While American families struggle to preserve their financial futures, Congress is hastily advancing a proposal that undermines our collective need for economic recovery. Under the guise of environmental reform, the U.S. House of Representatives passed cap-and-trade carbon emissions legislation — ignoring the job losses and increased costs Americans would face should this proposal succeed.
Cap-and-trade proponents seek California-style environmental regulations for the entire country. The bill, sponsored by Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass., would limit the nation’s greenhouse gas emissions by distributing permits to companies who emit. These permits would either be auctioned off to the highest bidder or distributed for free by government officials.
By imposing strict limits on emissions, government bureaucrats would ration productivity at a time when Americans crave real economic growth. The impact of cap-and-trade will devastate the economy.
To comply with emissions limits, companies will be forced to reduce their energy use. In reducing the amount of energy used, those companies will have to limit how much of their product they can produce. With less of these products available, prices for the goods we purchase on a regular basis will skyrocket.
Economic uncertainty among American families is at an all time high. Can Americans afford to pay even more for staples like food and clothing if cap-and-trade were to pass? Certainly not.
Not only would cap-and-trade increase prices on important goods and services, requiring companies to purchase emissions permits will also cause significant job losses and lower wages for American workers.
An analysis of cap-and-trade commissioned by the National Black Chamber of Commerce determined that passage of this legislation will result in a loss of 2.5 million American jobs and reduce the annual earnings for the average American worker by nearly $400 by 2030.
Proponents of cap-and-trade also look forward to the increase in energy prices their bill will create to deter the use of conventional sources of energy and encourage a shift toward costly alternatives.
This enthusiasm for higher energy costs comes from the very highest levels of the federal government. At a congressional hearing on the bill, Peter Orszag, director of President Obama’s Office of Management and Budget, testified that “price increases would be essential to the success of a cap-and-trade program.”
Despite the real threat of job losses and price increases, cap-and-trade passed in the U.S. House of Representatives on June 26, but just barely. Passage of the bill required 218 votes — the final roll call in the House was 219 in favor, and 212 opposed. While Republicans largely stood united in opposition to cap-and-trade (only eight of 179 Republican members voted in support), 44 Democrats broke ranks to oppose the bill. Many of those Democrats, including Reps. Mike Ross of Arkansas and Jim Costa of California, feared the economic impact of the wide-reaching legislation.
The fate of cap-and-trade now lies in the U.S. Senate, where the bill will likely be considered this fall. Should the Senate defeat this bill, our economy and all American families would be spared from the effects of this reckless legislation.
Cap-and-trade poses too great a threat to our long-term financial security. Today’s economic challenges require government to unleash the entrepreneurial spirit that has made our country the world’s economic superpower. Cap-and-trade takes the opposite approach. It is a proposal that Americans simply cannot afford.
Carol Weston, R-Montville, is a former state Senate minority leader.