The Senate Environment and Public Works Committee is considering a cap and trade bill that purportedly takes aim at global warming.
Under a cap-and-trade scheme, the government would set a limit or "cap" on emissions of carbon dioxide. If, for example, a company goes over the limit, the government would force it to buy "credits" from other companies deemed by government to be producing less carbon dioxide than the cap allows. In countries where it has been tried, fraud has been rampant.
Sen. Barbara Boxer, D-Calif., chairs the committee and is co-author of the bill. She claims the legislation would create jobs, but that contradicts a statement made to Congress earlier this month by the director of the Congressional Budget Office that said cap and trade would cause "significant" job losses.
Lt. Col. James Jay Carafano (Ret.), a fellow with the Heritage Foundation, testified to the committee today that cap and trade would cripple the U.S. economy.
"Much of this decline would be from reduced economic productivity and job loss," he said. "In particular, under the House legislation, there would be 1.15 million fewer jobs on average than without a cap-and-trade bill."
Europe has imposed a similar tax that has cost its citizens $171 billion, but to date most countries have only reported minimal reduction in carbon dioxide emissions.
The Heritage Foundation estimates that by 2035, the typical American family of four would see energy costs rise more than $1,500 a year.
Grover Norquist, president of Americans for Tax Reform, also testified before the committee. He said the legislation includes 397 regulations on home sales that would make it nearly impossible for lower-income Americans to purchase property.
"This will also eliminate the 'fixer-upper' type homes upon which many low income buyers depend," he said. "Many low-income families buy less-than-perfect homes because they are cheaper and they can perform needed repairs and improvements themselves."
Norquist said Americans will also feel the effects at the gas pump.
"A study by Senators Kay Bailey Hutchinson and Kit Bond found that the Waxman-Markey bill will result in a $3.6 trillion gas tax," he testified. "That breaks down to an additional $2.0 trillion tax on gasoline, a $1.3 trillion tax on diesel fuel, and a $330 billion tax on jet fuel."
Sen. David Vitter, R-La., said in a blog on the Heritage Foundation Web site that the American family can expect to see considerable increases in the cost of living.
"It is clear that most American families' standard of living will be reduced," he said, "if this cap-and-trade bill is approved by Congress."
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