EPW Debate on Lieberman Warner
Senator Barbara Boxer (D-CA), the chairman of the Environment & Public Works Committee, declared in her opening floor speech today that a “recession is the precise time to” enact the Lieberman-Warner global warming cap-and-trade bill because it “brings us hope.”
The Lieberman-Warner global warming bill would have many consequences, but “hope’ is not among them. The Cleveland Plain Dealer editorialized on June 1, that the bill “will just bore new holes into an already battered economy.” American workers, already suffering from a weakening economy, skyrocketing home energy, and gas prices would face more economic pain under the bill. With average gas prices across the country approaching or at $4 a gallon, the Senate’s global warming “de-stimulus” bill will further drive up the cost at the pump.
Despite these economic woes, Senator Boxer claimed that now is the “precise time” to pass a bill that will raise energy prices. “Why do this [the Lieberman-Warner bill] now? We’re in a recession. Precisely because we’re in a recession is why we should be doing this. This bill is the first thing that brings us hope,” Senator Boxer said during her opening remarks on the Senate floor today.
Senator Inhofe said on April 20, 2008: “Only in Washington could higher energy prices be characterized as not negatively impacting the U.S. economy. If Democrats have their way, Americans will pay significantly more at the pump, in their homes, and in many cases, with their jobs, all to accomplish an undetectable impact on the climate. The question now is which U.S. Senator will dare to stand on the Senate Floor a month from now to vote in favor of significantly increasing the price of gas at the pump?”
Here is a sampling of economic government and private economic analyses of the impact of Boxer’s Climate Tax Bill. Read more of the impact of the Lieberman Warner Bill here.
Read Senator Inhofe’s editorial in the Wall Street Journal this morning ”We Don’t Need a Climate Tax on the Poor” and this Roll Call story on Global Warming Draws Heat From Democrats. See Boxer’s claim the biggest tax in history is really the biggest tax cut in history here.
By Robert J. Samuelson, Washington Post
We’ll have to discard the old adage “Everyone talks about the weather, but no one does anything about it.” It is inoperative in this era of global warming, because the whole point of controlling greenhouse gas emissions is to do something about the weather. This promises to be hard and perhaps futile, but there are good and bad ways of attempting it. One of the bad ways is cap-and-trade. Unfortunately, it’s the darling of environmental groups and their political allies.
The chief political virtue of cap-and-trade—a complex scheme to reduce greenhouse gases—is its complexity. This allows its environmental supporters to shape public perceptions in essentially deceptive ways. Cap-and-trade would act as a tax, but it’s not described as a tax. It would regulate economic activity, but it’s promoted as a “free market” mechanism. Finally, it would trigger a tidal wave of influence-peddling, as lobbyists scrambled to exploit the system for different industries and localities. This would undermine whatever abstract advantages the system has. The Senate is scheduled to begin debating a cap-and-trade proposal today, and although it’s unlikely to pass, the concept will return because all the major presidential candidates support it.
Carbon-based fuels (oil, coal, natural gas) provide about 85 percent of U.S. energy and generate most greenhouse gases. So, the simplest way to stop these emissions is to regulate them out of existence. Naturally, that’s what cap-and-trade does. Companies could emit greenhouse gases only if they had annual “allowances”—quotas—issued by the government. The allowances would gradually decline. That’s the “cap.” Companies (utilities, oil refineries) that needed extra allowances could buy them from companies willing to sell. That’s the “trade.”
This is mostly make-believe. If we suppress emissions, we also suppress today’s energy sources, and because the economy needs energy, we suppress the economy. The models magically assume smooth transitions. If coal is reduced, then conservation or non-fossil-fuel sources will take its place. But in the real world, if coal-fired power plants are canceled (as many were last year), wind or nuclear won’t automatically substitute. If the supply of electricity doesn’t keep pace with demand, brownouts or blackouts will result. The models don’t predict real-world consequences. Of course, they didn’t forecast $135-a-barrel oil.
As emission cuts deepened, the danger of disruptions would mount. The Congressional Budget Office has estimated that a 15 percent cut of emissions would raise average household energy costs by almost $1,300 a year. That’s how cap-and-trade would tax most Americans. As “allowances” became scarcer, their price would rise, and the extra cost would be passed along to customers. Meanwhile, government would expand enormously. Call this “environmental pork,” and it would just be a start. Read more here.
Also see Wall Street Journal Editorial here on Cap and Spend.
By George F. Will. WashingtonPost.com
An unprecedentedly radical government grab for control of the American economy will be debated this week when the Senate considers saving the planet by means of a cap-and-trade system to ration carbon emissions. The plan is co-authored (with John Warner) by Joe Lieberman, an ardent supporter of John McCain, who supports Lieberman’s legislation and recently spoke about “the central facts of rising temperatures, rising waters and all the endless troubles that global warming will bring.”
Speaking of endless troubles, “cap-and-trade” comes cloaked in reassuring rhetoric about the government merely creating a market, but government actually would create a scarcity so that government could sell what it had made scarce. The Wall Street Journal underestimates cap-and-trade’s perniciousness when it says the scheme would create a new right ("allowances") to produce carbon dioxide and would put a price on the right. Actually, because freedom is the silence of the law, that right has always existed in the absence of prohibitions. With cap-and-trade, government would create a right for itself-- an extraordinarily lucrative right to ration Americans’ exercise of their traditional rights.
Businesses with unused emission allowances could sell their surpluses to businesses that exceed their allowances. The more expensive and constraining the allowances, the more money government would gain.
A carbon tax would be too clear and candid for political comfort. It would clearly be what cap-and-trade deviously is, a tax, but one with a known cost. Therefore, taxpayers would demand a commensurate reduction of other taxes. Cap-and-trade—government auctioning permits for businesses to continue to do business—is a huge tax hidden in a bureaucratic labyrinth of opaque permit transactions. It would go to a Climate Change Credit Corporation, which Lieberman calls “a private-public entity” that, operating outside the budget process, would invest “in many things.” This would be industrial policy, a.k.a. socialism, on a grand scale—government picking winners and losers, all of whom will have powerful incentives to invest in lobbyists to influence government’s thousands of new wealth-allocating decisions. Read more here.
Icecap Note: The National Association of Manufacturers projected some some startling effects of LW including: Gross Domestic Product (GDP) losses of $151 billion to $210 billion in 2020 and $631 billion to $669 billion per year in 2030; Employment losses of 1.2 million to 1.8 million jobs in 2020 and 3 million to 4 million jobs in 2030; Household income losses of $739 to $2,927 per year in 2020 and $4,022 to $6,752 per year in 2030; Electricity price increases of 28% to 33% by 2020 and 101% to 129% by 2030; Gasoline price increases (per gallon) of 20% to 69% by 2020 and 77% to 145% by 2030. A poll taken by National Center for Public Policy Research found that 65% of Americans reject spending even a penny more for gasoline in an effort to reduce greenhouse gas emissions. When gasoline and electricity price increases are taken together, 90% of Americans reject Lieberman-Warner plan’s costs—even the low-range of the projected costs. An important time to call you senator’s office and express your opinion before its too late.