In an attempt to — again — make their intention to raise consumers’ energy prices as explicit and obvious as possible, a handful of Senate Democrats this week announced legislation that would impose a carbon tax – an energy tax – on large companies.
This tax would, like all taxes, ultimately be paid by consumers. Because it is an energy tax, its ill effects would flow through the economy, increasing prices for everything made, transported by anything other than horses, and essentials such as gasoline, natural gas, and home heating oil.
The good news is that the Democratic authors of this measure have a plan. They plan to use the revenue from this energy tax – estimated at $500 billion, or about $4,000 per household — to offset some of the $3.5 trillion the Democrats intend to spend through reconciliation.
Keep in mind that pretty much all the survey data we have indicates that voters are willing to pay perhaps as much as $20 a year to address global warming.
It is yet another reason why senators considering the infrastructure legislation should vote against it.
As we have noted previously, President Biden, Senate Majority Leader Charles E. Schumer, House Speaker Nancy Pelosi, and even Sen. Joe Manchin III have explicitly connected the passage of infrastructure legislation to reconciliation. If the legislation currently before the Senate should fail to be enacted, it would greatly complicate the passage of any subsequent reconciliation.
More importantly, the Democrats very much want to have Republican fingerprints on some part of this mess. They know that if Republicans vote for anything in this process, it will muddy the waters in the 2022 and 2024 election cycles enough so that the current majority party can evade responsibility for the inflation, deficits, debt, fraud and other pathologies that will follow the infrastructure deal and reconciliation.
Thus, the anxiousness among Team Biden for a “bipartisan” deal. They are acutely aware that voters are not likely to be able or willing to distinguish between votes for the infrastructure deal and votes for reconciliation. Voters correctly understand that both votes – for the deal and reconciliation – expand the federal government’s reach and ultimately increase taxes.
At the same time, now that everyone has had a chance to skim the 2,700-page bodice-ripper that is the infrastructure legislation, it turns out that it has a few problems of its own. Everyone likes more and better roads and bridges; this is, after all, America. Unfortunately, the legislation as written probably will wind up funding fewer roads and bridges and more political constituencies and their particular boondoggles.
How can that be?
The legislation changes highway money’s distribution by taking away most of the authority concerning funding from states and localities and giving it to the U.S. Department of Transportation. Jeff Davis of the Eno Center for Transportation was clear to Politico: “If this [bipartisan infrastructure] deal holds, it would put just a staggering amount of money in the hands of [Transportation Secretary Pete Buttigieg] to distribute via [DOT’s] own selection of projects instead of the traditional formula-based distribution to states and cities.”
It seems unlikely that this was accidental or the product of the ever-popular “drafting error.”
Team Biden wants to control which roads get built where because that is genuine political power at the retail level. Some more bad news: The administration will not be eager to build new roads. They have made no secret that they intend to look at all transportation (and everything, really) through the lens of climate change.
What climate change doesn’t capture, “environmental justice” concerns will. Indeed, the legislation being considered by the Senate provides billions of dollars to tear down some parts of the interstate highway system (as a result of environmental justice concerns), without consideration of how those lost highway miles will be replaced or how their absence will complicate and retard interstate freight transport.
In short, in the new world created by the infrastructure legislation, transportation money will be routed toward projects that serve narrowly targeted political constituencies rather than the public good.
So, let’s review. A $4,000-per-household tax on energy. No new roads or bridges unless they serve the political purposes of the Biden administration. A sustained effort to ensure accountability for all of this and the inevitable resulting pathologies is substantially blurred.
No one can possibly be in favor of this mess.
• Michael McKenna, a columnist for The Washington Times, is the president of MWR Strategies. He was most recently a deputy assistant to President Trump and deputy director of the Office of Legislative Affairs at the White House.