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Regional & National

Republicans puff up impact of a cap-and-trade program on the average family's energy costs

June 2nd, 2009 12:00 am by Staff Report

According to FactCheck.org leading Republicans are claiming that President Obama's proposal to curb greenhouse gas emissions would cost households as much as $3,100 per year. The Republican National Committee calls it a "massive national energy tax." But the $3,100 figure is a misrepresentation of both Obama's proposal and the study from which the number is derived.

Republicans say they base their figure on a study from the Massachusetts Institute of Technology. But one of the authors says that the GOP's use of the study is "simplistic and misleading" and that it ignores key provisions designed to cushion the impact on consumers. The author puts the true added cost of a cap-and-trade system at closer to $800 a year.

Obama himself once said energy costs would "skyrocket" under his plan, but the GOP's partisan claim of a $3,100 per household cost increase is far higher than figures produced by other studies. The Environmental Protection Agency estimates the average cost per household to be between $98 and $140 per year, based on the Democratic cap-and-trade bill working its way through the House. Even the conservative, pro-Republican Heritage Foundation figures the average family would see its energy bill increase by $1,500 a year, less than half what the GOP claims. A Congressional Budget Office expert recently estimated the cost per household at an average of $1,600 a year, but that figure doesn't account for energy rebates Obama has proposed giving to consumers. If the government did use revenue from cap and trade "to pay an equal lump-sum rebate to every household," the CBO expert said, "lower-income households could be better off."

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