Late yesterday afternoon, two interesting tweets came across the official Roy Blunt feed:
- CBS reports the Obama Admin privately concluded cap & trade could cost families $1,761 a year. Same as a 15% personal income tax increase.
- The cap & trade analysis was requested by @ceidotorg Here's the CBS News report: tinyurl.com/n5dbcf
The numbers and article Blunt cites are based on documents provided by the Treasury Department to the conservative Competitive Enterprise Institute, which then alleges that Barack Obama and Democratic leaders are hiding the true cost of the Waxman-Markey cap and trade legislation now before the Senate.
There's just one problem: the numbers put forward by CEI, Blunt and a growing chorus of conservatives were for a proposal that isn't being considered by Congress.
- First, the Treasury documents reflect a cap and trade system that would auction off all of the available carbon credits. The bill passed by the House auctions off only 15% of credits, which obviously means that there will be far less revenue generated by the auction.
- Second, the Treasury analysis "does not account for provisions in a cap-and-trade policy that would return all or part of those auction revenues to consumers." The House bill "invests a significant amount of money generated by the legislation into programs to lower costs for consumers and rebates."
Plus, the Waxman-Markey bill is expected to undergo even more changes in the Senate, making this $1,761 estimate even less relevant.
The Washington Post has more:
But environmental organizations fired back that [CBS News blogger Declan] McCullagh and the CEI were making two key false assumptions. In the auction plan initially proposed by President Obama, revenue from cap-and-trade allowances would have been used to cut taxes. Many economists, including those who are Republican, have argued that using such revenue to cut payroll taxes would be good for the economy. Second, the plan in the March Treasury memo is not the one being debated in Congress.
"Even if a 100 percent auction was a live legislative proposal, which it's not, that math ignores the redistribution of revenue back to consumers," said Tony Kreindler, spokesman for the Environmental Defense Fund. "It only looks at one side of the balance sheet. It would only be true if you think the administration was going to pile all the cash on the White House lawn and set it on fire."
...The Treasury said the furor was much ado about little. The March memo was not based on any independent Treasury analysis and summarized other studies. The transition team memo said that the government could use the revenue to "offset distortionary taxes on labor or capital."
"The reporting on the Treasury analysis is flat out wrong," said Alan B. Krueger, Treasury assistant secretary for economic policy. "Treasury's analysis is consistent with public analyses . . . and the reporting and blogging on this issue ignores the fact that the revenue raised from emission permits would be returned to consumers under both administration and legislative proposals."
For those interested in more reasonable estimates about the legislation actually under consideration, here are a few. Again, from the Washington Independent:
- The Energy Information Administration found that the House bill would increase household costs about $83 per year.
- The Environmental Protection Agency put the cost slightly higher, at between $88 and $140 per household per year
- The Congressional Budget Office estimated about $175 a year by 2020.
But Blunt and others aren't interested in honest estimates, of course. They just want big numbers, and are more than willing to distract Missourians with bogus information to gin up the opposition to the bill.