In my original post about Obama’s budget, I looked at the issue of how much of the auction revenue ought to be rebated directly to taxpayers and how much should be devoted to investments in green infrastructure, etc.

The Center on Budget and Policy Priorities found that with 55 percent of auction revenue, those in the bottom 60 percent of incomes in the U.S. could have their increased energy costs entirely offset. That’s pretty much all of lower-income and middle-class taxpayers.

So what is Obama proposing to do with the revenue?

The short answer is: $15 billion a year goes to green investments and the rest goes to "Making Work Pay," i.e., offsetting payroll taxes. (See p. 3 of the Summary Tables [PDF].) That stays true over the next ten years, which means that the percentage of revenue rebated rises steadily.

So, in the first year, out of $78.7b in revenue, $63.7b is rebated — roughly 81 percent. In 2019, out of $83b in projected revenue, $68b is rebated — about 82%. But it’s important to note that the $15b in investments is held steady, regardless of total revenue. If revenue rises faster and farther than these projections — and these are extremely conservative projections — then the percentage rebated could get up to 85, 90, 95 percent.

That is, in my humble opinion, bad policy. But there it is.