Economy Alarm: Non-Partisan Congressional Budget Chief Contradicts Democrat Claims, National Energy Tax Will Cost Jobs
Non-Partisan Congressional Budget Chief Contradicts Democrat Claims, National Energy Tax Will Cost Jobs
“People, Communities, Firms and Affected Industries” Will Bear the Burden
Democrats Claim National Energy Tax Will Create Millions of New Jobs
“It will spur the development of low carbon sources of energy – everything from wind, solar, and geothermal power to safer nuclear energy and cleaner coal,” Obama said. “It will spur new energy savings, like the efficient windows and other materials that reduce heating costs in the winter and cooling costs in the summer. And most importantly, it will make possible the creation of millions of new jobs.” (Mark Silva, “Obama: Energy bill will spur new jobs,” Chicago Tribune, 6/27/2009)
Credibility Crash: Democrats’ National Energy Tax Will Cost Jobs
The head of the Congressional Budget Office on Wednesday countered Obama administration claims that a landmark climate bill would be a boost to the economy.
President Barack Obama and Senate Democrats championing the bill have said mandating greenhouse-gas caps, renewable energy and efficiency standards would be a boon to an ailing economy, creating new low-carbon industries. Millions of so-called green jobs would be created under the cap-and-trade legislation being considered in the Senate, Democrats say.
CBO Director Douglas Elmendorf warned a Senate energy panel that there would be “significant shifts” from emissions-intense sectors such as oil and refining firms to low-carbon businesses such as wind and solar power.
“The net effect of that we think would likely be some decline in employment during the transition because labor markets don’t move that fluidly,” Mr. Elmendorf said, testifying before the Senate Energy and Natural Resources Committee.
“The fact that jobs turn up somewhere else for some people does not mean there aren’t substantial costs borne by people, communities, firms and affected industries,” he said.
Sen. Sam Brownback (R., Kan.) expressed the fears of many lawmakers, both Democrat and Republican. “You’re talking about a massive market manipulation here on a grand scale that has significant impacts on the Midwest and the South … [including] the likelihood of us to lose a lot of jobs, a lot of businesses,” he said.
The CBO director added that although the risks of climate-related impacts on the economy were very difficult to quantify, “many economists believe that the right response to that kind of uncertainty is to take out some insurance, if you will, against some of the worst outcomes.”
The CBO estimates that the House-passed climate legislation, a template for the Senate version, would reduce gross domestic product by up to 0.75% by 2020 and 3.5% by 2050.
But Mr. Elmendorf and other senior government experts also said forecasts for economic impacts were riddled with ambiguity.
“The uncertainties are very large, even for 2020, and they get larger over time,” the CBO director said.
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Many industry officials also question the legitimacy of calculating international offsets, which will require a raft of complex international treaties and which can be very difficult to verify and prone to fraud. By eliminating the international offset assumption from their calculus, the EPA said carbon cost estimates nearly double.
The senior government experts also said the impact to the economy could easily impact different sections of the population disproportionately. The lowest-income quintile could see a positive benefit in their energy bills while the middle classes and industrial and commercial consumers would bear the burden of higher costs. (Ian Talley, “Congressional Budget Chief Says Climate Bill Would Cost Jobs,” The Wall Street Journal, 10/14/2009)
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