Obama administration puts $1,761 per household price tag on cap and trade

Public statements by the Obama administration on the cost of
cap and trade legislation are quite different from what their
internal documents estimate.

In newly released documents, the U.S. Department of the Treasury placed a hefty price tag on what the Obama administration's desired cap and trade legislation would cost American taxpayers. The documents would seem to go completely counter to estimates the Obama administration had previously provided and in fact exceed them considerably.

The document shows that the cap and trade climate change legislation the administration desired would be a financial boon for the federal government that “could generate on the order of $100 to $200 billion annually.” At $200 billion, that is a staggering cost of $1,761 per American household. In a story about the document release CBS News said that is “the equivalent of hiking personal income taxes by about 15%.”

• See the U.S. Department of the Treasury document below

The document goes on to say that, “Economic costs will likely be on the order of 1% of the GDP, making them equal in scale to all existing environmental regulation.” This would mean a doubling of the current cost of environmental regulation in one fell swoop.

The Competitive Enterprise Institute obtained the documents via a Freedom of Information Act filing and while they provide a great deal of information about the real costs of cap and trade legislation, the government chose to redact some seemingly significant passages.

One such passage discussing the program says, “it will raise energy prices and impose annual costs on the order of [XXXXXX]. The redacted portion would appear to be a number which the Obama administration does not wish to share. Given the context, that number may be significant in financial terms.

Later in the document large portions of a section titled “Key Challenges” are blacked out. Further, when discussing the revenue generated by the tax program, the document says, “One advantage of auctioning allowances is the potential for generating large revenues [XXXXXX]….”

The redacted parts of the document would indicate the administration would rather not let the specific costs to taxpayers and federal income gained by their desired legislation be publicly acknowledged.

• Edit: 9/17/09, 1:09pm MDT - Edited for clarity in regards to the evaluation referring to the Obama administration's originally desired cap and trade program, not the one that passed the House of Representatives.  See comment section below.

U.S. Department of Treasury cost evaluation of cap and trade