Cap and Tax and Tax and Tax …. Update

The Competitive Enterprise Institute filed a Freedom of Information Act request with the US Treasury Department to obtain a copy of a report done by Treasury. The report shows the annual cost to each household, should the Cap and Trade bill passed by the House in July become law, would be $1,761. I wrote on Cap and Tax and Tax and Tax on Sept 1.

This is in comparison to a report done by the Energy Information Administration (EIA) at the behest of Congressmen Henry Waxman (D-CA) and Ed Markey (D-MA) that estimates H.R. 2454, the American Clean Energy and Security Act of 2009 (ACESA) will cost $83 dollars a year. That’s about 23 cents a day!! Even the Congressional Budget Office estimated a cost of $175 per year, which by the way was pilloried in an opinion piece in the Wall Street Journal last June 26.

Let’s just do some very rudimentary math, shall we? The George C. Marshall Institue developed a report (pdf here) estimating that by 2015, gasoline prices would increase between 9 to 145%. That’s a pretty broad range, so lets be really conservative and use 15%. The US average cost for a gallon of gasoline today is $2.57. A 15% percent increase would add $0.38 per gallon.

Lets say you travel 20 miles to work and back each day, that’s 200 miles per week or 10,200 miles per year (that accounts for one week of vacation). Next, lets say your car gets 20 miles-per-gallon on average. That means you use about 2 gallons per day to get back and forth to work. Those two gallons will cost you an additional $0.77 per day, or $196 per year … and that is at a very conservative 15% increase. A 50% increase would cost you an additional $653 per year, and we haven’t even begun to talk about the increases of your cost for electricity (electricity is predicted to increase much more than gasoline) or natural gas.

Cap and Tax and Tax and Tax and Tax will also impact the cost of almost everything else you buy, from groceries to stereos to automobiles to tires to homes. If you think the US’ economy is in the tubes now, wait until your most favorite politician gets his way and signs this monstrous piece of legislation into law.

Cap and Tax and Tax and Tax and Tax ……

It has been a while since I last posted. A number of things have converged to the point that I just didn’t have the initiative to write … on anything! However, it’s time to pull myself up by my boot-straps (I always mentally image someone defying gravity as they lift themselves off the floor) and get back to it.

There are so many topics to muse on, so this evening I’ll post on Owe-bamacare. For now, I’d like to pass along the text of a speech Senator James Inhofe (R-OK) made in the last meeting of the Senate’s Environment & Public Works Committee prior to the August recess.

Climate Change and Ensuring that America Leads the Clean Energy Transformation

August 6, 2009

Madame Chairman, thank you for holding this hearing today. This is the last hearing on climate change before the August recess, so I think it’s appropriate to take stock of what we’ve learned.

Madame Chairman, since you assumed the gavel, this committee has held over thirty hearings on climate change. With testimony from numerous experts and officials from all over the country, these hearings explored various issues associated with cap-and-trade-and I’m sure my colleagues learned a great deal from them.

But over the last two years, it was not from these, at times, arcane and abstract policy discussions that we got to the essence of cap-and-trade. No, it was the Democrats who cut right to the chase; it was the Democrats over the last two years who exposed what cap-and-trade really means for the American public.

We learned, for example, from President Obama that under his cap-and-trade plan, “electricity prices would necessarily skyrocket.”

We learned from Rep. John Dingell (D-Mich.) that cap-and-trade is “a tax, and a great big one.”

We learned from Rep. Peter DeFazio (D-Ore.) that “a cap-and-trade system is prone to market manipulation and speculation without any guarantee of meaningful GHG emission reductions. A cap-and-trade has been operating in Europe for three years and is largely a failure.”

We learned from Sen. Dorgan (D-N.D.) that with cap-and-trade “the Wall Street crowd can’t wait to sink their teeth into a new trillion-dollar trading market in which hedge funds and investment banks would trade and speculate on carbon credits and securities. In no time they’ll create derivatives, swaps and more in that new market. In fact, most of the investment banks have already created carbon trading departments. They are ready to go. I’m not.”

