Cap and Trade Won't Break the Bank: Climate Bill Would Actually Cut US Budget Defecit
Image via Stand Up for America
A new report from the US Budget office revealed that the ever controversial Waxman-Markey climate bill would actually end up cutting the budget defecit--not causing it to skyrocket, as its fiercest critics contend. Revenue from the cap and trade would end up adding over $846 billion to Obama's budget.Of course, the system would cost around $821 billion to orchestrate--but that's still a sizable net gain for a budget that can use any funding it can round up. According to Bloomberg:
The budget estimate says the legislation, to cap greenhouse-gas emissions and create a system to trade pollution permits, would raise $846.6 billion while adding $821.2 billion to federal spending, $24.4 billion net gain.
The bill, which the House Energy and Commerce Committee approved May 21, would require utilities, refineries and manufacturers to cut emissions 17 percent by 2020. Republicans who opposed the bill said it would harm the economy by raising the cost of energy production and increasing prices to consumers.
The interesting part is where most of the costs of the current form of the proposed cap and trade comes from: paying for big polluting companies' free permit allowances.
Federal spending would include $693 billion for emission credits that would be given away to factories and other polluters free. "The free distribution of allowances by the federal government would be essentially equivalent to the distribution of cash grants," the report said.
So just imagine how much revenue it could generate for the budget if the climate bill didn't cut big biz a break--we might even come close to hitting the $645 billion mark that Obama's envisioned cap and trade would generate.