Climate Legislation Will Cost $3,128 About $175 Per Household
Two weeks ago, I noted that the Congressional Budget Office had completed a preliminary analysis of the Waxman-Markey climate change bill and determined that it would be a net deficit reducer over 10 years,
Whatever the merits of the legislation, that's an important political fact--one that makes it more difficult for Blue Dogs and other deficit hawks to oppose the bill on the inaccurate grounds that it will balloon the federal deficit. But, of course, that has only indirect bearing on the separate objection--much beloved by Republicans--that pricing carbon will be tantamount to a consumer tax. House Republicans in particular are fond of the canard that a cap and trade bill will cost the average household over $3,000.
Well, a more thorough CBO scoring reveals that they were only off by about a factor of 18.
[T]he Congressional Budget Office (CBO) estimates that the net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion--or about $175 per household. That figure includes the cost of restructuring the production and use of energy and of payments made to foreign entities under the program, but it does not include the economic benefits and other benefits of the reduction in GHG emissions and the associated slowing of climate change. CBO could not determine the incidence of certain pieces (including both costs and benefits) that represent, on net, about 8 percent of the total. For the remaining portion of the net cost, households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245.
Interestingly, this tracks pretty well with the findings of John Reilly, the M.I.T. environmental economist whose analysis Republicans distorted to arrive at the misleading $3,000 figure.
Back in April when that controversy was still live, a spokesman for House Minority Leader John Boehner told me Republicans would revisit their talking points if new facts came to light. I'll let you know if they plan to stand by that pledge.
Josh
Matt
Eric
Brian
It's nice to start the week with a good belly laugh. Thanks.
June 22, 2009 10:16 AM | Reply | Permalink
Kevin Drum has a more detailed look at the numbers. How long before some R claims that the Waxman-Markey bill will cost families "up to $1400", according to the CBO?
June 22, 2009 10:44 AM | Reply | Permalink
I'll take any odds you offer. Because, according to GOP SOP, what they're really going to do is completely ignore this revision and keep quoting the over 3K number over and over and over again until someone in the MSM repeats it, at which point, they'll cite back to the MSM reptition as their source for their 3K number. This revision? Down the memory hole.
June 22, 2009 12:56 PM | Reply | Permalink
Absolutely. They did this on the stimulus debate, they're going to do it again.
June 22, 2009 2:35 PM | Reply | Permalink
Great start to the week I guess. In fact maybe this means Hodgeman was right about the whole "nerd" thing, I mean here we have the "nerds", from the CBO, crunching the numbers and getting at $175 dollars per household where as the "jocks, aka GOP are "... off by about a factor of 18" with there $3000 per household number.
Is it possible for every reporter to ask the congressman who use the $3000 number where they got there information from? I mean if you ask and he/she says he/she got it from the MIT study, can you then ask if he/she knows that the author of that study says that his study does not support that number? Whether he/she is aware of that fact or not, I believe it is a very important context/caveat to the same old line that moderates and conservatives have been using for decades to see any large changes in our status quo energy markets.
June 22, 2009 10:47 AM | Reply | Permalink
These "preliminary" estimates from the CBO are getting to be a huge political problem in and of themselves. Consistently, they issue a SWAG based on incomplete data and then throw in a gigantic fudge factor that errs on the side of caution--caution meaning overestimating cost and underestimating benefits.
That's great from a bureaucratic CYA standpoint, but it means they automatically generate numbers that are custom made for Republican talking points. Because the MSM is so overwhelmingly "wired Republican" and incapable of calling bullshit, that ends up meaning that the "preliminary" number continues to drive the debate long after its been corrected.
Thus, for example, CBO's "preliminary" 1.7 trillion dollar cost estimate for health care reform, which is another number they basically pulled out of their asses and fudged upward to cover them, will keep driving the debate even after CBO revises it downward based on actual data. And the MSM will keep repeating in favor of the revised number it because the mere use of the word "trillion" by a Republican stuns them into a permanent state of heightened stupidity.
June 22, 2009 1:06 PM | Reply | Permalink
wake me up when the GOP has to seriously pay a political price for their gargantuan overinflated figure
at this point, one can dredge up a ton of stuff -- such as how Democrats were demogogically scaring seniors with notions that the GOP at core had a 'hey hey ho ho social security has got to go' attitude, or the figures for myriads of environmental policies in the past, and what has actually happened. Even where these things are pointed out in the MSM, it is only in passing, and IOKIYAR
June 22, 2009 6:59 PM | Reply | Permalink