On April 20, President Obama called for $100 million in budget cuts after announcing spending increases of $4 trillion. Heritage Senior Policy Analyst Brian Riedl breaks it down nicely:
• It is 1/40,000 of the federal budget;
• It is 1/7,830 the size of the recent “stimulus” bill;
• It would close 1/1,845 of this year’s budget deficit;
• It is the amount the federal government spends every 13 minutes; and
• For a family earning $40,000 annually, it is the equivalent of cutting $1 from their family budget.
But if President Obama were to sign a cap and trade bill into law, he would have to call for familial budget cuts much greater than one dollar. (For a brief explanation of how cap and trade works, go here.) As recently acknowledged by a top White House official, a global warming tax could generate as much as $1.9 trillion in tax revenue over eight years, which amounts to a nearly $2,000 tax every year for every American household.* Add this up over the period of a few years and we’re talking about trillions of dollars in lost income for the entire U.S. economy.
The current recession is causing Americans to take a second look at their household budget. A cap and trade plan would make them look even harder.
*The Heritage Foundation’s Center for Data Analysis (CDA) calculations confirmed this. CDA took the CO2 allowance limits from the Lieberman-Warner cap and trade bill, which was more lax than the Waxman-Markey bill. CDA then multiplied the CO2 allowance for each year times our estimates for the allowance price for each year. The summation of these products for 8 years (2012-2019), divided by eight to get the average per year and divided that by the number of households (about 110-120 million households) gave us an average per household tax per year of nearly $2,000.
Part 1: Cap-and-Tax is a Jobs Destroyer