Martha's Blog

Are Democrats Using the Oil Spill to Push Cap and Trade?

“You never want a serious crisis go to waste.”  These were the words spoken by President Obama’s Chief of Staff, Rahm Emanuel, when the credit crisis occurred last year. 

The Democrats in Congress, led by House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid and with the encouragement of President Obama and Rahm Emanuel, pushed through an overhaul of “reforms” of the financial sector.  Like many of their other reform plans, the financial overhaul didn’t really do much to improve or address the problems that the system truly faces – but it did provide the liberals in Washington with an excellent opportunity to push their agenda through Congress.

Now, with the oil spill in the Gulf of Mexico, the Obama administration and their allies are using this crisis to push for a cap and trade scheme. 

Cap and Trade, which passed the House last year, essentially creates limits (or caps) on emissions.  The federal government then creates a market where it auctions emission allowances to various companies.  Companies who go over their purchased limit are fined, and companies who are under their limit can sell the remainder to other companies.  Each year, the government would decrease the cap on emissions, forcing companies to reduce their emissions.

What does this mean for you, the consumer?  In Alabama it’s estimated that consumers will lose $472 million.

As the government forces reductions on total emissions, two things will happen that that will force energy prices to rise:

• Companies will be forced to completely change their plants and manufacturing processes to create fewer emissions.  For the businesses that survive, this process will be extraordinarily expensive, and the costs will be passed on to the consumers via higher prices for products and services.  Some businesses may even be forced to move their operations overseas in order to keep product prices low, costing Americans hundreds or even thousands of jobs.
• The cost of emission allowances will increase exponentially.  While the government decreases the cap on emissions, the steady demand for individual units will cause prices to increase.  The companies who win these bidding wars will pass on their costs to consumers via higher prices for products and services.

We should not be passing legislation that kills jobs and creates uncertainty for businesses, especially not at a time when unemployment is hovering around 10%.

The Obama administration and Nancy Pelosi won’t let a crisis occur without using it to further their liberal agenda, and this one is no different.