NTF Issue Paper: cong100.doc.  7-09.





BACKGROUND.  President Obama wants to seat us all in “clown cars,” force us to trade in our safe SUVs for tax credits for rolling coffins.  Not content with wanting to confiscate our guns; now he wants to outlaw our SUVs, so stockpile the ones you own.  Obama minions in Congress, Rep. Henry Waxman (CA.) & Ed Markey (Mass.) introduced HR 2454, to establish a system to curtail carbon dioxide and 5 other greenhouse gas emissions.  Their bill seeks a 17% reduction in those emissions by 2020 and an 83% curtailment by 2050, to stop a global warming phenomenon that reputable scientists discount. The EPA, for the first time in our history, declared carbon dioxide a pollutant, though most in the scientific community scoff at such labeling. 


WAX & TAX.  The Obama Administration proposes to raise average vehicle mileage standards to 35.5 mpg by 2016.  His restrictive anti-pollution proposals would add an average of $1,900 to the price of a new vehicle.  As people drive smaller cars and use less gas, they would pay less federal gas tax, so Obama wants to raise the gas tax higher.  He cares not if we are less dependent upon foreign oil; he only wants to raise our taxes.  Thus, drivers of clown cars will save no money at the gas pump.  More car manufacturers may fail if consumers balk.  The new standards will make us less safe while traveling.  Smaller vehicles added 46,000 dead in car accidents between 1975-1999.  The batteries in hybrid cars loved by Obama are prohibitively expensive to repair, up to $1,000, and expensive to insure. Forcing efficiencies on business without cost-benefit calculations include harsh requirements for low-carbon vehicle fuels and a 1000% increase in production of electricity from renewable sources, something probably impossible.  The EPA itself determined that these offsets do not exist near the level envisioned by the bill.  The bill forces mandates on the economy that might not appear the most efficient and cheapest means to cut CO2 emissions.  The EPA could regulate everything that emits CO2.  Sponsors want to model each state on California energy initiatives.  Californians pay the 2nd highest commercial energy costs in the nation.  The state is the largest importer of energy of all states.  Every refinery and other company will earn the right to pollute, government selling permits to them.  Jobs will disappear, as corporations dig for anti-pollution funding.  The bill would allow emitters that pollute less to sell permits to others.  Emissions standards continually will become more restrictive, fewer companies selling permits, causing other companies to close plants and lay off workers. Increased energy production costs will pass along to consumers.  All these socialist endeavors would drop the earth temperature by only a few tenths of a degree.  The EPA would direct our energy industry.  25% of power by 2025 must come from unreliable renewable energy sources.  The bill decrees mandatory environmental energy audits on every house sold, inspections of heating and air conditioning systems, windows, doors, vents, etc. 

WHO BENEFITS.  Investment banks, hedge funds, and other speculators could participate in peddling permits and make profitable commissions.  12 new advisory boards and other committees would provide succulent salaries for bureaucrats.  Auctioning off emissions permits would produce hundreds of billions in new fed revenue, because most companies must buy permits to comply with new regs. Pres. Obama would gain his $650 billion budgeted for green energy and tax rebates from selling emissions permits to companies that emit supposedly polluting gases.  First-year permits would total about $55 billion.   20% of the revenue will pay for new investments in green technology, so far not proved to solve our energy requirements. Subsidies for appliances and vehicles, whose prototypes have disappointed consumers.  $3500 to $4500 cash payments to those who trade in old gas guzzling clunkers for new hybrids that fail to meet their advertised specifications. Those unemployed will see 80% of their insurance premiums paid, a $1,500 relocation allowance, unemployment benefits, all for 3 yrs., job training, and job search expenses up to $1,500.[1]  Only the rest of us must pay taxes on our unemployment benefits.  Red China supports this bill, because the legislation would cripple our economic engine and help make China a stronger superpower.  Remember that it owns a huge amount of our national debt.  Red China naturally contemplates no similar legislation and has stated so publicly, though Congressional Democrats requested such.   Waxman-Markey seems perfectly designed to buy and sell political support through the granting of valuable emissions permits to favored industries that contribute campaign $$ and specific congressional districts.  Such precisely is occurring now in the House, where proponents use such concessions to assemble a liberal majority to pass a strangling bill.  The bill would patronize OPEC, because we would import more oil as our refineries close because of burdensome regulations. 

