As expected, the Obama administration announced a proposal Monday drastically reducing carbon emissions at existing power plants. The goal is 30 percent by 2030 compared to 2005 levels. Ironically, considering the supposed priorities of this administration, the reductions will affect lower-income Americans the most.
Diana Furchtgott-Roth, a former chief economist at the U.S. Department of Labor and a senior fellow at the Manhattan Institute, stated that Americans in the lowest fifth of the income distribution spend 24 percent of their income on energy, compared to 4 percent for those in the top fifth. The proposal, which will face stiff opposition in Congress, is a new version of Obama’s ‘cap and trade’ idea early in his presidency.
Furchtgott-Roth wrote in Real Clear Markets, "Obama's new proposed cuts in carbon emissions, in the form of 'cap-and-trade' proposals that were rejected by the Democratic House and Senate in the first two years of his presidency, will raise the cost of energy, particularly electricity, and hit the poor hardest.”
The proposal may be a death sentence to many Democrats running for office this November from coal producing states including West Virginia and Kentucky. Obama’s untimely idea would mandate every state to meet the emissions target , reducing consumer demand because of added costs or investing in renewable energy sources.
The idea of more Solyndra-type investments at taxpayer expense in alternative energy’s infancy is a serious threat to the nation’s economy – at least initially. Electricity from solar power is twice as expensive as from natural gas. The nation’s poor will bear the brunt.
The question becomes, is this move for the good of the country or to appease the president’s far-left base? Has this been thought out or is it an election ploy in a year many fell will be a disaster for Democrats? New coal plants will cost billions of dollars a year for consumers – many will close, according to Furchtgott-Roth.
That will lead to massive job losses in coal mining, oil and gas extraction, gas utilities, and petroleum refining, according to the Congressional Budget Office.
Naturally, Kentucky Senator and minority leader Mitch McConnell describes Obama's plan "a dagger in the heart of the American middle class." Not suprisingly,
McConnell’s Democratic opponent this November, Kentucky Secretary of State Alison Lundergan Grimes, concurs. She ridiculed the proposal as "more proof that Washington isn't working for Kentucky," NBC News reported.
It is further pointed out by Furchtgott-Roth that energy company expenditures will play havoc with prices on domestic goods. That will allow foreign producers (China) to undercut American producers further than they already do.
More jobs offshore should be Obama’s biggest concern. Furchtgott-Roth warns, "For those concerned about economic growth, poverty, and inequality, cap-and-trade makes no sense, either nationally or regionally."
Yet for the president, it means a happy political base in the short term and possibly a better turnout for an election that may bring Democrats to their knees losing the Senate and scores of House seats.
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