The House Republican Conference has compiled new data that has become available since the House passed the national energy tax on June 26, 2009. The bill now awaits Senate action, where Majority Leader Harry Reid has set a September 28 deadline for committee consideration.
New Study on Effects of Cap-and-Tax: According to a new study conducted by the independent Science Applications International Corporation (SAIC), the Democrat "cap-and-tax" legislation which passed the House in June would cause GDP to be reduced by $2.2-$3.1 trillion between 2012 and 2030. Industrial production would decline beginning in 2012, and by 2030, U.S. industrial output would be reduced by up to 6.5 percent. The study also confirms that H.R. 2454 will kill American jobs, with a substantial net loss even after any new "green" jobs are taken into account. Between 2012 and 2030, total U.S. employment would be between 420,000 and 620,000 lower each year, with manufacturing jobs hardest hit. Other independent estimates have been much higher.
Energy prices would also rise according to the new study. By 2030, electricity prices would be up to 50 percent higher. Gasoline would also be more expensive, up to 26 percent higher than under the baseline forecast. Household income would decrease by up to $1,248, and Midwestern States such as Michigan, Indiana, and Kansas would see the largest income drops.
Increased Dependence on Foreign Imports: According to a new energy industry study, H.R. 2454 would reduce U.S. refining capacity by 17 percent by 2030. This reduction would require doubling imports of foreign refined fuel. The U.S. may thus end up reliant on other countries for over 19 percent of its refined fuel. U.S. refinery output would drop to 12 million barrels a day in 2030 from about 14.5 million barrels a day currently, according to the report.
CBO Predicts Billions in Bureaucracy Costs: According to the Congressional Budget Office, the costs alone of expanding government agencies to handle their new cap-and-tax regulatory responsibilities would cost about $7.5 billion over the next decade. CBO says that cap-and-tax "would require federal agencies to undertake a variety of rulemakings, conduct studies and assessments, prepare reports, and carry out other activities related to new programs authorized under the bill." In 2010, this would cost about $540 million. GAO noted in March 2009 that "the repetitive and persistent nature of the shortcomings we have observed over the years points to serious challenges for EPA to effectively implement its programs. Until it addresses these long-standing challenges, EPA is unlikely to be able to respond effectively to much larger emerging challenges, such as climate change."
Food Companies Worried over Costs: Food companies including Cargill, Tyson Foods, and General Mills are concerned they may bear a disproportionate share of the costs of cap-and-tax legislation, according to the Wall Street Journal. These costs would be passed through to consumers. The meat industry, for example, is anxious about restrictions on greenhouse gas emissions. Livestock and food companies emit greenhouse gases by using trucks to transport food and slaughterhouses which run on natural gas, for example. Other concerned groups include the Grocery Manufacturers Association, the National Turkey Federation, the American Meat Institute and the American Frozen Food Institute. According to this informal coalition, H.R. 2454 would "increase food and feed prices and reduce the international competitiveness of our businesses." The groups also criticize the House-passed bill for failing to protect low-income households which struggle with rising food prices.
Senate Committees Battle for Jurisdiction: According to press reports, the Senate Environment and Public Works (EPW) and Finance Committees are both staking claim to the distribution of emission allowances for a range of industries in that chamber's cap-and-tax bill. Majority Leader Reid reportedly wants nothing to do with a parliamentary struggle between EPW Chairwoman Barbara Boxer (D-CA) and Finance Chairman Max Baucus (D-MT). Reid is pleading with them to resolve any differences should a bill be approved for a floor vote later this year. Boxer's draft bill is expected Sept. 8. Public hearings on the legislation are expected during the week of Sept. 14, with a markup penciled in during the week of Sept. 21. Reid has set a deadline of Sept. 28 for committee action on the legislation.