The Devil is in the Details: The Energy Tax Increase

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By Geoff Davis

On Feb. 26, President Barack Obama released his budget blueprint for fiscal year 2010.  The nearly $4 trillion budget was drafted to help fund the President’s ambitious plans to expand health care coverage, improve the federal commitment to education, and make the country “greener” and more energy independent.  While we all agree that these are noble goals, the devil is in the details.  As more facts about the budget proposal emerge, many Americans are beginning to realize that tackling the President’s admirable agenda will come at a significant price for our families and small businesses. 

Preserving our environment and encouraging the responsible use of energy resources are important issues that should be addressed by the President and Congress.  However, when addressing these issues, we must take into account the impact of our decisions on families and small businesses.  In his budget, President Obama proposes to lower carbon emissions by 83 percent by 2050 through a “cap and trade” energy tax that would raise $646 billion over the next decade.  This proposal would significantly increase costs for anyone who uses electricity, drives a car or relies on energy in any way.  

According to congressional testimony given last September by Peter Orszag, then-director of the nonpartisan Congressional Budget Office, “decreasing emissions would also impose costs on the economy – much of those costs will be passed along to consumers in the form of higher prices for energy and energy intensive goods.”  Orszag estimated that reducing carbon emissions by just 15 percent (nearly 70 percent less than the cut President Obama proposes) would cost the average American household an additional $1,300 in energy costs. 

The Environmental Protection Agency, Energy Information Agency and Massachusetts Institute of Technology confirm that the President’s “cap and tax” proposal could increase the  price of gasoline by $1.27, bringing the cost of a gallon to more than $3.  Last summer, we all witnessed firsthand the pain that high gas prices inflict upon our communities, families and businesses.  In the middle of our economic crisis, the government should not inflict unaffordable fuel costs on our economy.

The best way to tackle climate change is by encouraging the development of new technology that will produce cleaner energy.  We must adopt a comprehensive energy policy that will create jobs, keep our energy prices low and reduce our dependence on foreign oil.  In the short term, we must make responsible use of all our domestic resources.  Next, we must turn our focus on alternative fuels and incentives for increased efficiency and conservation.  In the long run, we must make strategic investments in energy research so that the fuels of the future are safe, clean and affordable for all Americans

Since this recession began, more than four million Americans have lost their jobs.  Almost half of these job losses occurred in the last three months.  The Heritage Foundation estimates that President Obama’s proposed energy tax could put as many as five million more jobs at risk.  Now more than ever, we need to craft policies that will spur job creation and ease the strain on families, communities and businesses.

Congressman Geoff Davis