Can President Obama lead the United States out of the recession? In a word, no. Economist Russ Robert opines, “No man or woman runs the economy. No man or woman or team of people can possibly plan the evolution of the economy in the coming months. America will come out of the recession but the time and pace are unknown. Obama can help. But he can just as easily slow down any recovery. Some part of the current mess we’re in is the result of erratic government policy that has added to the uncertainty facing consumer, investors, and entrepreneurs.”
The takeaway here is that he can help or he can make things worse. In a letter to Treasury Secretary Timothy Geithner, Congressman Joe Barton (R-Texas) does a very good job explaining how a cap and trade policy will do the latter:
Dear Secretary Geithner:
On January 8, 2009, then-President-elect Obama said he would offer working families a tax cut “to get people spending again.” He added that 95 percent of working families could expect to save an average of $1,000, explaining that it would constitute the first stage of a middle-class tax cut that he had promised during last year’s election campaign.
That level of cut would reduce taxes an estimated $770 billion, but as we know, the effective tax imposed by the Administration’s carbon cap-and-trade proposal would raise them by at least $676 billion. Consequently, the new taxes will absorb 88 percent of the promised tax cut, and maybe more. I am concerned that in real terms, this means the President’s tax cut of $1,000 would shrink, on average, to $120. That amount just doesn’t seem enough to get people spending again.
That’s not the only difficulty. Examination of the President’s budget reveals that much of the tax cut is not actually intended to assist taxpayers. About $326 billion of the tax cuts are in the form of credits and other mechanisms designed to deliver money to people who don’t pay taxes. Since tax-cut funds flowing to non-taxpayers must come from people who really do pay taxes, the result is that taxpayers will pay their own share of the cap- and-trade tax, and then pay extra to protect the non-taxpayers from cap and trade. If that happens, the everyday taxpayer can anticipate the government taking $522 more instead of $1,000 less.
America is counting on our new President to reinvigorate the stale economy. Pursuing a carbon cap-and-trade program that puts European-style global warming goals ahead of working taxpayers’ economic health is objectionable under most circumstances, but employing global warming policy to raise people’s taxes after promising to cut their taxes will be calamitous to families who were counting on that money.
I urge you to use your influence and prevail on the White House to reconsider this unhealthy smorgasbord of global warming radicalism and tax fantasy. The families whose paychecks are financing the trillion-dollar bailout and stimulus packages should be first in line for the help that we can extend to them, especially including a serious effort to reduce government’s appetite for the money people earn by working for it.
Joe Barton Ranking Member”