US deficit will be over USD2.5 trillons unless Congress limit current economic policy. Obama is trying to pass his new Carbon Credit program for the US. The impact of this program will be significant for US companies, agriculture and fiscal deficit.
It is not well understand yet how the program will inffluence the different areas and this a complex problem to be solved. The program is called Credit and not Tax. However is it really a Credit for US companies or a Tax? The program describes that USD 800 billions will be available as credits of carbon in the next ten years and this will be an income in the country budget.
If US government cannot get the program passed it will increase its future deficit. If the program is passed, who will pay this Credits? If US companies pay it, they will become less competitive and will significantly increase their costs. I do not think that China, India or Brazil will approve the same legislation and this will decrease cost competitiveness for US against this countries. Every day China is opening new factories based on carbon energy.
A quick clipping on the recent news of the new initiative
Bloomberg writers Daniel Whitten and Simon Lomax reported yesterday that, “Democrats on a U.S. House panel said they reached an agreement that will let legislation to limit greenhouse-gas emissions win committee backing next week.“Democrats control the House Energy and Commerce Committee by 36-23, so an agreement among party members would allow them to approve the measure over Republican.
“President Barack Obama has backed a market-based cap, while business groups such as the U.S. Chamber of Commerce said such a plan would raise energy costs and harm the economy.” Reuters writer Richard Cowan reported yesterday that, “Democrats in the U.S. House of Representatives on Thursday said they were working out final details of a climate change bill, as they announced new breaks for industry that they said would also minimize the potential impact on consumers’ energy bills.”“The result is a bill that tries to dampen the short-term impact on companies and thus energy prices. For example, the retooled legislation would lower the price of future pollution permits that industry would have to buy, give more rewards for companies that take added steps to corral carbon emissions and give some firms a couple decades to fully transition into the program.
“The chairman of the committee, Representative Henry Waxman, said his panel will debate and pass the bill by the end of next week. That would clear it for other House panels to consider before a debate by the full House, probably by August.“The legislation faces more uncertainty in the Senate.”
A news release issued yesterday by the House Energy and Commerce Committee Republicans noted that the public knowledge regarding “cap and trade” is low.
Citing a Rasmussen report from Monday, yesterday’s release stated that, “The gap between Capitol Hill and Main Street is huge when it comes to the so-called ‘cap-and-trade’ legislation being considered in Congress. So wide, in fact, that few voters even know what the proposed legislation is all about.
“Given a choice of three options, just 24% of voters can correctly identify the cap-and-trade proposal as something that deals with environmental issues. A slightly higher number (29%) believe the proposal has something to do with regulating Wall Street while 17% think the term applies to health care reform. A plurality (30%) have no idea.”
And, in an opinion item published in today’s Wall Street Journal by Indiana Governor Mitch Daniels, he stated that, “The Waxman-Markey legislation would more than double electricity bills in Indiana.”
“President Barack Obama has backed a market-based cap, while business groups such as the U.S. Chamber of Commerce said such a plan would raise energy costs and harm the economy.” Reuters writer Richard Cowan reported yesterday that, “Democrats in the U.S. House of Representatives on Thursday said they were working out final details of a climate change bill, as they announced new breaks for industry that they said would also minimize the potential impact on consumers’ energy bills.”“The result is a bill that tries to dampen the short-term impact on companies and thus energy prices. For example, the retooled legislation would lower the price of future pollution permits that industry would have to buy, give more rewards for companies that take added steps to corral carbon emissions and give some firms a couple decades to fully transition into the program.
“The chairman of the committee, Representative Henry Waxman, said his panel will debate and pass the bill by the end of next week. That would clear it for other House panels to consider before a debate by the full House, probably by August.“The legislation faces more uncertainty in the Senate.”
A news release issued yesterday by the House Energy and Commerce Committee Republicans noted that the public knowledge regarding “cap and trade” is low.
Citing a Rasmussen report from Monday, yesterday’s release stated that, “The gap between Capitol Hill and Main Street is huge when it comes to the so-called ‘cap-and-trade’ legislation being considered in Congress. So wide, in fact, that few voters even know what the proposed legislation is all about.
“Given a choice of three options, just 24% of voters can correctly identify the cap-and-trade proposal as something that deals with environmental issues. A slightly higher number (29%) believe the proposal has something to do with regulating Wall Street while 17% think the term applies to health care reform. A plurality (30%) have no idea.”
And, in an opinion item published in today’s Wall Street Journal by Indiana Governor Mitch Daniels, he stated that, “The Waxman-Markey legislation would more than double electricity bills in Indiana.”
Phillip Langerlen, Ph for AgFood Think Tank
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