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, a Democrat from Michigan,
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 Democrat 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 Democrats 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! House Republicans have labeled the
proposal “a declaration of war” on the American people and
are fighting hard to stop it.
