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  • CBO's Latest Cap and Trade Analysis

    Here’s today’s news from the Congressional Budget Office on the recently passed Waxman-Markey legislation: It’s a big tax and spend bill. For the years 2010-2019 the tax increase is $872.8 billion. Ka-ching! (For the record, that’s pretty close [we’re talking government work here] to the $885 billion revenue estimate that Heritage calculated through 2019.)

    The CBO estimates the spending increases in the bill add up to $863.8 billion. Wow! It didn’t take long to spend that money. The outlays amount to 98.9 percent of the expected revenue. More startling, perhaps, is that the bill authorizes expenditures of $875.2 billion. That is, they have authorized spending 100.3 percent of the amount taken in. Some of that spending is delayed, perhaps, so that there is no increase in the deficit up to 2019 from Waxman-Markey, but maybe later.

    On the other hand, maybe we won’t have to wait for the deficit. Here’s one quote from today’s letter to Henry Waxman: “CBO has not completed an estimate of the bill’s estimated impact on discretionary spending.”

    Also, since this most recent scoring seems based on their previous analysis of the legislation, it doesn’t include the impact on government spending from the weaker economy that Waxman-Markey will deliver. Here’s what they said in their previous analysis:

    “The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap. The reduction in GDP would also include indirect general equilibrium effects, such as changes in the labor supply resulting from reductions in real wages and potential reductions in the productivity of capital and labor.”

    In other words, the CBO is ignoring the trillions of dollars of income that Waxman-Markey destroys. That doesn’t help the deficit.

    The Heritage analysis of the Waxman-Markey bill does take into account how a weaker economy affects government revenue, and we find the year over year increase in federal budget deficits amount to $938 billion more debt our nation will owe in 2019. (As with the CBO estimates, this projection is not adjusted for inflation.)

    At the very least, we agree with the CBO that the Waxman-Markey legislation is a huge tax and spend bill.

    Posted in Energy [slideshow_deploy]

    19 Responses to CBO's Latest Cap and Trade Analysis

    1. Jon Zayicek, Chesape says:

      This is the most dispicable thing that this administration has attempted to push through. I am appaled that this thing made it through the house in such a quick manner. Why are we in such a hurry to pass this Crap and Trade Bill that will destroy our economy and put more of a tax burden on this country. I have a feeling that soon enough we will be paying 60-70% of our incomes in taxes to the Federal Government. This is a disgrace and all elected officials should be tossed out and we should start from scratch with people who have actually had to work for a living in a real business and make real decisions.

    2. John Waite, Jacksonv says:

      I fully agree with Mr. Zayicek. When are we going to actively pursue our need for a governing body that is "for the people" , instead of for the outright theft of American worker's assets?

      Start from scratch, only select people that have had to live in reality, and put in place a system of punishment for those seeking to get rich off what the people in the trenches work for. In addition, if it isn't possible to do away with the welfare system entirely, then drug test those living off the government's programs BEFORE handing them a check – with a zero tolerance, zero welfare policy. Also, before we cut vital programs to save a nickel, let's cut some political perks first.

    3. Pingback: » Financial News Update - 06/29/09 NoisyRoom.net: “Extremism in the defense of liberty is no vice. Moderation in the face of tyranny is no virtue.” Barry Goldwater

    4. Pingback: Sound The Bell! » Blog Archive » Congress Wants All of the U.S. to be Bankrupt Like California

    5. Mark, Seattle says:

      Last week, the CBO published an analysis stating that the annual cost per household of ACES would be something like $100. This was very different than the roughly $2,000 per household calculated by Heritage. (These numbers are approximate.)

      Now, the CBO has provided a tax bill calculation of $863B. If I divide that into roughly 100M households over 10 years, I get an average annual tax cost of $863. So the CBO's own estimate last week was quite far off what they are saying this week.

      Given that there are likely costs other than just the tax, the $863 is just a starting point. Looks like Heritage takes the point on this one. I also expect very few Americans would approve such an increase in their taxes to gain less than a degree of mitigation fifty years from now.