WHO PAYS.  Consumers would pay more twice, once to subsidize emission permits and secondly in utility bills for building new low-carbon power plants and costly and sporadically-operating wind farms or for renovating existing plants.  Coal-dependent utilities must buy over 50% of their permits as the plan starts in 2012.  The energy/utility industry already suffers restrictive regulation and would have to invest huge amounts of capital in long-term renovations. A disproportio- nate negative expense will hit consumers, businesses, and producers of gas, diesel fuel, jet fuel, crude oil, and natural gas.  The bill will weaken our national energy and economic security.  Yearly net job elimination will reach 2.7 million.  The average Nebraska family will pay an additional $1,500 annually for energy, 74% more for natural gas.  Pump prices will reach $4 per gallon again.[2]  The Congressional Budget Office director testified that a 15% slash in emissions would raise average household energy costs by $1,600 annually.  The National Black Chamber of Commerce hired CRA International, a think tank and consulting business, to conduct a study to determine the impact of this bill.  This analysis found that it would reduce national GDP by $350 billion, cut net jobs by 2.5 million, including accounting for new jobs in the clean energy field, reduce earnings for the average American worker by $4,309 yearly, and offer miniscule changes in CO2 emissions, because other nations like China and India will continue to pollute prolifically.  Bill sponsors evidently realize the loss of jobs, because the bill offers 3 yrs. of salary and health insurance and relocation costs to workers unemployed by their legislation.[3]  By 2035, GDP losses would total $9.6 trillion, according to the Heritage Foundation, with 1.1 million job losses.  Electricity rates would rise 90% after inflation adjustment, residential natural gas prices by 55%.  The federal debt would spiral by 26%.  The bill imposes a huge burden on people in states that utilize much coal or produce much electricity. No solution about how to deal with emissions across our two borders.  An affront to Obama, several Democrat congressmen from coal and oil-producing states oppose this bill, because their constituents could not meet bill mandates for pollution controls and renewable power generation.  An economist with the Cato Institute declared this bill the most anti-consumer legislation facing Congress.  Energy would become scarcer and more expensive and increase the cost of all goods and services that use energy while produced.  Higher prices translate into lower standards of living for American consumers.  Our goods would become less marketable overseas compared to competing nations that are expanding their energy sectors rather than restricting them.[4]   European corporations have transferred manufacturing jobs to the U.S. for several years because of onerous energy taxes at home.  They will move plants to Asia, costing more jobs, if Obama prevails. Steel and aluminum jobs will disappear.  Heavy industry will migrate to Malaysia or Brazil.  Red China and India are the most prolific emitters of CO2 in the world and repeatedly warn that they will not reduce emissions; their increased output would offset all sacrifices made in the U.S.  This legislation would threaten retirements of millions holding mutual funds, pensions, and other retirement investments in U.S. energy companies. After non-carbon energy sources cannot replace fossil fuels quickly enough, energy prices will rise as income and employment decrease. Obama wants energy prices to skyrocket, so that consumers will reduce energy use.  Even if a family of 4 reduces its electricity use by 36%, its electric bill will be $754 more each future year.  Higher gas prices might force a family to cut consumption by 15%, but a family of 4 still will pay $596 more per year.  Another source cites $3,000 annually in taxes per family.  The next generation will inherit a fed debt of an additional $29,150 per person, or 26%.[5]  Grocery store electric and refrigeration costs will rise, passed onto us.  Buy extra blankets for winter now while prices are still low.  Fed bureaucrats would mandate new building codes and new energy regs on light bulbs and other lighting.  Citizens will be unable to repair old appliances under the new statutes but must buy new ones that meet energy guidelines. 


NE AGRICULTURE HIT.  The legislation, in severely limiting the production of greenhouse gas emissions, would harm NE cattle ranchers and farmers, because cattle constitute a major producer of methane gas.  Farm groups and rural congressmen fear that Obama would raise energy prices and boost the price of fertilizer, farm machinery fuel, and other farm necessities.  His legislation would encourage overseas ag operations.  Conservative Rep. Steve King (IA.) cited a Heritage Foundation study that predicted a loss in farm income under the Obama plan. 


