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House Republicans Say Democrats' Bill Would Raise Energy Prices

House Energy and Commerce Committee ranking member Joe Barton (R-TX) and other Republicans Tuesday took pot shots at the Democrats' proposed cap-and-trade system for controlling greenhouse gas (GHG) emissions, saying it would deepen the nation's economic turmoil by driving up energy prices and sending millions of jobs overseas.

"The debate is not about whether cap-and-trade legislation will raise energy costs; the only dispute is by how much," Barton said at the first of four hearings this week on the discussion draft of the American Clean Energy and Security Act of 2009 (see Daily GPI, April 2), which was proposed by Committee Chairman Henry Waxman (D-CA) and Rep. Edward Markey (D-MA).

"We had hoped for a CBO [Congressional Budget Office] score of this discussion draft. But the CBO unfortunately told us they could not score it without the actual number of allocations," he said. "We...hear the draft's proponents assure us that this [cap-and-trade] scheme will create jobs and help industry thrive. The proponents will claim that costs -- where necessary -- are very minimal." But independent scoring of similar proposals last year "paints a different picture," Barton said.

Rep. Michael Burgess (R-TX) estimated that the cost of the proposed cap-and-trade system would be well over $1 trillion.

"With a cap-and-trade scheme like that proposed by Chairman Waxman and Markey, households can expect energy cost increases [of] up to $3,128 per year. Your electricity bill will increase by 77% to 129%. Filling up your gas tank will cost anywhere from 60% to 144% more. [And] the cost of home heating oil and natural gas will nearly double," Barton said.

In addition, the "cap-and-trade proposal...will cause millions of American jobs to be sent overseas. According to the National Association of Manufacturers, an estimated 3-4 million net jobs will be lost under a cap-and-trade scheme like the Waxman-Markey draft. According to the Heritage Foundation, between 1.8 and 5.3 million would be destroyed; and Charles Rivers Associates estimated job losses as high as 7 million," he noted.

"Under the Waxman-Markey draft, we are capping our economy and trading away our jobs. We are instituting a regressive energy tax on Americans already enduring high unemployment, lost 401(k)s and rampant home foreclosures. The Waxman-Markey discussion draft is a web of increased regulation that will entangle the economy into paralysis."

The cap-and-trade proposal will place the U.S. economy at a "distinct competitive disadvantage," agreed Rep. Steve Scalise (R-LA).

In a letter to Waxman and Markey Tuesday, Barton and every other Republican on the committee said the draft proposal was incomplete and that more hearings were needed. "As an initial matter, we would note that you discussion draft lacks any decision on permit allocations versus auctions. The manner in which you will address this issue is the cornerstone of the legislation. Without it, the bill is simply not finished and not ripe to be marked up or accurately discussed in the context of a hearing."

House Republicans agreed that the legislation must balance the need for a cleaner environment with the protection of domestic energy-intensive industries, such as chemicals and refineries, as well as consumers.

"If climate [change] policy leads to energy disruptions, consumers will question that policy," said Rep. Gene Green (D-TX), whose district includes oil and natural gas companies. But he believes now is the time for Congress to act on climate change policy, given the Environmental Protection Agency's decision last week that GHG emissions contribute to air pollution and may endanger public health (see Daily GPI, April 20). If Congress does not move forward, GHG emissions could be handled administratively by the EPA, Green said.

The Waxman-Markey bill "may do more harm" than any other piece of legislation by increasing the daily costs to businesses and families unless this is "explicitly protected in the language," Burgess said.

"I am impressed with the draft bill," said Rep. John Dingell (D-MI), but he noted that he was concerned about the "aggressive" nature of the renewable electricity standard.

The bill calls for the production of 20% of electricity from renewable sources by 2025, according to Rep. Ed Whitfield (R-KY). This "simply cannot be done."

Rep. Jane Harman (D-CA) called the bill "very thoughtful," adding that it "has a few holes to fill," but it has a "sound foundation." The committee will need to "come together on some of the tough details."

The Wax-Markey legislation would mandate an 83% reduction in GHG emissions by 2050 and calls for greater use of renewable energy sources in the generation of electricity.

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