Cap & Trade Bill: Special Interest Bonanza That Adds to Deficit

Ben Lieberman / August 26, 2009

In his original budget proposal, President Obama envisioned a cap-and-trade program that would raise hundreds of billions of dollars by selling emissions credits to businesses. He then proposed spending $504 billion of these revenues on a making-work-pay tax credit, and $120 billion on new energy research spending. However, the House has since passed a cap-and-trade bill that would give away most if not all of the emissions credits, leaving no more than $165 billion for other spending (most of which the bill allocates to low-income energy rebates).

It is also worth noting that these giveaways to utilities, manufacturers and others were necessary for the bill to pass (by a narrow margin) the House. Even more will likely have to be promised for this measure to garner a filibuster proof majority in the Senate.

Yet despite Congress’ signal that these excess revenues will not materialize, the President’s mid-session budget update has once again proposed to spend over $620 billion on the make-work pay credit and new energy spending. (more…)