We learned from Sen. Cantwell (D-Wash.) that “a cap-and-trade program might allow Wall Street to distort a carbon market for its own profits.”

We learned from EPA Administrator Lisa Jackson that unilateral U.S. action to address climate change through cap-and-trade would be futile. She said in response to a question from me that “U.S. action alone will not impact world CO2 levels.”

We learned from Sen. Kerry (D-Mass.) that “there is no way the United States of America acting alone can solve this problem. So we have to have China; we have to have India.”

We learned from Sen. McCaskill (D-Mo.) that if “we go too far with this,” that is, cap-and-trade, then “all we’re going to do is chase more jobs to China and India, where they’ve been putting up coal-fired plants every 10 minutes.”

In sum, after a slew of hearings and three unsuccessful votes on the Senate floor, the Democrats taught us that cap-and-trade is a great big tax that will raise electricity prices on consumers, enrich Wall Street traders, and send jobs to China and India-all without any impact on global temperature.

So off we go into the August recess, secure in the knowledge that cap-and-trade is riddled with flaws, and that Democrats are seriously divided over one of President Obama’s top domestic policy priorities.

And we also know that, according to recent polling, the American public is increasingly unwilling to pay anything to fight global warming.

But all of this does not mean cap-and-trade is dead and gone. It is very much alive, as Democratic leaders, as they did in the House, are eager to distribute pork on unprecedented scales to secure the necessary votes to pass cap-and-trade into law.

So be assured of this: We will markup legislation in this committee, pass it, and then it will be combined with other bills from other committees. And we will have a debate on the Senate floor.

Throughout the debate on cap-and-trade, we will be there to say that:

According to the American Farm Bureau, the vast majority of agriculture groups oppose it;

According to GAO, it will send our jobs to China and India;

According to the National Black Chamber of Commerce, it will destroy over 2 million jobs;

According to EPA and EIA, it will not reduce our dependence on foreign oil;

According to EPA, it will do nothing to reduce global temperature;

And when all is said and done, the American people will reject it and we will defeat it.

Thank you, Madame Chairman.

There are many markets around the world trading in many different types of commodities. The so-called Cap and Trade legislation ostensibly creates a marketplace in which to trade in ‘carbon credits.’ There is however, a significant distinction between ‘carbon credits’ and every … every other commodity; the other commodities are tangible! Gold, silver, oil, pork bellies … anyone can see, touch, feel, horde, personally own and hold any of these. Not so for ‘carbon credits.’ A carbon credit is a pound (or kilogram) that someone, somewhere didn’t emit into the atmosphere. They are totally intangible!

Last month the British authorities made several arrests related to a scheme some less-than-honest folks had undertaken to financially enrich themselves in a less-than-honest way. On August 19th the Financial Times reported:

Fraud investigators arrested nine people on Wednesday over a suspected £38m [$62.6 million] carbon credit trading scam in one of the clearest signs yet of criminals targeting international schemes to combat climate change.

More than 100 Revenue & Customs officers raided dozens of properties in the south of England over an alleged cross-border fraud to evade value added tax, just weeks after the Treasury imposed emergency rules in an effort to curb the problem.

Trading in carbon credits – allowances for companies to produce greenhouse gases – has been dogged by problems, from legal but ethically dubious practices to alleged scams involving fictitious products.

“Fictitious products” … an understatement! There are many, many reasons to defeat the Cap and Trade legislation the Dems are trying to shove down our throats. The aspect of a market without tangible assets assures an unlimited number of ways to introduce fraud. The Heritage Foundation has many articles and studies on the subject; I highly recommend you educate yourself about this most important issue.

At a minimum, Cap and Trade will keep us in this recession for years and cause more people to lose their jobs as businesses adjust their strategies in order to account for substantial increases in energy prices.