The Treasury Department, in response to a FOIA request, yesterday released an analysis of cap and trade that calculates that new carbon regulations would cost the American taxpayers up to $200 billion a year. At the upper end of the estimate, families would see their energy costs go up by $1,761 a year. This equals a 15% hike in income taxes and 1% of America’s GDP. Some other curious points include that Treasury’s analysis doesn’t have a timetable to reach those numbers, and an odd redaction by the Treasury Department that makes the claims more suspicious:
One odd point: The document written by Jaffee includes this line: “It will raise energy prices and impose annual costs on the order of XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX.” The Treasury Department redacted the rest of the sentence with a thick black line.
I told you back in April about the MIT scientist who predicted that cap and trade might cost $3,900 per household, so in a way you could look at this number as an improvement. Granted, the high number won’t be reached the instant cap and trade is passed, but even a gradual uptick in energy prices isn’t going to sell to a public that’s already feeling squeezed.
If cap and trade had problems before, they were just compounded by an admission by the Obama administration that the measure will be costly. Supporters can make the argument that the increased energy costs will result in more perks for taxpayers, but the connection is too ill-defined and nebulous to be of much value. The cap and trade legislation, which had already been delayed due to the health care debate, will no doubt be shoved even further into the corner as the Senate will become even more skeptical of its worth and frightened of the political fallout should they pass legislation that will raise energy prices.