CBO says climate bill would cut deficit by $19B
A report by the nonpartisan Congressional Budget Office (CBO) says the climate & energy bill currently stalled in the Senate would reduce the federal deficit by about $19 billion over the next ten years. The CBO is responsible for providing Congress with nonpartisan analyses of economic and budget issues, and lawmakers rely on it for guidance. This is the second positive analysis of the bill by a government agency in a month. A similar report was issued by the Environmental Protection Agency in June.
Many senators have said they flatly oppose legislation that adds even a penny to the federal deficit, and these two reports should force them to look anew at this initiative which will actually reduce it.
In its report Wednesday, the CBO said the energy bill would increase federal revenues by about $751 billion from 2011 to 2020, mostly though the sale of carbon credits in a cap-and-trade plan to be applied to utilities and other sectors of the economy.
The measure would increase spending by about nearly $732 billion, mostly from refunds to utility bills and tax credits, as well as investment in various energy provisions including research and development, the report said.
The Senate bill would tax carbon dioxide emissions produced by coal-fired power plants and other large polluters as a way to reduce pollution blamed for global warming. The legislation has been referred to by many Republicans as a “national energy tax” and no GOP senator has signed on as a co-sponsor.
An analysis by the EPA last month concluded the Senate’s “American Power Act”, would cost households an average of $79 to $146 per year. The sponsors of the bill have indicated that they believe Americans are willing to pay less than a dollar a day to curb global warming, reduce oil imports and create energy-related jobs.
The legislation aims to cut greenhouse gass emissions by 17 percent by 2020 and by more than 80 percent by 2050.
Even as the CBO was conducting its analysis, lawmakers had begun considering the more modest approach that would limit the carbon tax to the electricity sector and some White House officials have begun to speak favorably about such an approach, which they believe could be more attractive to Republicans. At a White House meeting last week, a bipartisan group of senators discussed an emissions cap that would be limited to stationary sources, such as power plants and refineries.
This shows that capping carbon is good for the budget as well as the planet, even in a bill full of so many giveaways to big polluters it makes swiss cheese look sturdy by comparison. A full 100% auction of all carbon credits would raise even more revenue, and be even better for the budget in both the long and short term. It would be interesting to compare the CBO scores of the APA with the Cantwell-Collins climate bill… or the Boxer-Kerry bill from earlier this year.
Stay tuned as we wait to hear more about congressional response to this report.
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