We've been watching the bizarre politics of the Waxman-Markey bill with a mixture of awe and incredulity, a bag of popcorn at the ready. Last week, in "Climate Bill: "Most emission permits to be free: U.S. Rep. Doyle"; Obama Still Counting On Auction Revenue" we said:
There is a very odd disconnect here. I've got to run but I'll try to formulate what I think is going on.Preceded by "Don't Worry, Big Business Will Negotiate Cap-and-Trade on Your Behalf.........You'll Be Fine."
Prior to that we had "To Senator Reid Cap-and-Trade is Just a Tax; But With the Advantages of Being Deceitful and Expensive":
Now the Wall Street Journal beats me [yet again -ed] to the story with a good article topped by a clumsy headline:
Pretty slick. First we lowball the size of the tax while offering to give the taxpayers a fraction of their money back. Then we admit that, well, the tax will be triple what we said because, well, we need the money. Then we yank the original sweetener!
The only thing left to do is pay the 20% vigorish to the Wall Street firms, the carbon traders, accountants, lawyers, lobbyists, project developers, verifiers etc., etc.
Then you tell the folks back home about the green jobs you created!Meet the new boss, same as the old boss. All politicians are liars.
Climate-Bill Breaks Bode Ill for Deficit
The Obama administration said Monday that it expected even wider deficits this year and next than previously forecast, and Congress could undermine the administration's push to narrow the gap by slashing the revenue generated by the president's plan to curb greenhouse gases.Velvet Goldmine:
On Monday, White House budget director Peter Orszag revised the fiscal 2009 deficit upward by $89 billion to $1.84 trillion, 12.9% of the economy. That is a level not seen since 1945. Next year's deficit forecast was raised $87 billion, to $1.26 trillion.White House officials still say they are holding to a long-term goal of cutting the inherited budget deficit in half by 2013. But that effort is threatened by the weak economy and by congressional politics. White House economists didn't revise their expectation that the economy would be growing by 3.5% by the end of this year, despite the fact that some private economists have been lowering their forecasts.
Congress is debating proposals to give away to utilities and other businesses the pollution credits that would be created by a cap-and-trade system. Such a system is designed to reduce carbon-dioxide emissions by instituting caps, and requiring that businesses buy permits to pollute that they can trade like commodities.
Beginning in 2012, the White House budget had counted on the sale of greenhouse-gas emissions permits to bring in $77 billion to $79 billion a year through 2019. Of the $624 billion in revenue, the White House allocated $504 billion to a $800-per-family tax cut for households with incomes below $150,000, in part to offset the impact of the cap-and-trade system on electricity rates. An additional $15 billion a year was dedicated to developing and deploying renewable-energy efforts to replace the fossil fuels being hit by the pollution trading system.
If Congress decides to give away permits, that would mean less money for policy ideas such as the president's Making Work Pay tax cut and his push to wean the nation off fossil fuels, and less money for deficit reduction.
"At least half the revenue that the administration is expecting is just not going to materialize," said Daniel J. Weiss, director of Climate Strategy at the Center for American Progress, a liberal think tank closely allied with the Obama White House....MORE