Environmental Advocates Praise New Carbon Tax Bill

/PRNewswire-USNewswire/ -- Environmental groups and carbon pricing advocates lauded Representative John Larson (D-CT), who today introduced America's Energy Security Trust Fund Act of 2009, proposing a carbon tax to reduce carbon emissions and fight global warming.

The tax would take effect in 2009 and tax emissions at a rate of $15 per ton of carbon dioxide and increase by $10 each year (or by $15 each year if needed to keep emissions falling fast enough). It would be virtually revenue-neutral, with over 95% of carbon tax revenues used to cut payroll taxes to help Americans with higher energy prices.

"Congressman Larson has shown great leadership in introducing this bill and ramping up the debate on carbon pricing in this Congress," said Charles Komanoff, co-director of the Carbon Tax Center. "It's a debate we urgently need to have. President Obama took a big step forward in proposing carbon pricing in his budget. The strong consensus among economists is that a carbon tax is the quickest, most effective and most transparent approach. Now that we have a well-crafted carbon tax bill to work with (and more such bills in the pipeline), Congress will be able to compare the details of actual carbon tax and cap-and-trade bills, and debate them on the merits. As that debate unfolds, you'll see a groundswell of support and eventual consensus line up behind a carbon tax proposal like Rep. Larson's."

"Representative Larson is making an important contribution to the debate about how to reduce global warming pollution," said Brent Blackwelder, president of Friends of the Earth. "A key part of the solution will have to be a price on carbon. If passed, the bill introduced today by Representative Larson would establish this price, strengthening our economy and helping head off catastrophic climate change, while avoiding some of the pitfalls of previous bills that would have led to windfall profits for corporate polluters."

Unlike cap-and-trade proposals, the Larson bill calls for taxing carbon at the source, such as oil refineries and coal mines for domestic fuel, or shipping terminals for imported fuel. A total of $100 billion over the first 10 years, equivalent to three percent of the revenue, would be dedicated to tax breaks for clean energy, while another $41 billion, equivalent to one percent of the revenue (more in the initial years, less in later years) would be used for transitional assistance for workers in industries directly impacted by the carbon tax.

All of the remaining carbon tax revenue - over 95% - would be spent on cutting payroll taxes, offsetting increased energy prices for working families, and helping stimulate job growth. This would amount to a tax shift rather than a tax increase. In fact, most working families will actually come out ahead if they conserve energy modestly.

As chair of the House Democratic Caucus, Rep. Larson is the fourth-ranking Democrat in the House of Representatives and sits on the Ways and Means Committee, which will have primary jurisdiction over a carbon tax. At a hearing of the Committee held February 25 to compare the effectiveness of a cap-and-trade scheme vs. a carbon tax, NASA chief climate scientist James Hansen said, "This [carbon] tax, and the knowledge that it would continue to increase in the future, would spur innovations in energy efficiency and carbon-free energy sources... Carbon emissions will plummet far faster than with alternative top-down regulations."

America's Energy Security Trust Fund Act of 2009 is supported by Rep. George Miller (D-CA) who has co-signed a "Dear Colleague" letter announcing it. Additional carbon tax measures are being drafted by other members of Congress on both sides of the aisle, including Rep. Bob Inglis (R-SC).

Obama's Speech Filled with Rhetoric, Wishful Thinking, According to Fitzgerald Griffin Foundation Columnist, Robert Hale

/PRNewswire/ -- The Fitzgerald Griffin Foundation website, http://www.fgfbooks.com/, released a column yesterday critiquing 14 points from President Obama's speech on Tuesday. North Dakota attorney and builder, Robert L. Hale, takes the President to task for "wishful rhetoric" and his "clear misunderstanding of how markets work."

Some of Hale's 14 points include:

--The President said: "In order to save our children from a future of debt, we will also end the tax breaks for the wealthiest 2 percent of Americans." Hale comments: "Does it seem a realistic that two percent of Americans are going to pay off a federal debt estimated to be between $12 trillion and $19 trillion?"

--The President said: "We have done more to advance the cause of health care reform in the last thirty days than we have in the last decade." Hale replies: "What has been provided is health care insurance -- not health care reform. Nothing has been done to reform a health care system that is bloated by massive Medicare and Medicaid mismanagement.

--The President said: "...we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills." Hale replies: "As a builder for more than 30 years, I can state unequivocally this is a fiction. It is simply cannot be done.

--The President said: "I'm proud that we passed a recovery plan free of earmarks." Hale comments: "Yet news reports identified up to 9,000 earmarks in Congress' $410 billion omnibus spending bill."

--The President said: "The ability to get a loan is how you finance the purchase of everything... and [how] businesses make payroll." Hale responds: "Businesses do not make payrolls with loans. Those that do, don't stay in business; they fail."

For more than three decades, Mr. Hale has been involved in drafting proposed laws and counseling elected officials in ways to remove burdensome and unnecessary rules and regulations.

"For those who listened carefully and understand how sustainable jobs and prosperity happen, the President's speech was a terrible disappointment," Mr. Hale said.

Economic Stimulus Package Would Place Social Security Trust Fund in Deficit for First Time Ever Next Year

/PRNewswire-USNewswire/ -- The Congressional economic stimulus plan would place the Social Security Trust Fund into deficit for the first time ever next year, if the current economic stimulus package is passed by both Houses of Congress.

Social Security is funded by payroll taxes that employees and their employers pay into the system. Money that comes into the Social Security Trust Fund is used to pay the Social Security checks retirees receive each month, and since the creation of the Trust Fund in 1983, the program has always had more money coming in than going out.

However, that may change as soon as next year, due to a proposed refundable payroll tax credit which would offer workers a refund on their portion of Social Security taxes, meaning there would be insufficient cash to pay benefits. The $145.3 billion refundable payroll tax credit proposal would give individual workers up to $500 and couples up to $1,000.

According to the 2008 Social Security Trustees Report, the estimated surplus under "high cost," or bad economic conditions, is as follows:

Year Social Security Trust *Payroll Credit Costs,
Fund Projected Surplus Proposed Legislation
(Billions) (Billions)
2009 $54 $24
2010 $57 $80.8
2011 $43 $37
2012 $26
2013 $5

* Source: Joint Committee on Taxation


"A sufficiently funded Social Security Trust Fund is critical in ensuring that seniors don't have to endure benefits cuts," said Daniel O'Connell, chairman of The Senior Citizens League. "Although we recognize the economy is in bad shape, we don't think putting the Trust Fund into the red is a responsible response."

The Senior Citizens League is advocating for any decrease in payroll taxes to be taken from the general treasury, not the Social Security Trust Fund.