These are challenging times, and our nation is at a crossroads. Our economy is ailing, unemployment is soaring, spending is out of control, and deficits are at record levels. And yet, rather than pursue sound policies that create jobs, the administration remains steadfast in its efforts to push ahead with its job-killing "cap-and-tax" scheme.
Nearly one year ago, the House first embarked on its cap-and-tax experiment. The carbon mandates under the House-passed bill would mean that the United States could not emit more in the year 2050 than we emitted in 1910, requiring us to scale back our emissions to a per capita level equivalent to that of the tiny coastal nation of Belize.
And despite near double-digit unemployment and an electorate growing more restless by the day, the Senate has picked up the administration's cap-and-tax torch with the recent introduction of the Kerry-Lieberman bill. Study after study has predicted cap-and-tax will result in skyrocketing energy bills and massive job losses, and Kerry-Lieberman puts a bull's-eye squarely on the backs of working families who are already struggling to keep the lights on.
Last September, with little fanfare, Treasury Department documents came to light that put the administration's projected annual costs associated with cap-and-tax in the hundreds of billions of dollars.
The bombshell documents were initially released in mid-September in response to a Freedom of Information Act request. However, Treasury blacked out vital analysis specifically related to the costs of cap-and-trade. Upon urging Secretary Timothy Geithner to release the documents in their entirety, Treasury finally acquiesced, and it became clear that by the administration's own calculations, cap-and-trade would have a devastating effect on our economy.
One particular Treasury document states cap-and-trade "will raise energy prices and impose annual costs on the order of tens (and potentially hundreds) of billions of dollars." Upon examination of the documents, CBS News pegged the annual cost at more than $400 billion a year.
How on earth can our economy absorb such a hit? Especially at a time when the Congressional Budget Office analysis of the president's fiscal 2011 budget forecasts a record $1.5 trillion deficit for 2010 and $1.8 trillion in tax increases through 2020. By 2020, the debt is predicted to surpass $20 trillion, an alarming 90 percent of the economy. Interest payments on the debt are expected to more than quadruple in the next 10 years, rising from $209 billion this year to $916 billion in 2020.
These long-term figures are of particular significance as the climate debate resumes this summer, as they do not reflect the costs associated with cap-and-trade. We could be in even worse financial shape than the CBO reports suggest.
Unfortunately, it seems that no one is listening to the economic alarm bells, as the administration is still moving forward with a $100 billion handout for developing nations to cut emissions. Where are our priorities?
We cannot allow Kerry-Lieberman to sell out American workers to the international community for a policy that will cost well over $1 trillion and eliminate countless more jobs with negligible, if any, global environmental benefit.
It is not just Beltway analysts or government officials who are forecasting exorbitant costs to families. In my corner of Michigan where the unemployment rate is nearly 15 percent, Consumers Energy conservatively estimates rate increases for families in excess of 38 percent over the next 15 years just to comply with cap-and-tax. Some Michigan manufacturers have also indicated they will cease operating during the daytime and solely operate at night when electric rates are cheaper.
Meaningful climate legislation requires global participation, especially that of India and China. Energy Secretary Steven Chu has said that if China's emissions of greenhouse gases keep growing at the pace of the past 30 years, the country will emit more in the next three decades than the United States has in its entire history.
Without international participation, jobs and emissions will simply shift overseas to countries that require fewer environmental protections, harming the global environment as well as the U.S. economy. Efforts to include the world's leading emitters — India and China — in the House bill last June were rebuffed.
As the administration has continued to ignore the concerns of working families in the climate debate, House Republicans listened and developed the "all of the above" American Energy Act that would reduce emissions, create jobs and keep energy affordable. A principal component of our legislation calls for the construction of 100 new nuclear reactors over the next 20 years. According to data from Oxford Economics, building 100 new nuclear reactors and an appropriate number of enrichment and reprocessing plants over the next 20 years would create more than 1 million jobs. Nuclear power is not only emissions-free, but renewing our commitment to nuclear would create countless jobs at a time when our nation endures near double-digit unemployment.
We have a unique opportunity and responsibility to both reduce emissions and preserve our economy. The American public is desperate for solutions that will boost economic growth, create jobs and protect the pocketbooks of working families. Jobs must be our top priority, not a national energy tax, and folks will be paying very close attention this summer and in November.
Rep. Fred Upton (R-Mich.) is the ranking member on the Energy and Commerce Subcommittee on Energy and the Environment.