White House Was Hiding Cost of Cap and Trade

Didn't President Obama promise that his administration would be the most transparent administration in history? Here is another example of how the president has either forgotten, or is intentionally disregarding that promise.

These documents were not revealed though presidential transparency but only through a freedom of information act request, the Competitive Enterprise Institute has discovered documents that show the White House has been less than truthful about his Cap and Tax plan. The documents reveal that the taxes in the  Cap and Trade bill will add a burden of $1,761 annually to US Families. That is the equivalent of an average 15% increase in the income tax rate.

A second memorandum, which was prepared for Obama's transition team after the November election, says this about climate change policies: "Economic costs will likely be on the order of 1 percent of GDP, making them equal in scale to all existing environmental regulation."

The documents (PDF) were obtained under the Freedom of Information Act by the free-market and released on Tuesday.

These disclosures will probably not aid the political prospects of the Democrats' cap and trade bill. The House of Representatives approved it by a remarkably narrow margin in June -- the bill would have failed if only six House members had switched their votes to "no" -- and it faces significant opposition in the Senate.

One reason the bill faces an uncertain future is concern about its cost. House Republican Leader John Boehner has estimated the additional tax bill would be at $366 billion a year, or $3,100 a year per family. Democrats have pointed to estimates from MIT's John Reilly, who put the cost at $800 a year per family, and noted that tax credits to low income households could offset part of the bite. The Heritage Foundation says that, by 2035, "the typical family of four will see its direct energy costs rise by over $1,500 per year."

One difference is that while Heritage's numbers are talking about 26 years in the future, the Treasury Department's figures don't have a time limit.

"Heritage is saying publicly what the administration is saying to itself privately," says Christopher Horner, a senior fellow at the Competitive Enterprise Institute who filed the FOIA request. "It's nice to see they're not spinning each other behind closed doors."

"They're not telling you the cost -- they're not telling you the benefit," says Horner, who wrote the Politically Incorrect Guide to Global Warming. "If they don't tell you the cost, and they don't tell you the benefit, what are they telling you? They're just talking about global salvation."

The FOIA'd document written by Judson Jaffe, who joined the Treasury Department's Office of Environment and Energy in January 2009, says: "Given the administration's proposal to auction all emission allowances, a cap-and-trade program could generate federal receipts on the order of $100 to $200 billion annually." (Obviously, any final cap-and-trade system may be different from what Obama had proposed, and could yield higher or lower taxes.)

Because personal income tax revenues bring in around $1.37 trillion a year, a $200 billion additional tax would be the equivalent of a 15 percent increase a year. A $100 billion additional tax would represent a 7 or 8 percent increase a year.

One odd point: The document written by Jaffee includes this line: "It will raise energy prices and impose annual costs on the order of XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX." The Treasury Department redacted the rest of the sentence with a thick black line.

The Freedom of Information Act, of course, contains no this-might-embarrass-the-president exemption (nor, for that matter, should federal agencies be in the business of possibly suppressing dissenting climate change voices). You'd hope the presidential administration that boasts of being the "most open and transparent in history" would be more forthcoming than this.

Yes Mr. President, your administration is transparent, in fact we can see right through you.