Christian Action Commission

Analysis: ‘Cap and Tax’ Schemers Are Cutting Deals

As the nation tries to pull itself out of financial hard times, some legislators in Washington are eagerly pushing a plan destined to further escalate the economic downturn. Their proposal: reining in carbon emissions with a sweeping global warming bill that would create a tremendous tax burden for businesses, large and small, and every American who turns on a light switch or consumes any product.

Following weeks of negotiations, Reps. Henry Waxman (D-CA) and Ed Markey (D-MA) cut a deal Friday with several colleagues on a bill to ration energy use with a cap-and-trade system. The American Clean Energy and Security Act of 2009 (H.R. 2454), as it is titled, is the centerpiece of debate this week in Rep. Waxman’s House Energy and Commerce Committee. The congressman is making every effort to reach committee passage of the bill this week.

Under the 932-page measure, industries would be restricted to a specified amount of greenhouse gases and other carbon emissions they could emit. That is the “cap.” The “trade” refers to the buying and selling of carbon allowances. Companies that exceed their allotted emissions would purchase credits from companies that have not used all their credits. Controlling this massive web of regulation would be the U.S. government, positioned to take in trillions of dollars in revenue.

The proposed cap-and-trade system is nothing more than one of the largest tax schemes in history. Rep. John Dingell (D-MI), one of many lawmakers from coal-dependent states who have been uneasy about rushing through global warming legislation, described it best: “[C]ap-and-trade is a tax, and it’s a great big one.” Ultimately, consumers would be hit with the costs leveled on energy and manufacturing sectors. As President Barack Obama, a cap and trade proponent, said earlier this year of his similar plan: “[E]lectricity rates would necessarily skyrocket…that will cost money. [Industries] will pass that money on to consumers….”

An analysis released recently by the non-partisan Congressional Budget Office found that American families could face, on average, an additional $1,600 in energy and consumer product costs each year, and an MIT study suggests such costs could surpass $3,000.

Support for such a plan has been met with resistance on Capitol Hill. Lawmakers from states heavily dependent on fossil fuels for jobs and energy know well the potential economic devastation under such a bill. To garner support, Reps. Waxman and Markey are trying to buy votes by creating favored businesses, which results in a discriminating system where government favors some businesses and not others, further indication of a failed policy. This creates an even greater likelihood that Congress will pass a bill with the ultimate effect of greater hardship for the American people. One concession in the deal, for example, is a cut in the cap on emissions reductions from 20 percent to 17 percent by 2020. Whatever the mandated cap, the effect will be the same: higher energy prices, loss of jobs to nations like China, and government strangulation of the U.S. market.

At its core, the cap-and-tax plan would yield massive economic pain with little, if any, environmental gain. We can ill afford for Congress to ram through such policies that could collapse our economy and imperil the already impoverished.

If you agree, please tell your representative and senators to oppose the American Clean Energy and Security Act or any bill that would ration energy use with a cap-and-tax system.

This article is reprinted with permission from The Ethics & Religious Liberty Commission.