Obama’s Energy Budget: More Taxes, Higher Prices

Here is the interesting policy of President Barack Obama on Energy Budget. The more complete article is as follows:

President Obama recently released his budget blueprint, “The New Era of Responsibility,” which outlines his spending plans for Fiscal Year 2010 and beyond.[1] Aside from providing general levels of federal spending, the blueprint foreshadows much of the President’s policy agenda. The budgets for the Department of Energy (DOE), the Department of the Interior (DOI), and the Environmental Protection Agency (EPA) reveal that the President has a costly and economically harmful vision for energy policy.

While the DOE and EPA both get budget increases, the DOI’s budget is reduced. The budget top-lines, however, are not the story: The real issue is how the money is spent and the policy implications thereof. Despite President Obama’s rhetoric about advancing the interests of America’s middle class, his policies will cost Americans more money, limit their access to America’s energy resources, and provide little, if any, environmental benefit.

The Environmental Protection Agency

The EPA’s budget has averaged $7.6 billion over the past three years, and it will increase slightly to $7.8 billion for 2009, but President Obama plans to increase it significantly to $10.5 billion in 2010.[2] The budget is being increased for policy goals that are disturbing, including a cap-and-trade program and an expansion of Superfund.

Sets the Stage for Cap-and-Trade. By far, the most onerous element of President Obama’s budget is that it would institute his CO2 cap-and-trade proposal to reduce carbon emissions 14 percent below 2005 levels by 2020 and approximately 83 percent below 2005 levels by 2050.[3] The program would auction 100 percent of available carbon emission credits and use the revenue to fund other aspects of his budget.

While the budget blueprint euphemistically refers to this money as “climate revenue,” in reality it is an energy tax that would force consumers to pay higher energy prices. In the blueprint, $646 billion of revenue would be generated through a cap-and-trade plan from 2012 through 2019, but many have suggested these auction permits would likely be much higher. The Heritage Foundation’s Center for Data Analysis’s estimate of climate revenue for 2012–2019, using less strict Lieberman-Warner caps, is between $1.6 trillion and $1.9 trillion, which results in even higher taxes on the consumer.

Of the $646 billion, $150 billion of this tax revenue would be allocated for clean energy investments a decade. This is old, tired thinking: The notion of government investing in clean energy technologies through tax breaks, incentives, and subsidies is tantamount to Washington picking winners and losers, which penalizes successful sources of energy that Americans use every day to subsidize unsuccessful ones. (More)