Even as the Democrats’ much-hyped “Recovery Summer” continues to demonstrably fizzle, the Obama administration and Democrats on Capitol Hill are intent on killing American jobs through misguided energy policies. Below are a few of the ways Democrats have or plan to hamstring job creation in the U.S.:
Higher Taxes on American Energy: Washington Democrats have not been coy about their desire to tax American energy, which would undermine the nation’s anemic economic recovery and send jobs overseas. President Obama’s climate czar, Carol Browner, floated the prospect of Congress voting to approve climate change legislation—a national energy tax—during a lame-duck session after the November 2, 2010 elections. Labor unions and well-heeled environmentalists are now stepping up lobbying efforts across the country to push for a lame-duck national energy tax bill. So what exactly do Americans have to look forward to in a lame-duck national energy tax? According to an analysis by the Heritage Foundation, a bill similar to the House-approved cap-and-tax legislation would cause the following negative consequences:
Just before leaving town for the August district work period, House Democrats voted to approve the CLEAR Act. The CLEAR Act would increase the cost of energy, increase dependence on unstable sources of foreign oil, and kill thousands of American jobs, according to IHS Global Insight. It imposes new taxes on oil and natural gas produced domestically on all federal drilling leases. The tax would be $2 per barrel of oil and 20 cents per million British thermal units of natural gas. Those costs would eventually be passed on to American consumers of energy—small business owners, families, and farmers. It is estimated that the tax would total $22 billion in ten years, and the taxes would eventually climb to $3 billion per year. Of course, this new tax would only apply to American energy, giving a distinct advantage to foreign oil and gas companies and jeopardizing American energy jobs. The legislation is currently awaiting consideration by the Senate.
Latest Lame (Duck) Idea, the National Renewable Energy Standard: Under pressure from environmentalists and liberals within his caucus, Senate Majority Leader Harry Reid (D-NV) said this week that a job-killing renewable energy standard (RES) is “absolutely” still in the mix for a lame-duck session of Congress.
A national RES is a federal mandate requiring electric providers to derive a certain amount of their production from renewable sources (typically wind, solar, geothermal, and biomass). Most incomprehensibly exclude nuclear power (a greenhouse gas neutral technology) from the list of approved renewable sources. The cap-and-tax bill, approved by the House of Representatives, included a federal RES calling for a 20 percent renewable energy and energy efficiency standard by 2020. Last year, the Senate Energy and Natural Resources Committee approved a less stringent RES.
Many Republicans have expressed concerns with a national RES:
Higher Electricity Prices: A national RES would likely cause electricity prices to spike. The Heritage Foundation estimates a 36 percent increase in energy prices for households and a 60 percent increase for industry. The RES would not necessarily preempt state renewable electricity standards (at least 29 states have one), but would, instead, force utility companies to comply with both state and federal programs. Many state programs include resources that would not be eligible under the federal standard. If renewable energy was currently cost effective and efficient, there would be no need to federally mandate and subsidize it. A national RES would do just that, putting the current renewable energy market under the control of an extremely inefficient bureaucracy.
Further Drags Down the Economy, Kills Jobs: According to the Heritage Foundation, a national RES would cut national income (GDP) by $5.2 trillion between 2012 and 2035, cut income by $2,400 per year for a family of four, and reduce employment by more than one million jobs.
Regional Disparities: Members may be concerned that a RES would impose a uniform federal standard on states despite varying sources of renewable resources. For instance, southeastern states would be especially hard hit. In addition, forcing a RES on states that lack renewable energy supplies would transfer wealth between states in the renewable energy market. A RES would also disproportionally affect low-income states that have yet to invest in renewable energy, and whose budgets are already being stretched by the economic downturn.
Out of Control EPA: The Environmental Protection Agency (EPA) has waged a non-stop assault on U.S. jobs and competitiveness. In 2009, the EPA issued an endangerment finding stating that six greenhouse gases, including carbon dioxide, threaten public health and welfare under the Clean Air Act. This finding was intended to pave the way for EPA regulations on greenhouse gas emissions—another backdoor national energy tax. Due to political pressure, the EPA has attempted to minimize the economic impact of the endangerment finding for small business entities by issuing a “tailoring rule.” The tailoring rule temporarily raises the pollution thresholds in the Clean Air Act. However, the tailoring rule stands on uncertain legal ground, and it expires in 2016. Afterward, an unaccountable EPA could inflict a massive amount of economic pain by increasing the costs of energy for all consumers, including businesses and farms.
Another job-killing EPA action includes reconsidering national air standards for ground-level ozone, the primary constituent of smog. The EPA has proposed to significantly tighten the standards that were adopted less than two years ago, without new data prompting this reconsideration. The EPA estimates that its new ozone proposal could add as much as $90 billion per year to the high costs of operating a business. Those costs would be passed on to consumers.
The EPA has also taken job-killing actions against agriculture, the coal industry, and many other sectors of the U.S. economy. These misguided policies come at a cost of thousands of U.S. jobs—far too high a price to pay for political favors as the economy attempts to recover in spite of Democrats’ failed economic agenda.
Increased regulation, mandates, and higher taxes on the U.S. energy sector adds up to fewer jobs at a time when almost 10 percent of Americans are out of work. It is clear that the Democrats’ “Recovery Summer” is a failure. To create jobs, the Obama administration should jettison their onerous regulation of American energy production and instead pursue a job-creating “all-of-the-above” energy plan.