Gas to go up by $1.60, electric up 80%

iVillage Member
Registered: 02-19-2008
Gas to go up by $1.60, electric up 80%
3
Tue, 03-03-2009 - 11:13pm

It's not easy being green. I looks like we will get a cap and trade system which may raise the cost of gas by $1.60, and electric rates by 80%. The good news is it will provide an $800 per year rebate to low income families (a sort of reverse income tax). I guess these fees aren't part of any tax, so President Obama is technically keeping his word.

While we cripple ourselves with self imposed fees, other countries which don't will have a tremendous industrial advantage over us. How can we compete when we make our costs so artificially high?

Story follows - http://www.washingtonpost.com/wp-dyn/content/article/2009/03/03/AR2009030303322.html?hpid=topnews

Obama Officials Defend Budget

Republicans Criticize Tax Increases, Plan to Cap Pollution

Two of the administration's top economic officials defended President Obama's $3.6 trillion budget plan yesterday, arguing that the proposal would finance a historic investment in critical economic priorities while restoring balance to a tax code tipped in favor of the wealthy.

Rebutting Republican charges that the plan would raise taxes on a broad swath of Americans, White House budget director Peter R. Orszag and Treasury Secretary Timothy F. Geithner said the tax increases -- aimed primarily at business and a few million families who earn more than $250,000 a year -- are essential to reducing record budget deficits bloated by financial-sector bailouts and federal spending to prop up the economy.

"This is a deep moral imperative to make our society more just. But it's very good economic policy, too," Geithner told the House Ways and Means Committee, emphasizing that none of the tax hikes would take effect "until we are safely into recovery" in 2011. "It will make our nation stronger and not just more just."

Republicans countered that high earners are not the only targets of Obama's budget proposal: His plan to raise $646 billion over the next decade by auctioning off pollution permits to industries that generate greenhouse gases would increase the cost of gasoline, electricity and other forms of energy for every U.S. consumer, regardless of income, they said.

While Obama proposes to use some of the profits from that so-called cap-and-trade program to finance a permanent tax credit of up to $800 a year for working families, Rep. Dave Camp (R-Mich.) said the value of the tax cut would pale in comparison to rising energy costs.

"The 20 cents an hour you might get under the 'Make Work Pay' credit would barely cover the added $1.60 per gallon EPA says gas could cost, let alone the potential for an 80 percent jump in electricity rates," said Camp, the senior Republican on the Ways and Means Committee.

Geithner and Orszag, testifying separately before the House Budget Committee, both defended the proposal as a critical step toward reducing the effects of global warming. But even some Democrats are worried about the impact of a cap-and-trade system and are urging that the money raised through permit auctions be returned to consumers.

Some Democrats also joined Republicans in complaining about another tax provision: a proposal to reduce the value of itemized deductions for charitable contributions and other items for high-earning families. Rep. Shelley Berkley (D-Nev.) called the proposal "a nonstarter," telling Geithner: "I'd like to think that people give out of the goodness of their hearts, but that tax deduction helps to loosen up their heartstrings."

Outside the hearing, Berkley said the proposed tax increase was "the number one issue" on the minds of her constituents over the weekend. Reminded that the provision is intended to raise hundreds of billions of dollars to finance an expansion of health insurance coverage, Obama's top domestic priority, she said: "We can find another way."

Despite those and a few other contentious issues, Obama's budget request was generally well-received yesterday, as lawmakers took their first opportunity to comment on an agenda that many have described as the most ambitious and transformative since the dawn of the Reagan era. Democratic budget leaders said they are likely to endorse most of Obama's proposals sometime in April in the form of a nonbinding budget resolution. That document, which does not require the president's signature, sets goals for spending and revenue that must be enacted separately.

Republicans and Democrats praised Obama for delivering an honest assessment of the nation's finances that acknowledges that Congress will never permit the alternative minimum tax to collect billions of fresh dollars. Meanwhile, Obama's budget includes the projected cost of the Iraq war, a big-ticket item left off the books by former president George W. Bush.

Rep. Paul D. Ryan (Wis.), the senior Republican on the House Budget Committee, also complimented the administration's proposal to charge wealthier families more for prescription drug coverage under Medicare, the federal health program for retirees, and to "stop subsidizing" agribusiness.

But Ryan and other Republicans accused the administration of using budgetary maneuvers to inflate projected savings and minimize future budget deficits. They also blamed Obama for the budgetary fallout of the recession he inherited, accusing him of running up a record $1.75 trillion this year and of plans to double the national debt by 2014.

Orszag countered that the nation would be in even worse shape if Obama had not proposed pouring billions into a stimulus package, a collapsing housing market and a paralyzed financial system. And "contrary to the analysis of many pundits, this budget is not a big-spending budget," he said. "Unlike what has occurred in the past, we pay for our new initiatives in education, in energy and in health care."

Federal Reserve Chairman Ben S. Bernanke, also appearing on Capitol Hill yesterday, defended running large government deficits in the next couple of years, and said even more money might be needed to stabilize the financial system. In the long term, however, Bernanke said the nation must rein in its annual deficits, which are projected to drive the national debt held by private investors to nearly 70 percent of gross domestic product, its highest level since the 1950s, up from about 40 percent before the financial crisis.

"It's very hard to know" how much higher the nation's debt load can rise "before the international financial markets begin to balk," Bernanke said. "And so I think the prudent thing to do is to try and maintain stability."

iVillage Member
Registered: 03-18-2000
Wed, 03-04-2009 - 8:25am

"Republicans Criticize Tax Increases, Plan to Cap Pollution"


Of course they are.


Do any Republicans have any good suggestions for getting out of this financial mess or preventing further pollution? They had 8 years to accomplish their ideas.


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Photobucket&nbs

iVillage Member
Registered: 03-03-2009
Wed, 03-04-2009 - 5:49pm

We had years of cheap energy and indiscriminate consumption. Real costs weren't always immediately evident (foreign policy geared to ensure easy access to oil, acid rain, infrastructure costs associated with automotive travel and suburban sprawl).

The idea that we are somehow crippling ourselves strikes me as odd. Maybe the best analogy (particularly considering the verb "crippling" of the OP) is that of a person with an old, poorly healed limb injury. The limb doesn't work well and is straining other joints. The only way to relieve the strain on other joints is to re-break and properly heal the fouled one. Hurts like crazy for a short period of time but when the bone has knitted together as it ought, all the other parts of the body begin to feel better as well.

Cap-and-trade isn't a perfect idea. But it's a compromise which MIGHT work over the long haul. Cripple ourselves? Perhaps you have not looked at the cost of energy in Europe or Asia! Generally speaking, their costs are MUCH higher. And EU communities are having a much harder time dealing with the global recession than we--according to PBS their banks and lenders were much more heavily leveraged. http://www.pbs.org/newshour/bb/business/jan-june09/globaleconomy_03-03.html




Edited 3/4/2009 5:53 pm ET by jabberwocka

Jabberwocka

iVillage Member
Registered: 08-30-2002
Wed, 03-04-2009 - 10:42pm
Actually, I had expected the gas prices to go up the day after the elections. I've found the current low prices, after last years high prices to be a pleasant and unexpected bonus that I didn't count on lasting for the long term. I didn't go back to my old driving/heating/cooling ways, but stuck with the conservation methods I had put in place when they were so high. Honestly, are we so stupid that we need to be wacked over the head with a 2X4 to understand we need to change the way we do things? Apparently, the only way we will make lasting changes is if we are forced to, by it being made too u ncomfortable and/or expensive to go on endlessly