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Senate Approves Budget Amendment Prohibiting a Cap-and-Trade Initiative from Causing Higher Energy Prices
Tuesday, March 31, 2009
9:00 PM

The Senate today overwhelmingly approved an amendment to the fiscal year (FY) 2010 budget resolution (S. Con. Res. 13) that would prohibit a future cap-and-trade initiative aimed at reducing greenhouse gas emissions from causing higher electricity rates and gas prices for U.S. households and businesses.

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"The increased utility and fuel costs that would result from cap-and-trade legislation, as proposed by President Obama, would equate to a national sales tax on energy that would affect every family in America," said Sen. John Thune (R-SD), the amendment's sponsor, following the 89 to 8 vote on his proposal.

The Senate also adopted a proposal by Sen. Barbara Boxer (D-CA) -- largely on party lines -- requiring that revenues obtained from upcoming global warming legislation be used to refund consumers for the price hikes via tax rebates. Boxer's amendment is based on legislation introduced by Sen. Bernie Sanders (I-VT) during the previous Congress.



Republicans have argued throughout this year's budget debate that a cap-and-trade plan would amount to a national sales tax raising energy costs by up to $3,100 a year per household.

"It is not a tax," countered Boxer, who also voted in favor of the Thune amendment. "Any kind of cap-and-trade system that comes forward will not raise energy and gas prices."

Thune disagreed during a press conference today, voicing his doubts that Boxer's tax rebate proposal would ever reach consumers.

"[Cap-and-trade] revenues are going to go to fund all these different things [Democrats] want to do," Thune asserted, pointing to health care reform as one example.

In a separate press conference, Senate Majority Leader Harry Reid (D-NV) dismissed speculation that he plans to push for cap-and-trade revenues to pay for an overhaul of the nation's health care system. (The Senate's budget resolution requires that the costs associated with future health care reform legislation to be fully offset.)
House Budget Resolution
Chairman's Mark (Text)
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Senate Budget Resolution
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"I have never said that the money for health care would be paid for by cap-and-trade," Reid told reporters. "What I did say is that it's interesting to note that the president's budget... that [cap-and-trade] number matches the health care number. But that doesn't mean that's how it would be done."

In related news, House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and Energy and Environment Subcommittee Chairman Ed Markey (D-MA) released a 648-page "discussion draft" of their American Clean Energy and Security Act today. The draft legislation "establishes a market-based program for reducing global warming pollution from electric utilities, oil companies, large industrial sources, and other covered entities," according to a summary released by committee staff. "Under this program, covered entities must have tradable federal permits, called 'allowances,' for each ton of pollution emitted into the atmosphere." The summary goes on to note that a "consumer assistance" section has not yet been drafted. Waxman intends for his panel to complete work on the bill by Memorial Day.

The House's budget blueprint (H. Con. Res. 85) contains a so-called "reserve fund" to accommodate legislation that, among other goals, limits and provides for reductions in greenhouse gas emissions. The full House could consider its budget as early as Wednesday evening, with final passage expected by week's end. After both chambers approve their respective versions of the FY 2010 budget resolution, House and Senate negotiators will meet to hammer out a final version. 




© Copyright Capitol Hill Reports, Inc. (2009). No claim to original government works.