    6. Tom Iowa says:

      It is time to vote out all who are in the Congress and Senate. All fresh blood. No more stacking of bills. Vote on each bill in and of itself. Sure it will take longer to pass laws. But what is wrong with that? Look at the ( Stimulus Bill) that no one read with all the add ons and pork barreling. Also the Cap and Trade bill with the 3 a.m. 300+ page amendment that no-one has read on top of the 1200 pages that no-one got through. It is way past time to SLOW DOWN THE GOVERNMENT.. Call and e-mail your congressmen and senators weekly untill they start to get the idea that WE pay their salaries and they do what WE say……

    7. Ross, Bradenton, Flo says:

      What a ponzi scheme this bill is!!!

      Whatever that crook in NYC did is small change compared to this legislative scheme. I'll glad support jail-time for Rep. Waxman(of CALIFORNIA) and his co-conspirators of 150 years each. This whole scheme/bill is a crime being pulled on the American people and our liberty!

    8. Bill Lee says:

      If this measure is passed and put in force, many plants will shut down. In my little community I know of two facilities that have announced they will shut down. The expenses of installing the additional abatement equipment(30-100 Million) and then the fees of 3-4 million per year will take all the profits away.

      So stand by for 15-20% unemployment and shortages of gasoline and chemical products.

      Not only that the income that Obama is expecting to generate will not occur.

      I really think Obama wants to make America a third world country and when the chaos breaks out he will declare Marshal Law. 2008 may be the last elections we see in the USA!

      Way to go Obama this is a change!!!!!

    9. Pingback: How Do You Tax When There's No Money There To Tax? - Columns - American Issues Project

    10. PattieW, Virginia says:

      Does this report surprise anyone. This is only the beginning, there's no telling how much it will actually end up costing. But these elected officials that we have sent to Washington to work for us, don't have a problem turning around and slitting our throats or stabbing us in the back, when it comes to money. They know what's best for us, when it comes to money. They know how to protect us from global warming, when it comes to money. If we don't get these bozo's out of there, our country will end up being a recreational area for the world's elite. While the other countries have all the jobs, we will be busy cutting grass, sweeping the tennis courts, serving the tea, cleaning up the trash after the elitist that look down their noses at the poor Americans. Some who can speak Indian, or Chinese may be get telemarketing jobs from technology firms in other countries. I don't put anything past this Congress. Let's try our best to clean house when their time is up. It's time to let them know who is boss!!!!

    11. Billv. Michigan says:

      Hi All,

      This American society all boils down to hard working men and women in every sized business. With the economy so dysfunctional at the moment we hard workers are strapped for any spare time so we entrust those we have placed into government office to manage the store while we are off busy doing our part which makes this country great. Freedoms have a high price, and thank the soldiers and veterans for their extremely generous gift. However Freedom is about the individual making choices by doing your job, going to school, creating a business, discovering innovation and spending those extra hours not having fun, but doing the important things necessary to keep it all going. Choice is training oneself in any method possible to improve your skills, tools and value not only for yourself, but for all those you touch around you.

      The environment is important in that like many other topics our mismanagement is passed to future generations to resolve. The whole “H.R. 2454 American Clean Energy and Security Act of 2009” is a welfare program for the government organizations. The core problem is that any burning fuel causes the production of carbon dioxide. The Earth has a natural method to deal with carbon dioxide called photosynthesis, but we allow forests to be replaced by parking lots. If the EPA, DOE and DOT which have existed for decades have not been able to develop equally price energies options then another influx in revenue has no guarantees that solutions will be discovered.

      The government could be driving those changes, but the problem is those discoveries are not measurable in political based timetables. You couldn’t pick the time frame for Edison to discover tungsten worked in the light bulb. So perhaps regulating Edison material options could have reduced his time to market?

      However placing a tax burden on the backs of the business and the people is simply not the correct approach. Because the taxation control is removed multiple times from the actual consumer, exactly how does a business or household manage their own consumption? This is a pass the buck strategy which will force businesses even to greater a degree to utilize off shore manufacturing resources and reducing the number of job in America into regions with zero power production regulations. Some Power companies will maintain near existing pricing while others will absorb huge pricing increase destroy regional businesses. Taxation without direct user control is taxation WITHOUT representation in my eyes.

