Regulations Are Hidden Tax on Energy
It’s a good thing Congress is increasing the amount of money it spends to help the poor pay for energy, because these same legislators are about to send energy costs through the roof.
The federal Low Income Home Energy Assistance Program provides $1.7 billion a year to the states, which is then distributed to low-income households unable to pay their heating or air-conditioning bills. Though the stated purpose is laudable–ensuring that the poor don’t suffer from winter cold or summer heat–the program has the same drawbacks as other federal entitlement programs. Some of the money gets wasted, and some goes to undeserving recipients. And, in any event, there probably are better ways of addressing the problem.
Nonetheless, the energy assistance program remains popular in Washington, and a provision in Congress’ pending energy bill seeks to double the available tax dollars to $3.4 billion per year.
But at the same time the feds are trying to help poor people pay their energy costs, they are also part of the reason energy became so unaffordable in the first place. Environmental regulations act as a big hidden tax on energy, and if some in Congress get their way, these costs are going to balloon in the years ahead. For example, the very same energy legislation that contains the energy assistance increase may also mandate politically correct but expensive wind and solar energy. If this amendment is added to the final bill, it will almost certainly increase electricity costs. Other measures, such as the John McCain (R-Ariz.) and Joe Lieberman (D-Conn.) global warming proposal, would effectively set limits on the use of coal and other fossil fuels. According to the Department of Energy, this measure would add $444 to average annual household energy expenditures when the provisions are fully implemented.
If these and other anti-energy measures become law, many more low-income households will be in need of energy assistance handouts. Even $3.4 billion a year won’t be enough. And for the rest of us, who would both have to pay for the assistance and for higher energy costs, it would be a double whammy.
The logic behind the energy assistance program is that the federal government has an obligation to make the benefits of energy available to every household. But if Congress really believes in the need to make energy affordable, it should stop doing so many things that take us in the opposite direction.