Editore"s Note
Tilting at Windmills

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September 18, 2009

CAP-AND-TRADE COSTS.... For the better part of the year, conservative critics of energy reform have said a cap-and-trade policy would place too high a burden on American consumers. Republican lawmakers, in particular, insisted that the proposal would, on average, cost the typical American home an additional $3,128 a year. The claim was demonstrably ridiculous. After it was debunked, GOP leaders kept repeating it anyway.

The good news is, the right has largely curtailed use of the $3,128 figure. The bad news is, conservatives have a new number, and it's wrong, too.

CNN's Lou Dobbs, for example, said yesterday that "crap-and-trade" -- that erudite Dobbs has a way with words -- would cost "almost $1,800 a year" per U.S. household. Around the same time, Fox News' Glenn Beck said there's proof of this higher cost in Treasury Department memos, but there's been a "cover-up." Declan McCullagh, a blogger for CBS News, helped get the media clowns worked up on this, arguing that the administration suppressed reports showing that energy reform would cost consumers "$1,761 a year."

It appears the House Republican Conference is responsible for creating this lie in the first place, pushing the bogus number on Wednesday. If the right is going to keep using the number, we might as well take a moment to acknowledge reality. And in this case, as Assistant Treasury Secretary Alan Krueger explained yesterday, the $1,761 figure is nonsense.

"The reporting on the Treasury analysis is flat out wrong. Treasury's analysis is consistent with public analyses by the EIA, EPA, and CBO, 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. It is time for an honest debate about how to solve a long-term challenge and deliver comprehensive energy reform - not for misrepresentations of the facts."

Media Matters also did some helpful fact-checking.

Numerous conservative media figures have seized on outdated Treasury Department memos obtained September 11 by the Competitive Enterprise Institute (CEI) to falsely suggest that the Obama administration estimates that cap-and-trade legislation recently passed by the House of Representatives would cost up to $200 billion per year or $1,761 per household, and that, in Sean Hannity's words, "they didn't tell you the truth." However, the Treasury memos do not address the current House climate change bill but, rather, a proposal that would auction 100 percent of the emissions allowances; the bill under consideration spends revenue created by the program to offset costs to households and businesses.

The numbers found in the Treasury memos scrutinize a specific proposal -- that bears no resemblance to the proposed legislation. The League of Conservation Voters' Navin Nayak argued this is like "pricing the health care bills currently in front of Congress based on a single-payer system."

So, if the conservative claims are patently false, what are the actual costs associated with the Democrats' cap-and-trade proposal? According to the Congressional Budget Office, which Republicans occasionally listens to, the average would be about $175 per household -- about the price of a postage stamp per day.

Dobbs, Beck, McCullagh, and the House Republican Conference, in other words, were only off by a factor of 10.

Steve Benen 10:00 AM Permalink | Trackbacks | Comments (13)

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sure glad the majority party is doing as good a job pushing that energy bill (which really does little as an environmental bill) as they are at gettin' us that universal health care reform.

it's so nice living in a country of lucid, reasonable, fact-related dialogue, debate and discourse. such a pleasure...

Posted by: neill on September 18, 2009 at 10:04 AM | PERMALINK

Actually, it's like pricing the healthcare bill without including any of the taxes that will be used to pay for it or any of the savings that people will see. Which is pretty much exactly what the CBO has been doing with these bullsh*t $800-billion and up price tags.

Posted by: paul on September 18, 2009 at 10:13 AM | PERMALINK

Dobbs, Beck, McCullagh, and the House Republican Conference, in other words, were only off by a factor of 10.

Hey, for followers of the Church of Supply-side Economics that's like hitting the center ring of the bullseye. Usually their economic predictions are off by a factor of 100 or more.

Remember, they promised that Bush's budgets (which Congress passed with less than two percent difference from the original proposals) would cut the deficit in half.

Posted by: SteveT on September 18, 2009 at 10:30 AM | PERMALINK

The Dems are playing Whack a Mole with the Reps, and it's a no win exercise; all the Right has to do is throw up a nonsensical number or acusation- sound bite size- and the Left has to (First) reseach the statement, and (Second) write a long, eyes glazing over, rebuttal.

Meanwhile, the Right has moved on to the next Big Lie.

Shades of Dick Tuck, Nixon's dirty trickster. . .

Posted by: DAY on September 18, 2009 at 10:33 AM | PERMALINK

It should be possible to make a pollution tax not only cost most people nothing, but even yield payments for most people.

