…because I’m an economist and a mom–that’s why!

Congress Says They’ll Support Energy Policy As Long As It’s Ineffective Energy Policy

March 31st, 2009 . by economistmom

It seems like a story out of “The Onion”–but it’s just CQ reporting very matter-of-factly on the Senate’s progress (or “regress”) today on the budget resolution (emphasis and some commentary added):

Sens. John Thune, R-S.D., and Barbara Boxer, D-Calif., offered competing amendments addressing the impact any climate change legislation may have on electricity and other energy costs.

Republicans charge that Obama’s cap-and-trade plan would lead to higher consumer electric and fuel bills [as it's intended to do to reduce the consumption of carbon-intensive fuels] making it, in essence, a tax.

Administration officials acknowledge the plan would cause energy bills to rise [such that the policy would achieve its intended effect] and say that is why they propose dedicating $537 billion of the revenues raised by the sale of pollution credits to a middle-class tax cut [which would mitigate the burden on middle-class households without removing the proper price signals].

Thune offered an amendment stating that any energy legislation moving later this year should achieve its goals “without increasing gasoline or energy prices.” [i.e., should achieve its goals without being structured so as to achieve its goals!]

Boxer, chairwoman of the Environment and Public Works Committee, offered what she called a “supplement” that essentially allowed a variety of ways to offset price increases that might occur because of climate change legislation. Her amendment was adopted by a largely party-line vote of 54-43.

The Thune amendment was then adopted by 89-8.

“Senator Thune’s amendment doesn’t go far enough,” Boxer said. “We believe that revenues from a climate bill, should we pass one, and I certainly hope we will, would be used to offset any kind of an increase in electricity and gasoline prices [again, removing any kind of effectiveness in the climate policy], and we would have the revenues from a cap-and-trade system to do just that.”

Thune said Boxer’s amendment was an attempt to give Democrats political cover.

“Don’t believe for a minute” that the tax rebates in Boxer’s proposal “would go back to consumers,” he said.

That’s so sad that it’s funny–or so funny that it’s sad…

2 Responses to “Congress Says They’ll Support Energy Policy As Long As It’s Ineffective Energy Policy”

  1. comment number 1 by: Jim Glass

    “As every new crisis arrives, Congress strives mightily to appear to do something about it. ”

    I think Eugene Steuerle said that.

    (Do we really want these people designing national health, and managing an ever growing portion of GDP?)

  2. comment number 2 by: John Lounsbury

    Diane - - -

    I first read this article on Seeking Alpha, but did not want to join the “lunatic fringe” by leaving a comment there.

    I think your arguments are right on target. I feel that a direct carbon tax would be better than cap-and-trade.

    1. It is explicit and not prone to being disguised in a value added manner.
    2. Since it is explicit, income tax credits can be employed to reduce the regressive nature of any energy tax.
    3. All energy sources (whether direct combustion or alternative energy) can be measured for a carbon footprint and taxed accordingly.
    4. The cost and benefits of incentives for development of alternative energy sources can be measured more effectively.

    I find it disappointing that your SA posts do not generally attract more discussion. Now that I have seen a lengthy comment stream, maybe my disappointment was ill advised.

    John Lounsbury