      Thanks for you efforts. I am trying to do mine and the legislative branch will soon realize we are here and watching.

    12. Richard, Spring TX says:

      When we are told that a bill is on 'fast track" it should be a red flag to all of us. Fast track means that if the public had enough time to read and study a bill it probably would not get passed.

    13. Bob Wilson Arizo says:

      It is heartening to see so many others who feel as I do — that Congress and in particular the President seem to have no understanding or experience in working for a living where they take risks, win some, lose some and still always try to be able to come out with a balance between income and expenses. Congress and the President have made a big deal about some of the executives in major companies who got huge bonuses when they left their jobs. Why don't we do the same thing with our Congress and President. Pay a minimum salary and a good sized bonus if they run the government, meet the voters wishes on programs, and end up each year with a breakeven budget. Of course we will also need to have competent, non-partisan CPA's using General Accepted Accounting Practices in their accounting to check and report on them.. No "off-budget" items. True Capital Expenditures must be paid off on a stated basis and amortized accordingly.Bonuses would be available 6 months after the close of the fiscal year. 2 failures over 3 years would cost them their job and they could not be rehired by the Gov't for any job. Probably this would be complicated for most of those in Gov't particularly the President.

    14. John Burdick, Glendo says:

      And now we find out that an EPA scientist's findings that so-called global warming is not happening and is unrelated to Carbon Dioxide has been supressed by the EPA. This now appears to be a criminal conspiracy.

    15. Pingback: CBO, Entitlments, Health Care Reform and the Deficit | QandO

    16. Larry- in the REPUBL says:

      AS usual, one lawyer with a brief case can steal MORE money than any brigade of men with guns and tanks!!! Multiply that ONE lawyer by ALL who occupy a liberal seat in the House and Senate and you have the Congressional theives that rule on the HILL today!! How much more can they STEAL before the jig is up? Only them and their ablilities to pull the NEXT crisis out of their breif cases can answer that question!!

    17. Steve, Cincinnati, O says:

      While I am no expert on cap-and-trade and its supposed de/merits, I always find the commenters on the Heritage's site do much to discredit the organization. But what do I know? Maybe the majority of people on this site are right and Obama and the Democrats are really trying to pass Cap-and-Trade as a way to plummet our country into Third World Poverty in an effort to be able to claim complete dominion over a completely worthless skin of what used to be the great United States of America. I guess if that's true we deserved it for electing not only this one President but a collection of his "minions" over the past 4 to 5 years right in plain sight. Seriously, some on this sight never seemed to learn the principle of disagreeing without being disagreeable.

    18. John Perkins Washi says:

      There is a commited effort by George Soros, Apollo Alliance, ACORN and SEIU to work together to bring down the US economy, I'm thinking to create an even bigger crisis, so Obama and the govt can gain even greater control, and this is one step toward that. They have so many groups marching in lockstep, it will make for a downhill slide in our economy.

    19. Cherokee, Texas says:

      What amazes me is that no one is talking about who it is that stands to make money off of this bill. We all know it will cost us dearly, not only out of pocket, but in jobs and a major hit to the economy. Consider this, if it becomes law, every power entity will pay fines for not meeting the standards established by this bill. And if they want to stay in business, they must purchase carbon offsets.

      But they can't just go out and buy them, they can't deal with a foreign government directly. They must use an authorized broker to buy the offsets from, let's say Mumbai, who has no real industry and also no human rights. But they do have a "carbon offset surplus". The broker then gets his cut from both the purchasing entity AND the nation from which they arrange the offset.

      And who is an authorized broker? The largest is Generation Investment Management, a London-based company with offices in Washington, D.C. This particular company was founded by none other than Al Gore and a partner back in 2003, at a cost to each of $250,000 each. They each stand to make over $250 billion by selling and trading carbon offsets. Sure makes it look like Gore has a vested interest in the hoax known now as "climate change". No wonder he's pushing it so hard. And it's also no wonder that Congress is pushing his agenda. I wonder how much their payoff will be?

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