lieberman put it back when the trio began drafting their approach: ‘You remember the artist formerly known as Prince? This is market-based system for punishing polluters previously known as cap and trade.’” (Coral Davenport, “A Bill Tailored To The Current Climate,” CQ Weekly, 4/19/10)

•  Last Year, Sen. John Kerry (D-MA) Sought To Rebrand “Cap-And-Trade” Bill As “Pollution Reduction Bill.” “Kerry last week sought to change the vernacular surrounding the climate bill and sell its concepts more broadly, insisting it is not a ‘cap and trade’ proposal but a ‘pollution reduction’ bill. ‘I don't know what 'cap and trade' means. I don't think the average American does,’ Kerry said. ‘This is not a cap-and-trade bill, it's a pollution reduction bill.’” (Darren Samuelsohn, “Boxer, Kerry Set To Introduce Climate Bill In Senate,” The New York Times, 9/28/09)
• And In Press Conference On Earlier Version Of Bill, “Cap-And-Trade” Got “Nary A Mention” From Kerry And Sen. Barbara Boxer (D-CA) As Rhetoric Focused On “Economic Growth” And “Jobs.” “At a news conference on the bill, cap and trade, the legislation's centerpiece, got nary a mention. Instead, the buzz words were ‘national security,’ ‘economic growth’ and ‘jobs from clean energy development.’ Kerry and Sen. Barbara Boxer, D-Calif., the other key sponsor, entitled it The Clean Energy Jobs and American Power Act.” (Dina Cappiello and H. Josef Hebert, “Senate Climate Bill Drops ‘Cap And Trade’ Term,” The Associated Press, 10/1/09)

Yet “Cap-And-Trade” Still A Core Part Of Senate Dems’ Legislation. “[C]ap and trade is still a core part of their plan. Instead of applying a single cap, the trio is taking a sector-by-sector approach, starting with electric utilities, which produce 40 percent of the nation’s carbon emissions.” (Coral Davenport, “A Bill Tailored To The Current Climate,” CQ Weekly, 4/19/10)

And Senate Dems’ Bill Would Set Same Cap On Carbon As House Dems’ Bill. “The Kerry-Lieberman climate bill is expected to call by 2020 for a 17 percent cut in emissions below 2005 levels, with the emission limits applying in different ways to power plants, petroleum refiners and trade-sensitive manufacturers.” (Darren Samuelsohn, “Senate Climate Bill to Be Rolled Out Wednesday,” The New York Times, 5/7/10, “The American Clean Energy And Security Act,” House Energy and Commerce Committee, 7/09)

A NATIONAL ENERGY TAX THAT WILL HIT THE MIDDLE CLASS AT THE STORE AND THE PUMP …

Under Senate Dems’ Bill, Prices Of Gasoline Would Be Linked To A “Carbon Fee” That Will Drive Up Transportation Costs. “[T]ransportation fuels such as gasoline, which are responsible for 33 percent of the nation’s carbon dioxide, would get a different system: a “carbon fee” added on to the price at the pump. But the fee would be linked to the market price of carbon pollution permits in the other sector.” (Coral Davenport, “A Bill Tailored To The Current Climate,” CQ Weekly, 4/19/10)

“Cap-And-Trade” National Energy Tax Will Lead To Higher Prices For Medicine And Clothing. “Any substantial cost increases imposed directly or indirectly on trucks by H.R. 2454 will curtail the delivery of vital consumer goods across the nation such as food, medicine, and clothing. Constraining the country's freight delivery system would change our way of life for the worse by significantly increasing the cost of everything we buy.” (Statement of G. Tommy Hodges on Behalf of the American Trucking Associations, Inc. (ATA), Before the House Committee on Energy and Commerce, 6/9/09)

Obama's Agriculture Secretary Admitted Farmers' Costs Will Go Up, Eventually Raising Grocery Prices. Rep. Moran (R-KS): “What do you estimate the increase in costs to be for farmers as a result of this legislation?” Sec. Tom Vilsack: “I think it is fair to say there may be additional costs associated with a farming operation ...”; “[T]he reality is that this bill will have huge adverse effects on agriculture because of increases in energy prices and agriculture is energy intensive  that in turn will have impacts on consumer food prices.” (Ag Committee Hearing On Cap & Trade Bill,” Press Release, 6/12/09; Bob Stallman, “Climate Bill Should Not Ignore Agriculture,” American Farm Bureau, 6/11/09)

WILL KILL JOBS AND STUNT ECONOMIC GROWTH …

Senate Dems’ “One-Size-Fits All” System Would Take Power Away From States, Hurting Job Creation. “’To just have one program that would preempt states and have a one-size-fits all federal approach really not only ignores the whole history of success in the environmental area but also would not be the wisest way to go in terms of either maximizing greenhouse gas reductions or to maximize the amount of job creation,’ said Illinois Environmental Protection Agency Director Doug Scott.” (Peter Henderson, “States Fear Devil In Details Of Climate Bill,” Reuters, 4/22/10)

Dems’ Cap-And-Trade National Energy Tax Could Mean Nearly 1 Million Jobs Lost Per Year. “Overall, a cap-and-trade system that reduces annual GDP by 0.34 percent per year can be expected to reduce U.S. employment by roughly 964,900 jobs per year, reduce household earnings by $37.8 billion, and reduce total U.S. economic output by $136.1 billion.” (Andrew Chamberlain, “Who Pays For Climate Policy?,” Tax Foundation, 3/09)

CBO Says “Cap-And-Trade” Would Lead To 3.5 Percent Decrease In GDP By 2050. ”[T]he Congressional Budget Office (CBO) concludes that the cap-and-trade provisions of H.R. 2454, the American Clean Energy and Security Act of 2009 (ACESA), if implemented, would reduce gross domestic product (GDP) below what it would otherwise have been--by roughly 1/4 percent to 3/4 percent in 2020 and by between 1 percent and 3.5 percent in 2050.” (“The Economic Effects Of Legislation To Reduce Greenhouse-Gas Emissions,” Congressional Budget Office, 9/17/09)

AND WILL INCREASE OUR DEPENDENCE ON FOREIGN OIL, WEAKEN OUR NATIONAL SECURITY

Cap-And-Trade System Would Mean Declining Oil Production And More Dependence On Foreign Oil. “In addition to having drastic effects on the economy, the cap-and-trade system could significantly increase gasoline prices in the short run, perhaps as much as 60 cents per gallon ... In the meantime, because of increased costs, oil production would decline making us more, not less, dependent on foreign oil.”  (Michael K. Wohlgenant, Op-Ed, “Why Cap And Trade Is A Bad Idea,” News & Record, 6/26/09)

Dems’ Cap-And-Trade Scheme Would Weaken America's National Security By Threatening Military's Ability To Purchase Fuel. “Cap-and-trade legislation - a cap on domestic growth and competitiveness - weakens our security by forcing an increase in imports and threatens our military's ability to purchase fuel and other material from secure, affordable and reliable American suppliers. Outsourcing our defense logistical needs to foreign entities is a prescription for failure, particularly during a time of war.” (Adm. James A. Lyons, “National Security Omissions,” The Washington Times, 10/18/09)