The core idea behind a pollution tax is that air and water are not free, that the government should use a tax to fix the externality and return the money to the people in ways that pay for the damage.

Right now, people are not getting any payments for the damage from those doing the damage. So, a few people are able to pollute at no cost while the costs are distributed. A pollution tax, if done properly, charges the few polluters for the damage and returns the funds to the rest of us (most likely by using the revenue to lower our other taxes).

Cap-and-trade essentially conceals a pollution tax in its complexity. The argument for a cap-and-trade over a more straightforward pollution tax revolves around the claim that it is more politically expedient to hide the tax, but that lack of transparency is also what allows opponents to make these kinds of silly attacks on the value for the average American. We would be better off with a more easily understood pollution tax.

Posted by: Greg on September 18, 2009 at 10:45 AM | PERMALINK

"about the price of a postage stamp per day."

I like the use of the USPS as a comparison. We all should buy that stamp a day to help out. But the problem with the $175 a year cost is that it is the cost after rebates from the government. The cbo estimates the gross cost to be $800 a year. So first they take away $800 and then give me back $625. So do I have to buy like 5 stamps a day and the take them back to the post office at the end of the year for my rebate?

Posted by: TruthPolitik on September 18, 2009 at 10:52 AM | PERMALINK

Dobbs, Beck, McCullagh, and the House Republican Conference, in other words, were only off by a factor of 10.

Hey, that's closer than they were on the Teabagging Party crowd estimates!

Posted by: low-tech cyclist on September 18, 2009 at 10:53 AM | PERMALINK

Nothing is going to happen on this until health care gets resolved one way or the other, so for now we're talking about moot points. Since we're talking, though, let me remind people that at the beginning of this year cap-and-trade advocates were turning up their noses at lying extremist Republicans claiming that taxes would go up if we tried to address climate change -- because everyone knew that that under cap-and-trade proposals circulating before this Congress convened, emission credits would all be auctioned.

On the merits, this would have been the way to go, if we had to have a cap-and-trade system. Restrictions on carbon emissions means reduced energy usage, and reduced energy usage would be very difficult for some Americans -- people with lower incomes and longer commutes, industries like agriculture and so forth. To cushion the blow to these people a source of revenue would be required; that's what the allowance auction was supposed to provide.

Of course this idea lasted about 15 minutes in Congress. And it isn't the best way to address climate change and related problems (the trade deficit, dependency on foreign oil, etc.) anyway. The bottom line is that a program to reduce carbon emissions that doesn't cost anyone anything won't accomplish its objective. If you want lower carbon emissions, you need reduced energy usage; to get reduced energy usage, you need higher energy prices. Specifically, you need higher energy taxes.

Yes, I know this is an unpopular idea. Painless solutions to difficult problems are attractive to politicians for the obvious reason that they are attractive to voters, but they won't work in health care and they won't work on energy.

Posted by: Zathras on September 18, 2009 at 10:55 AM | PERMALINK

I just can't see how this cap & trade won't end up being like the game where the suckers have to guess which of 3 shells has the pea underneath.

Ya know what I mean, the Shell Game, first cousin to 3 Card Monte.

For a perfect solution, just outlaw environmentally destructive extraction methods, end all fossil fuel related tax breaks & subsidies, and burn down K street.

Posted by: cwolf on September 18, 2009 at 11:08 AM | PERMALINK

You realize that this is far too complicated for most Americans to understand. What they do understand is, "CRAP AND TRADE IS GOING TO DESTROY YOUR FAMILY!!!"

Posted by: Speed on September 18, 2009 at 11:48 AM | PERMALINK

Beck showed a graphic of what purported to be the Treaury document this story is about, w/ a big, bright red "Confidential" stamp at the top. In fact it was not the (much more boring-looking) actual document; it evidently was something the Fox graphics people just made up to further the idea of a "cover-up." Do they do this kind of thing often?

Posted by: K on September 18, 2009 at 11:53 AM | PERMALINK

Too complicated? How about, "We'll lower your payroll taxes by taxing polluters. More money in your paycheck each month, no more free ride for those polluters."

Then you lower the Medicare payroll tax by the amount of the spending you save from dropping all subsidies to polluting industries and revenue you gain from a substantial tax on polluting industries.

What is so complicated about that?

Posted by: Greg on September 18, 2009 at 11:56 AM | PERMALINK

Ken Ward Jr. from the Charleston Gazette sets the record straight with actual facts: http://tinyurl.com/l9onfj

Posted by: Wayne on September 18, 2009 at 12:04 PM | PERMALINK



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