Originally posted at The Daily Caller:
A tri-partisan group of Senators, known as the “Senate Trio,” are unveiling details about their sweeping energy and climate bill set to be introduced on April 15, Tax Day. The plan is a massive national gas tax that will hit every American family at the pump and increase the cost of all goods and services nationwide.
The bill being drafted by Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.), and Joe Lieberman (I-Conn.), proposes to reduce greenhouse gas emissions 17 percent by 2020 and 80 percent by 2050—an ambitious goal that some analysts say is simply unfeasible.
This proposal differs from the House passed “cap-and-trade” bill introduced by Reps. Ed Markey (D-Mass.), and Henry Waxman (D-Calif.), which held traditional refiners responsible for their own emissions as well as those produced by carbon intensive activities—flying, driving, heating, and more. The Trio’s proposal is much more direct—a gas tax.
Of course, the Trio does not refer to it as a gas tax. During times of economic uncertainty, the political feasibility of passing something labeled as a gas tax goes from slim to impossible. But make no mistake, it is a gas tax. By placing the tax closer to the consumers at the pump, rather then penalizing companies who do not produce to meet supply, but produce to meet demand, the burden is on the user to decrease consumption, not the companies to produce less.
Their gas tax comes in the form of a direct carbon tax on every gallon of gasoline purchased by consumers at the pump, which functions as a “linked fee.” Simply put, the tax would be linked to the price of carbon emissions bought and traded in the market. Sen. Graham said of the gas tax, “a linked fee to me makes sense.”
It is proven that increased taxation disincentives use—that is not in dispute. However the fact remains; a tax, is a tax, is a tax. The cost of goods will increase due to the increased cost of production and transport. The cost of daily commutes will increase and the cost of flying will increase negatively impacting tourist destinations like Florida and Nevada.
Also included is something Sen. Kerry calls “cap-and-refund,” which borrows from the “cap-and-dividend” proposal offered by Sens. Maria Cantwell (D-Wash.), and Susan Collins (R-Maine). The “refund” plans to send half of the federal revenue gained from businesses purchasing emission credits back to consumers in a form not yet specified.
But where is the impetus? Politically and practically, why do anything? Gas prices are relatively stable at $2.79 per gallon nationally, nowhere near the peak price of $4.11 during the summer of 2008. The controversy surrounding the healthcare vote may ensure that members will not want to force anything else through that will hurt their reelection chances in 2010 and 2012. Is every Senator only coming to the table on a comprehensive energy/climate bill in search of their own “cornhusker kickback?”
Sen. Mary Landrieu (D-La.), said such a notion is “offensive” adding, “It’s not what I need; it’s what I believe what the people I represent believe.” Yet she is pushing to expand offshore drilling which would lead to financial growth for Louisiana and the neighboring states which collect more than one-third of the federal revenues from offshore drilling. Louisiana ranks fourth among the states in crude oil production (first if Louisiana Outer Continental Shelf is included), with an estimated 72.5 million barrels produced in 2008 and employs 48,344 people in this industry.
Before legislation is even drafted, other Senators are asking for their own kickbacks. Sen. Kerry was asked by Sen. Carl Levin (D-Mich.), to include a mandatory national emission standard for automobiles which would certainly help the crippled industries in his state. West Virginia Democratic Sen. Jay Rockefeller requested $20 billion to implement a carbon sequestration and capture mechanism to regulate emissions from coal-fired plants as they are one of the top coal mining areas in the world.
Sen. Byron Dorgan (D-ND.) wants to pass the energy provisions that already came out of the Committee while Sen. Blanche Lincoln (D-Ark.) says she is opposed to that proposal as it contains the same House passed “cap-and-trade” language.
While it appears ideas to bring in more Republicans, such as increasing nuclear production, and domestic oil and natural gas production have been discussed, is this enough to offset a national gas tax, a price on industrial carbon emissions and a skeptical 80 percent emissions reduction in 40 years?
The Trio’s plan to raise taxes on every American family during an economic depression, on tax day, is a pretty big gamble that they may not have the chips to back.