Officials at the Treasury Department think cap-and-trade legislation would cost taxpayers hundreds of billion in taxes, according to internal documents circulated within the agency and provided to The Washington Times.
These estimates were made in Treasury memos, obtained by the Competitive Enterprise Institute through a Freedom of Information Act request that sought information related to proposals originated by Treasury involving “cap-and-trade schemes” that deal with “carbon,” “carbon dioxide” or “greenhouse gases.” The memos were given to The Times by CEI.
The House narrowly passed cap-and-trade legislation earlier this year, and now the Senate stands poised to take up its version of the bill at any time, although it has been largely overshadowed by health care reform efforts. The ultimate cost of the bill to taxpayers has been the subject of fierce debate between supporters and opponents of the legislation. CEI, a free-market think tank that opposes the bill, thinks the Treasury documents prove the legislation would pose a significant burden to the economy.
A memo prepared by Judson Jaffe, who works in the Treasury’s Office of Environment and Energy, referenced President Obama’s remarks on energy policy in his State of the Union Address and said, given the president’s plan to auction emissions allowances, “a cap-and-trade program could generate federal receipts on the order of $100 to $200 billion annually.”
These figures differ from other cost estimates for the legislation produced more recently by the Environmental Protection Agency and the Department of Energy.
“These are candid, internal discussions of what they are telling each other and what they won’t tell you,” said Christopher C. Horner, a CEI senior fellow who filed the request.
“The words cap and trade were chosen for a reason, and that is to avoid a vote on tax,” said Mr. Horner, who also is the author of the New York Times best-seller “The Politically Incorrect Guide to Global Warming.” “This memo tells you it’s a tax. Why else are they discussing hundreds of billions of revenue to be taken from the taxpayer?”
Other cost estimates and “key challenges” laid out in Mr. Jaffe’s memo were redacted. Mr. Horner said he intends to litigate against the department in order to have that material released.
The office that issued these memos is relatively new. Former Treasury Secretary Henry M. Paulson Jr. created it in August 2008, during the Bush administration. However, Mr. Horner said Treasury has “no authority” to manage such programs, but created the office “hoping it would come.”
Treasury said, in the memos, it justifiably created the energy office because “as the lead U.S. agency supporting economic prosperity and financial security, Treasury is uniquely positioned to provide the executive branch with informed and credible policy options to address these issues, to implement chosen options in its areas of operational responsibility, and to communicate those choices to Congress, foreign governments, international institutions, as well as stakeholders in the business community and civil society.”
Included in the 10 pages of memos released to Mr. Horner by Treasury were several detailed discussions about how Treasury could properly regulate the carbon market.
One unsigned memo titled “carbon market oversight issues” distributed during the transition period between the Bush and the Obama administrations proposed the creation of a “Carbon Fed” to manage carbon allowances in a way similar to the way the Federal Reserve regulates the supply of money.