I don't know what color the sky is in a world where that won't happen, but I'm sure you can ask the unicorns.
I literally laughed out loud when I came across this quote a few minutes ago. I'm glad that I wasn't drinking anything at the time or I'm sure that I would be cleaning it off of my monitor instead of writing this right now.
The nonpartisan Congressional Budget Office, which in my opinion has actually done a reasonable job at estimating the future cost of a number of programs lately, is significantly underestimating the cost of the new climate change bill that Congress is debating right now.
The CBO recently published a study in which it concludes that if passed the new climate-change legislation would only cost the average American household $175 extra per year by the year 2020. I find that extremely hard to believe. The CBO concluded that the changes that the bill mandates could end up adding 0.7% per year to the CPI by 2020. Buy those TIPS now people. The CBO even admits in its report that "some regions and industries would experience substantially higher rates of unemployment and job turnover as the program became increasingly stringent."
The cost estimate in the report is actually much higher than $175 per household, a gross cost of $770 - $1,380 more per household per year but the CBO assumes that the government will offset this cost with the revenue that it brings in from the permits that it sells. What are the odds that the grubby politicians in Washington, Democrat or Republican, don't start drooling over that extra revenue from the pollution permits and start spending it like they have been doing with the Social Security and Medicare funds for years?
Here's what Michael Steel, a spokesperson for House Minority Leader John A. Boehner had to say about the bill:
CBO analysts "got an unrealistically low number for cost per family because they didn't factor in the millions of American jobs that will move overseas if the United States imposes this tax and our foreign competitors, like China and India, do not. I don't know what color the sky is in a world where that won't happen, but I'm sure you can ask the unicorns."
Boehner claims that the bill could raise household energy costs by $3,128 annually by as early as 2015 and that it would drive jobs out of the country. The conservative Heritage Foundation has asserted that the cost could reach $4,300 a year.
Just like the CBO and another EPA estimate of the bill's cost look a little low, Boehner's and the Heritage Foundation's estimates are probably a little high. As is usually the case, the truth is probably somewhere in the middle.
A more realistic estimate of the bill's cost was published by MIT professor John M. Reilly, who estimates that for a family of four, in today's dollars, the bill's cost would rise to $510 extra per year by 2025 and fall to $205 per year by 2050 assuming that new technology is invented that would make green power less expensive.
I would be absolutely shocked if this bill did not make electricity painfully expensive for many people and if it did not have a number of unintended consequences, including an increase in the price of many goods, services, and food that are produced using the more expensive electricity that the bill mandates and possibly causing companies to produce more things in factories overseas at a time when we need jobs in the United States more than ever.
On the positive side, if global warming does exist and if this legislation would actually make more than a miniscule difference in global warming at a time when countries like China are building new coal-fired power plants practically every day (and those are big IFs) then at least the changes are helping the environment. Also, hopefully the United States can become a global leader in green technology. If we are able to, the industry may be able to create a number of new, high quality jobs that will help the economy.
Oh well, either way I have hedged my family against whatever pain comes from this bill by purchasing stock in two clean power companies that I like as investments if the bill doesn't pass and LOVE as investments if it does, FPL Group (FPL) and Exelon (EXC).
Whatever happens, this will be an interesting situation to follow. As it stands right now, Nancy Pelosi (yuck) is having trouble garnering support for the bill from farm-state Democrats, who have been trying to get changes in the legislation to ease the cost burden on farmers and people in rural areas. She needs to reach a compromise fast in order to bring the bill up for a vote before the House's July 4 holiday recess. It may not pass in Congress and even if it does, it could have trouble in the Senate.
By the way, why on Earth do those lazy @#$%^& in Congress get to take a 10 day recess from June 28 to July 7 and then more than month off from August 4 to September 7? Do you know how many days off, real working people like are taking off during this economy. I'm taking less than a week off from my two jobs (not including the work that I do at TMF) this summer. Whatever, I suppose that we're better off when Congress is not in session than when they are anyhow. They do less damage when they're off.
- New York Times: House Climate Bills's Annual Average Household Cost Is $175, CBO Says
House Dems Release Revised Climate Bill as Floor Debate Eyed for Friday
- Associated Press: CBO: Climate bill costs to be modest
- Washington Post - Climate Bill to Cost Average Consumer $175 a Year: CBO
- The Official CBO Report