AMERICAN ISSUES PROJECT

Democrats know their cap and trade energy legislation will cripple the US economy. Barack Obama admitted this on the campaign trail in 2008 saying the program "would cause energy prices to skyrocket." Obama also promised an audience of supporters that cap and trade would bankrupt the coal industry. White House Budget Director Peter Orszag told George Stephanopoulos in a March 2009 interview that Obama's proposed cap and trade energy legislation would increase energy costs for everyone. Democratic Congressman John Dingell (D-MI) summed up cap and trade at a Congressional hearing on April 24th saying, "It's a Great Big Tax."

Cap and trade policies will likely cost Americans $700 to $1,400 dollars per family per year. The Department of Energy estimated GDP losses would be between $444 billion and $1.308 trillion over the 21-year period. Cap and trade also could cost the US 4 million jobs.

But that's not all.  Cap and trade would also mean a massive new national gas tax on American families and American business. Cap and trade legislation will drive up the prices of gasoline, diesel and jet fuel. Higher fuel costs will feel like a new gas tax that will hit consumers at every income level, in every state, in every field of transportation and manufacturing.

Senators Kit Bond (R-MO) and Kay Bailey Hutchison (R-TX) released a report this week on the massive new national gas tax on American families, farmers, workers and truckers as a result of the Waxman-Markey cap and trad legislation.

Combining the increased price per gallon of gasoline, diesel and jet fuel expected from climate legislation such as the Waxman-Markey bill multiplied by the amount of fuel this country is expected to use over the life of that bill has revealed the truly massive new gas tax that climate legislation will impose on the American people.

The Waxman-Markey climate legislation will impose a $3.6 trillion total gas tax that includes:

- $2.0 trillion gasoline tax on American drivers, workers and businesses
- $1.3 trillion diesel fuel tax on American truckers, farmers, workers and businesses
- $330 billion jet fuel tax on American air passengers

These figures include provisions in the legislation intended to reduce the impact of this massive new gas tax. While present, their impact is extremely modest - only 1% of the gas tax is mitigated, leaving consumers with a $3.6 trillion gas tax bill.

The Bond-Hutchison report is conservative in its numbers. Americans will likely pay much more than the 3.6 trillion dollars if Congress pushes for a 20 percent reduction in gas emissions rather than the 17 percent emissions reduction goal in the House bill.

While Senators Kerry and Boxer omitted key details necessary to determine precisely their gas tax, they do suggest even greater emissions reductions of 20% in 2020 instead of the House's 17%. This will drive up the cost of the program, energy prices and energy taxes. Additionally, there is no indication that they will expand help to mitigate fuel cost increases. Thus, the Kerry-Boxer gas tax will be even larger than the $3.6 trillion Waxman-Markey gas tax detailed in this report.

The situation will not improve with time. A study (pdf) from the George C. Marshall Institute found that the average American household could expect an estimated tax increase of $1,100 in 2008 rising to $1,437 by 2015, to $1,979 in 2030, and to $2,979 in 2050. And gas prices could rise as much as 2.58 dollars per gallon.

The studies reviewed showed electricity prices jumping 5-15% by 2015, natural gas prices up 12-50% by 2015, and gasoline prices up 9-145% by 2015. As an illustration, gasoline would suffer a 16 cent price increase per gallon at the low end of the estimates to a $2.58 penalty at the high end (using the January 2009 reported retail price of $1.78 per gallon).

Cap and trade legislation was supposedly designed to fight man-made global warming. We now know that earth's temperature peaked in 1998 and has been falling ever since. In 2008 temperatures touched 1980 levels. Today in America just 57 percent believe there is solid evidence the world is getting warmer, down 20 points in just three years. But, Barack Obama and the democrats are determined to ram their junk science tax on America anyway regardless of the facts. As a result, Americans can look forward to more government control over energy, manufacturing and transportation and a 3.6 trillion dollar tax. How's that for hope and change?

Jim Hoft is the proprietor of Gateway Pundit , a blog named one of the top 100 collective news resources at Memeorandum and listed as one of the top 100 blogs in a Carnegie Mellon University study. A million readers come to Gateway Pundit each month to read stories and news that are frequently missed by mainstream media outlets.

Posted 10-27-2009 9:28 AM

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