LOCAL ADVERSITY.  Passage of HR 2454 would greatly increase the cost of electricity for OPPD customers in Nebraska.  Although bill sponsors seek to control carbon output, no commercially available equipment for carbon reduction or control now exists.  If and when it is marketable, OPPD customers must pay the cost of purchasing and operating the equipment, totaling hundreds of millions.  Our electric bills would skyrocket higher, because the bill would force OPPD to build or buy a minimum percentage of its electricity from more costly renewable generation sources like wind and solar power, though the utility may not need such supply.  Other unfunded federal mandates would raise our rates, like building public recharging stations for electric cars.  OPPD estimates demonstrate that the bill would add 25% to electric bills by 2012, 97% by 2030.  The average residential customer would pay about $250 more annually by 2012 and about $1,000 more by 2030, figures not adjusted for inflation.   Advertisement 


CONSERVATIVE ALTERNATIVES.  Permit American energy corporations to drill for oil and gas on land here and in the Continental Shelf offshore, where drilling could provide an additional 3 million barrels of oil daily and 76 trillion cubic feet of natural gas.  Coastal states would determine allowance of energy development within 100 mi. of coastlines and win a share of receipts from such development.  Open the Arctic coastal plain to energy exploration, providing an additional 1 million barrels of oil daily.  Lease oil shale resources, which could offer an additional 2.5 million barrels of oil daily.  Quickly process permit applications for refinery construction.  Allow the federal government to obtain advance alternative fuels derived from oil shale, tar sands, and coal-to-liquid technology.  Lift restrictions on nuclear power construction.  Accelerate depreciation for new nuclear plants and commit to nuclear recycling.  Offer tax credits for manufactured nuclear equipment.  Fund pilot projects around the nation to retrofit current power plants. All current power-generating facilities would have grandfathered rights to continue operating. Encourage investment in and construction of clean coal-fired plants.  Plants that exceed more moderate standards would receive accelerated depreciation.  State governors would determine compliance standards for utilities, to avoid raising electricity costs.   Amend the bureaucratic EPA designation of air pollutant to exclude carbon dioxide, water vapor, and several other gases.  Tax credits for homeowner energy audits and smart meters.  Create federal transmission siting authority to expand and update our national grid.  Focus on reforestation. 


TAKE ACTION NOW.  Read Liberty & Tyranny, by Mark Levin, which explains the negative impact on our lives from the Obama energy policy.  Also read Red Hot Lies, by Chris Horner, about the global warming farce. We are in the midst of a global cooling period, according to scientists.   See the Heritage Foundation web site at www.heritage.org.  These national energy taxes and regulations constitute socialist control of our economy.  They will hurt middle class Americans badly.  We should have the freedom to purchase whatever vehicle we want.  Rep. Lee Terry called the bill government extortion, Cong. Fortenberry, believes that the bill will not reduce emissions but weaken our manufacturing and ag economies, and Rep. Smith predicts that ratepayers will pay dearly for electricity.  All voted NO on the bill.  Contact your 2 senators today to vote NO on the bill and your representative to vote NO when it returns from conference committee!  Meanwhile, write a guest editorial to your local newspaper.


Research, analysis, and documentation for this issue paper done by Nebraska Taxpayers for Freedom.  This material copyrighted by Nebraska Taxpayers for Freedom, with express prior permission granted for its use by Citizens for Local Control, Cherry County Taxpayers, Dawes County Taxpayers, and other groups in the Tax Freedom Network.  7-09.  C


[1] Washington Examiner, 5-22-09.

[2] American Petroleum Institute statement on Waxman-Markey Bill, 5-21-09.

[3] Heritage Foundation, Son of Waxman-Markey, by William Beach, et.al., 5-18-09.

[4] Kevin Mooney, Examiner Reporter, 4-23-09.

[5] Heritage Foundation, Son of Waxman-Markey, by William Beach, et. al.,  5-18-09.