Study: Modest Cost Hikes From Climate Bill

Congressional Budget Office Reports That Proposed Bill Would Increase Household Costs By $175

(AP)  A nonpartisan congressional study projects only modest household cost increases as a result of a Democratic proposal to limit carbon dioxide and other greenhouse gases, contradicting claims by many Republican lawmakers that the climate legislation amounts to a huge energy tax on average Americans.

The Congressional Budget Office report estimates that the proposed limits on greenhouse gases required by the House bill would produce a net additional cost to the economy of $22 billion a year by 2020, or an average cost per household of $175 after various cost-saving measures included in the bill are taken into account.

The poorest households actually would save $40 a year while those in the highest income category would face a net increase of $245 a year, the report estimates.

The findings contrast sharply with cost projections - some as high as $3,100 per household - use by many Republicans including House Republican leader John Boehner of Ohio who repeatedly has blasted the Democrat's climate legislation as economically devastating to average Americans.

"This analysis underscores that this legislation is effective and affordable," Rep. Henry Waxman, D-Calif., one of the climate bill's chief sponsors, said Monday.

Rep. Edward Markey, D-Mass., also a leading co-sponsor, compared the cost to "a postage stamp a day" and not the economic catastrophe suggested by the bill's opponents.

The CBO study was released as House Speaker Nancy Pelosi, D-Calif., struggled to get broader support for the bill from farm-state Democrats, who have been trying to get changes in the legislation to ease the cost burden on farmers and people in rural areas of the country who under the bill may face higher electricity costs than those in urban centers.

These essential compromises have yet to be worked out, leaving in doubt Pelosi's goal to bring the climate legislation up for a vote by week's end before lawmakers depart for the July 4 holiday recess.

The bill, covering nearly 1,000 pages, calls for a 17 percent reduction in carbon dioxide and other greenhouse gases by 2020 from 2005 levels, and an 83 percent reduction by mid-century. Carbon dioxide, produced from burning fossil fuels, especially coal, is the leading manmade greenhouse gas linked to global warming.

The reductions would be made by capping emissions on key polluting sources - coal burning power plants, refineries, factories and from motor vehicles, forcing a shift to cleaner energy and more conservation. The polluters would be provided emission permits with the cap declining each year. Some 85 percent of the permits would be given away, especially to energy intensive sectors of the economy. But others would be sold by the government and proceeds used to help people meet higher energy costs.

The CBO study focuses on costs that would occur in 2020 when the economy would be expected to have adjusted to the change imposed by putting a price on carbon pollution.

Republicans, responding to the study, said the report acknowledges that people will face higher energy costs.

"This analysis shows average American household would pay $770 more per year with costs reaching as high as $1,380 per year," said Rep. Dave Camp of Michigan, the ranking Republican on the Ways and Means Committee who had requested the report. He referred in a statement to "gross" cost figures in the report that do not take into account what the CBO analysis said the bill provides for cost savings and offsets.

Camp's spokesman, Sage Eastman, said the report also "ignores the transitional costs, the negative impact of jobs and earnings during the transitional period" before 2020.

The CBO study said the aggregate most of the costs of the cap on greenhouse gases "would be offset by income and other benefits provided to households" under the bill.

The overall annual cost of compliance with the emissions reductions before any offsets, credits or rebates was projected by CBO to be $110 billion in 2020, or about $890 per household. But the report said $85 billion "would flow back to U.S. households in the form of direct relief and indirectly through allocations to businesses and governments" with an additional net benefit of $2.7 billion as a result of other provisions.

[mjvwsr]

"The poorest households actually would save $40 a year"

guess this means the rest of us are giving the non achievers more

[skyk-2009]

The Confederate Party is LYING to us? Trying to Scare us into no change? No! Say it isn't so!! LOL

[mnbrant]

Hmm I drove 26k miles last year. Lets see how much this is gonna cost me. Lets say I get 26 miles to the gallon which is close. And if the tax will be an additional 30 cents a gallon. I would be paying 300 bucks more than everyone else. Then I probably would pay another 100 bucks for green energy on my electric and gas bill. I make 10.85 an hour and can't afford this tax. I really really really don't have another 35 bucks a month to give. I won't bore you with the details.

[cbs4111]

Read the analysis at

http://www.cbo.gov/ftpdocs/103xx/doc10327/06-19-CapAndTradeCosts.pdf

The analysis doesn't account for the costs that will be incurred between now and 2020 - virtually all of the upfront costs of shifting energy supply away from fossil fuels. Following this report's methodology, a Mercedes costs about the same to own as a Hyundai - true, if you don't count the cost of purchasing the car.

This report is complete and utter nonsense - it seems that the CBO is bowing to political pressures to support this carbon cap and trade tax. The carbon cap and trade is being sold as Kool-Aid for global warming, which it won't affect in the least, it's really just another tax. Sorry Obama, we're not drinking this Kool-Aid.

By the way, did CBS report that Arizona has just broken their record for the longest string of below 100 degree days in June since 1913?

[skyk-2009]

Do you have any evidence what so ever that the CBO account isn't factual? I sense that your greed is tied, in some way, to your bashing of the report. The nation doesn't matter, the future doesn't matter, nothing matters to you but YOU and YOUR greed? Sad, very sad!

[mrzerato]

I smell a tin hat award coming for this conspiracy theory. Do you have any evidence the CBO is bowing to the pressure of the congress, or are the voices in the head misleading you again?

[FauxNews]

Only a modest tax that will increase modestly every year.

[skyk-2009]

I'd suppose you prefer being blackmailed by Leaders in the Middle East? You folks have never been that smart to begin with but IF we do not develop new and renewable energy our children will most certainly PAY and it will NOT be any "modest" amount, that's for sure.

[speakinup22]

Like anything we are doing is going to change the climate. To put it into perspective, if you were to create a scale the size of a football field (100 yards for you folks in Europe), the total amount of CO2 that man creates would not get off the hash mark at the goal line. It would be LESS than the width of a pencil.

But hey good ole Al Gore has sure got the rabble roused up, doesn't he ?

[speakinup22]

And, BTW, I do believe in global warming. It is just that I don't believe we can do anything significant about it. I believe it is a natural occurance that is going to happen if we like it or not.

Rather than spending $175 a household to combat it, we'd be better off planting a tree.

See, the problem is, Libs think bigger government is the way to solve all problems, when in fact, it just creates MORE problems than it solves. Al Gore - case in point.

[skyk-2009]

One think is certain! If we continue to listen to people like you NOTHING will get done. No job we, as American's, have tackled has been easy but we've always gotten it done. I have a lot of faith in America and it's people... I BELIEVE they can and will get it done.

[impeachbhb]

We would not need to do anything if Al would turn off some tv's, computes, and lights in his Nashville mansion. Talks the talk but expects everyone but him to do the walk.