The report finds that the bill, sponsored by Reps. Henry Waxman (D-Calif.) and Ed Markey (D-Mass.), would raise roughly $845.6 billion in federal revenue from 2010 to 2019, while it would call for about $821 billion in direct federal spending over that period. Bottom line: a $24.4 billion net gain for the Treasury.
Under the bill’s cap-and-trade program, large industrial polluters would have to reduce their emissions of greenhouse gases and acquire permits for the pollution they are entitled to emit. About 85 percent of those permits would be given away at the start of the program, but about 15 percent would be auctioned off, bringing money into federal coffers, and the percentage of credits distributed via auction would gradually rise over the years.
Proceeds from the auctioning of permits would be used to offset higher energy costs for consumers, increase funding for clean-energy technologies, provide loans for green-tech ventures, and offer a cash incentive for consumers to trade in gas-guzzling automobiles. But even with that spending, the bill would still be a net gain for the government, the CBO estimates.
This analysis matters because cost is a key sticking point for a number of legislators, specifically moderate “Blue Dog” Democrats who have been known to hold up bills that are not deficit neutral. The Blue Dogs delayed an extension of tax credits for the renewable energy industry last year over concerns about how they would be paid for. So reassuring moderate Democrats that the climate bill won’t be a budget buster could help get them on board — though many of these lawmakers are from coal and oil states and so oppose the bill for other reasons too.
The CBO analysis probably won’t sway the many Republicans who oppose the bill, some of whom have maligned it as a secret tax scheme intended to grow the government.
Take, for instance, the reaction over at the National Review‘s Planet Gore blog:
Well, that’s a nice effort at recovery by the Congressional Budget Office to apologize to the Obama White House for years of admitting that its current pet scheme, CO2 cap-and-trade, operates as and has all of the attributes of an energy tax, and is inarguably the very same: productivity and real wages fall, prices rise, and other lovelies.