Paul Ryan: The Punitive Cap and Tax Bill

By Congressman Paul Ryan

The House recently considered H.R. 2454, the American Clean Energy Security Act. The bill seeks to cap global greenhouse emissions by putting in place a complicated “cap-and-trade” program that would require all energy producers to purchase expensive government permits in exchange for the right to produce energy from certain natural resources or to produce certain goods like steel, aluminum, or cement. The legislation will have a devastating impact on our economy and disproportionally hit cold-weather states like Wisconsin and I voted against this measure.

The proposed cap-and-trade scheme would, in affect, place a new tax on energy consumption, from transportation, to food, to electricity. It will cost taxpayers on average $3,000 per year and raise taxes by more than $840 billion. And the impact on Wisconsin will be especially severe. Estimates from the Congressional Budget Office and the Energy Information Administration predict Wisconsin families alone will shoulder an extra $230 million in energy costs as a consequence of this bill. At a time when families are struggling to cope with harsh economic conditions, driving up the cost of their heat and power bills is wildly irresponsible.

The consequences this unilateral energy tax will have on our fragile job market are just as alarming. Under H.R. 2454, the 1st District of Wisconsin is predicted to lose roughly 3,000 jobs. We are already suffering the pending closures of major car factories in Janesville, Kenosha and Oak Creek. The unemployment rate in Racine recently broke 10%. It is unacceptable for Congress to consider legislation that would drive even more Americans out of jobs and force businesses to close their doors. Wisconsin manufacturers, already facing stiff competition from overseas, would be put at an even further competitive disadvantage with countries such as China,\ that have no intention of inflicting a similar tax on their businesses.

Additionally, it is unclear whether this legislation would reduce carbon emissions enough to have a significant impact on global temperatures. In fact, studies from across the spectrum indicate that the various cap and trade schemes being proposed in Congress would produce a change in global temperatures of less than 0.5°F. And this change would not take full effect until 2095. Further, this small reduction in temperature also assumes that other countries will not increase carbon emissions. What’s worse, because the bill imposes this energy tax unilaterally, the legislation will actually hinder the environmental goals it has set out to achieve. By making manufacturing more expensive here in America, this bill would send manufacturing jobs overseas to our competitors like India and China. For every ton of emissions we reduce, India and China will produce several tons more.

I believe that environmental stewardship and economic growth are not mutually exclusive goals. That is why I have outlined a national energy proposal built on principles of conservation, American-made energy, regulatory reform, and alternative energy development. The economic well-being of the United States and the livelihood and safety of our citizens is largely dependent on maintaining a strong energy supply. We depend on electricity to light our homes and businesses, natural gas to heat them, and gasoline to operate the cars and trucks that carry us to work and transport our goods.

Unfortunately, the U.S. House of Representatives has continued to take the wrong approach in achieving our shared objectives of meaningful reform to our nation’s energy policies. That is why, on June 26, 2009, I voted against H.R. 2454. Unfortunately, despite my opposition, the House voted 219 to 212 to pass this bill. I am hopeful the Senate will work to address many of the shortcomings contained in the House measure.Congressman Paul Ryan serves Wisconsin’s 1st Congressional District. To contact him by phone in Washington, D.C., call (202) 225-3031. Or visit Paul Ryan at www.house.gov/ryan

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