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Tuesday, May 12, 2009

Confused About “Cap And Trade”?

I want to thank our friend Gary Bauer at American Values for clarifying this issue for us.

Confused About “Cap And Trade”?

If you’re confused about the term “cap and trade,” don’t worry – you’re not alone. In recent weeks I’ve gotten several emails from good folks who don’t know what the term refers to, why people are so upset or excited by it or why they should care. As it turns out, only 24% of likely voters understand the term correctly, according to a new Rasmussen poll. Rasmussen found that 30% have no idea what “cap and trade” is, while 29% thought it has something to do with regulating Wall Street and 17% said health care reform.

In general, the term “cap and trade” refers to a plan to regulate energy production and the use of fossil fuels across the entire economy. It is a huge new government mandate. The “cap” refers to government plans to cap or limit the amount of carbon dioxide and other “greenhouse” gases that companies can emit. It would hit energy companies especially hard, since half of our nation’s electricity is produced with coal and another 30% comes from other sources like oil and natural gas. All fossil fuels emit carbon dioxide when burned for energy. The “trade” half of the plan refers to the government mandates that force a company to trade or buy permits to emit more carbon dioxide if it exceeds its “cap.” The permits would be issued by the government, so it’s a tax on energy production and energy use, which would be passed on to consumers – you and me.

Representative John Dingell (D-MI), put it best when he said, “Nobody in this country realizes that cap and trade is a tax, and it’s a great big one!” He’s right. As we have noted in previous reports, one estimate suggests that “cap and trade” could result in more than $3,000 in additional expenses to the American family every year, which is why many people refer to the plan as “cap and tax.” But don’t take my word for it. In January of last year, candidate Obama told the San Francisco Chronicle: “So if somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted. …you know, under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”

President Obama’s budget, which virtually every liberal in Congress voted for, calls for a “cap and trade” scheme that raises hundreds of billions of dollars in new taxes. White House aides have told Senate staffers that the plan could raise as much as $2 trillion in new taxes. Just think about that for a moment. Here we are in the middle of a recession and this White House and liberal politicians on Capitol Hill are scheming to impose one of the biggest tax increases in history. And it will affect every American who turns on a light switch, drives to work or consumes products, since just about every economic activity involves the use of fossil fuels!

American Values

2800 Shirlington Road
Suite 950
Arlington, VA 22206

Phone: 703-671-9700
Fax: 703-671-1680

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