Domestic Energy

Floor Speech

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Mr. FLEMING. Well, I thank the gentleman from Illinois. I also thank the gentlelady from Tennessee for her remarks. I certainly agree with everything she has said this evening. And perhaps I have a couple more things to add.

Mr. Speaker, there are no two ways about it: this is a revenue-boosting or a net tax system by any way you look at it. The experts have looked at it, economists and energy people. I guess you could call it cap-and-trade with a little C for the ``cap'' and a big T for ``tax.'' What do I mean by that? Well, what is the cap-and-trade or what we call the ``cap-and-tax?'' Basically, it says that there are factories out there that can burn coal or emit CO

2 into the atmosphere as long as they can find somebody else by way of allotments who are perhaps under the threshold by taking that burden from them. And in the process, there is some sort of exchange of currency.

Now what kind of currency are we talking about? Well, it is estimated, at least at this point, and we don't have details as often we don't get on these things, of $646 billion of net taxation to our economy. So again, let there be no mistake about it. This is a tax.

Now, what effect will it have on us Americans? Well, first of all, we know it is going to increase unemployment because as the tax burden is put on the factories and as it is put on power plants, there will have to be a movement of factories and other things offshore or to other countries who are not part of this program. We also know that it hits the poor. And it is also going to lower the overall standard of living.

Well, here is just a couple of facts that I would like to share with you, Mr. Speaker. A recent MIT study shows that cap-and-tax will cost the average American household $3,100 a year. Now, I know there has been some controversy about this. And it is my understanding that the MIT people went back and said, we were wrong on that; it is more than $3,100.

Another study shows that we are likely to lose three to four million American jobs if this is enacted. Companies who are looking to invest in our economy will simply move overseas, as I said. There is also a debate about whether it will create a stimulus. For the last few months, we have been talking about how important stimulus is to our economy. Well, this will definitely stimulate an economy. It will stimulate other countries' economies while hurting our economy.

Now all of this perhaps would be a theoretical and perhaps a hypothetical discussion except for the fact that cap-and-trade is not really a new concept. They have had it in Europe for years. This morning I heard Dr. Gabriel Calzada talk about this. This gentleman is from Spain and an expert in this area. So what is the Spanish experience in this, Mr. Speaker? What Spain found was that for every green job that was added, and again, I'm not exactly sure what a ``green job'' is, but for every green job, there was a loss of 2.2 jobs. In the so-called ``green jobs'' it was found that 90 percent of these jobs were in the implementation or construction. And these jobs were quickly dissipated as soon as the construction was ended. So what is the current unemployment rate of Spain? Seventeen and a half percent.

Now there was also a discussion by a very interesting expert in microeconomics. Aparna Mathur is her name. And I would like to read some very interesting facts into the Record: ``These higher costs of production by cap-and-trade will translate to higher energy and product prices. In a paper that I co-authored with my colleagues at the American Enterprise Institute, we estimate that a cap-and-trade system, with a $15 permit price, will increase the cost of everything, from food, clothing, shoes and home furnishings by 1 percent, of gasoline 7.7 percent, electricity 12.5 percent, and natural gas 12.3 percent. Of course, as previous experience with cap-and-trade programs has shown, permit prices are likely to be extremely volatile and rising over time, and our $15 price estimate is likely to be conservative. Other studies suggest that the price could be above $50 in 2015, close to $100 in 2030 and $200 in 2050. We can safely project that our estimates will be some multiple of these higher prices.''

Now, also she points out something else, and that is this: as a percent of the total home budget for poor people, electricity is 4 percent, whereas for richer, more wealthy people, upper middle class perhaps, it is only 1 percent. Therefore, the burden to a low-income person is going to be four times that of someone of higher income. So what does this do in net effect? What it does is it hits the poor first and worst. How else does it hit the poor and how else does it hit everyone else? Well, we know that all the costs have to be passed along to the consumer. So as Dr. Mathur pointed out, we are going to see inflation in the cost of everything we do because everything we have today in terms of products, and even services to some extent, are dependent upon energy cost. And certainly it is going to create unemployment, because if this system were implemented worldwide, perhaps it would be an even playing field. But that is not the case. We know that for everything we do, we have China and India that is reversing that tremendously in terms of the impact on the environment. And while their economies are growing rapidly, ours will be diminishing related to this.

So the net effect of that, Mr. Speaker, is that if we move forward with this crazy plan, we are going to see both middle class and lower-income people hurt the worst. We are going to see an overall lowering of life styles. We are going to see ourselves less productive and less competitive around the world.

And that is going to relegate to actually a net loss in jobs.

So I call upon my colleagues in our discussion this evening--and hopefully this bill won't even come to the floor. But if it does, I ask my colleagues, Mr. Speaker, to vote ``no'' on this wasteful bill that is really, in my opinion, just another Trojan horse, a way of generating revenue to pay for new social programs and perhaps even newer social programs that are yet to be determined.

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