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The House votes this week on the American Clean Energy and Security Act—which claims to be about slowing global warming, but in fact is a massive tax hike that would vastly expand the federal government’s power over the economy.
Indeed, the Waxman-Markey bill (as it’s commonly called, after its two chief sponsors) would be the largest tax increase in world history, as well as transfer vast wealth from consumers to big-business special interests.
And it would put Washington in charge of people’s lives in a way not seen since the Second World War—which was the last time Americans needed ration coupons to buy gasoline, food and other commodities.
The core of the complex 1,201-page bill is what’s called a “cap and trade” system. This would put a cap or limit on greenhouse-gas emissions—mainly on carbon dioxide produced by burning coal, oil and natural gas, three fuels that provide more than 80 percent of America’s energy. And the law lowers the cap every few years—ordering emissions to drop 17 percent below 2005 levels by 2020 and 83 percent below by 2050.
The “trade” part of the scheme would let companies buy and sell the government-issued ration coupons. Thus, a business closing down a factory and moving overseas could sell its no-longer-needed coupons to a firm that’s still trying to stay in business.
Cap-and-trade backers tell us that it’s a reasonable, effective way of replacing fossil fuels with renewable energy sources and higher energy efficiency. But it’s proving anything but reasonable or effective in the European Union, which started a similar scheme several years ago. The prices of ration coupons have fluctuated wildly, electric rates have risen steeply and emissions haven’t gone down (at least not until businesses began curtailing production in this recession).
But even if it produced the promised results, cap-and-trade wouldn’t be worth it.
For starters, the bill’s sneaky, indirect tax is still a tax—and a huge one. This would vastly increase fossil-fuel prices—which would make greens happy by making higher-priced alternatives such as wind power competitive, but would make Americans as a whole miserable, by forcing us to use less energy and pay much more for it.
Realize, too, that almost every recession of the last 60 years, including today’s mess, has followed a sharp rise in energy prices. Why would we want lawmakers to mandate a recession?
Understandably, Waxman-Markey’s supporters pretend the bill’s impact won’t be too severe. But independent economic studies have estimated the costs from $1,500 to more than $3,000 per year for the average family.
Then, this week, the Congressional Budget Office released an estimate of just $175 a year per family—then dropped it to $80. Green groups crowed—but no one really believes that number.
Certainly, the bill’s supporters in Congress don’t. If they did, these Democrats wouldn’t have voted down Republican amendments to the measure that would have suspended cap-and-trade if gasoline hit $5 a gallon, electricity prices doubled or unemployment topped 15 percent.
For that matter, similar government policies in Britain are already costing families $1,200 a year—and that’s in just the early stages.
During last year’s campaign, Sen. Barack Obama acknowledged: “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.”
And the Obama plan was less pernicious than Waxman-Markey. It would at least auction off the ration coupons, giving the federal government revenues that could fund programs or reduce the debt. Waxman-Markey gives away 85 percent of the ration coupons to big corporations. So while American consumers are stuck with ever rising energy prices, special interests will make enormous windfall profits.
If Waxman-Markey is to be defeated, the American people are going to have to shout loud enough that their representatives can hear them over the corporate CEOs guffawing about the stupendous payoff being paid them by the Democrats in Congress.