The Senate Finance Committee resumed discussion of climate change legislation Tuesday. The day's topic was the allocation of emissions allowances under a proposed cap and trade tax system. In his opening statement Ranking Member Chuck Grassley, R-Iowa, reminded members that the Congressional Budget Office has made clear that these allowances hold value and therefore represent federal revenues.
Some say there will be no net cost to the American people because the federal government is creating a commodity that holds value and can be sold to recoup the costs or even make money. According to Grassley this makes it sound as though we've stumbled upon the economic equivalent of the mythical philosopher's stone that can turn lead into gold. He was quick to point out there is no such thing as a free lunch and the government cannot create wealth through regulation.
Grassley cautioned this is not free money, rather he says it is a national energy tax on all Americans, one that will exacerbate the negative impact of other taxes on economic growth and jobs. The challenge, according to Grassley, is to mitigate as much as possible those painful effects on the American people.
Meanwhile in the House, 18 Ag Committee Republicans sent a letter to Committee Chairman Collin Peterson, D-Minn., requesting additional hearings on H.R. 2454, the American Clean Energy and Security Act. The legislation received a favorable House vote on June 26, but the 18 Republicans want it reviewed. In their letter they state the Speaker's accelerated schedule did not give the Committee sufficient time to properly consider the complex proposal.
The letter continues that there are a number of different analyses on cap and trade that show reductions in farm income reaching all the way up to 94% by 2035. And it is being reported that the Environmental Protection Agency is projecting this legislation would take 56 million crop acres out of production due to forestation. The Representatives believe as new information about H.R. 2454 continues to become available this legislation continues to warrant the Ag Committee's consideration as it will have far reaching effects on the agriculture community for generations to come.