Even President Obama recognizes the indispensable role fossil fuels still have in maintaining our present-day standard of living, and restoring our battered economy. That is why he told a Newton, Iowa audience last month on Earth Day 2009 that, “We’re not going to transform our economy overnight. We still need more oil, we still need more gas.” What the President neglected to tell his audience is how much more their future energy supplies will cost if his “climate change” policies are adopted.
The President clearly wants to see carbon-based fuels phased out as quickly as possible. According to the Heritage Foundation, the President’s $3.6 trillion FY2010 budget makes seven significant changes in the U.S. tax code and essentially goes to war on domestic oil and natural gas production.
The most outlandish is a tax on production in the Gulf of Mexico, from which the nation produces significant quantities of oil and natural gas…. Several tax deductions are targeted for elimination. If the desire is to move away from oil and natural gas quickly, those economically damaging policies make sense. But can he convince the American people his vision is worth their sacrifice?
So, what would this sacrifice cost? Quite a lot, it seems. Estimates from the Congressional Budget Office peg the cost of cutting CO2 gases just 15 percent at about $1,600 per year for the average U.S. household, ranging from $700 in the lowest-income quintile to $2,200 in the highest-income quintile.
But “sacrifice” has become a key element of President Obama’s rhetorical arsenal. Here is what the President said back in February about taxes in his FY2010 budget:
[W]e’ll save billions of dollars by rolling back tax cuts for the wealthiest Americans while giving a middle-class tax cut to 95 percent of hardworking families. But we’ll also have to do something more -- we will, each and every one of us, have to compromise on certain things we care about, but which we simply cannot afford right now. That’s a sacrifice we’re going to have to make.
Disregarding the incongruity of a middle-class cut tax in the wake of unnecessary jumps in energy costs for all socioeconomic categories under President Obama’s plan, what is such “sacrifice” other than an abstraction aimed at obscuring the fact that significantly more taxpayer earnings would be appropriated for government consumption? President Obama’s “climate change” policies would compel consumers and industries to pay for curbs on CO2 gas emissions that they might otherwise reject. If the President’s plan is an advisable policy objective, then the true nature of his intentions must be discussed openly.
That is not likely to happen because the Obama plan is a dangerous policy lacking political consensus. Amid a serious economic recession, the plan would institute massive changes in U.S. tax policy that will dismantle our oil and gas industry in order to support investments in unproven alternatives. Where is the logic in taxing one energy source to pay for another, especially given the historical record on tax increases that previously derailed economic recoveries here in the United States during the Great Depression, and in Japan during the mid 1990s?
Only 34 percent of Americans now say they believe “global warming” is primarily caused by human activity. Additionally, recent polls show that most Americans are against setting caps on climate pollutants. In response, the Obama Administration reportedly will attempt to redefine the terms of this debate. It has consulted a marketing firm that recommends dropping phrases like “global warming” for “deteriorating atmosphere,” and employing terms like “the dirty fuels of the past” in place of carbon dioxide. The strategy is equivalent to President’s ploy to obscure massive energy tax increases. It is reckless and dissuades true debate.
John C Kalitka is an international trade attorney, advisor and analyst working in Washington, DC.
