Democrats' Energy Bill Adds Gasoline Tax

Senators John Kerry and Joe Lieberman unveiled a new energy bill on Wednesday which includes a new tax on gasoline, but the overall measure drew sharp criticism from both sides of the aisle.

“My first reaction to the Kerry-Lieberman bill is that it’s the same old cap-and-trade scheme that the Senate has defeated three times since 2003,” said Sen. James Inhofe (R-Okla.), top Republican on the Senate Committee on Environment and Public Works. “In fact, it has a strong resemblance to the disastrous Waxman-Markey bill.  Only now, along with paying skyrocketing electricity prices, consumers will pay a gas tax.” 

“The Kerry-Lieberman cap-and-trade proposal is just like Waxman-Markey in another key respect: it will destroy millions of good-paying jobs, many of which will be lost in regions, such as the Midwest, South, and Great Plains, which depend on coal for electricity,” Inhofe said.  “Given these facts, it’s no wonder that this massive energy tax is opposed by Republicans and Democrats alike, and that is has virtually no chance of passing the Senate.”

Environmental groups objected to provisions that would bar states and the Environmental Protection Agency (EPA)  from levying their own carbon cap schemes, reimbursing states for measures they may have already taken to implement. 

The bill offers tax incentives and revenues for states that allow new offshore drilling, allowing coastal states to veto any offshore drilling within 75 miles of the coastline.

Provisions in the Kerry-Lieberman bill include:

A new national tax on gasoline.

Initial carbon caps for power plants expanding to include industrial plants by 2016.

Carbon trading markets which set a “hard-price collar” of between $12 and $25.

Authorizes $54 billion in taxpayer loan guarantees for new “green” industrial plants.

A politically driven consumer rebate scheme Democrats will try to claim blunts the massive impact to taxpayers.

A carbon capture-and-storage scheme providing billions of taxpayer dollars to devise — including $2 billion a year in research and development.

Rep. Joe Barton (R.-Tex.), top Republican on the House Energy and Commerce Committee, said to chalk him up as a skeptic.

“Its authors say their new bill isn’t warmed over cap and trade, but there aren’t many differences between Waxman-Markey and Kerry-Lieberman where it counts — government-set prices on CO2, sweetheart deals for supportive industries and states with their own fledgling cap-and-trade systems, and economic punishments for anybody who doesn’t get with the program,” Barton said.  “And just like with Waxman-Markey, we’ll need to crash dive the economy back to something resembling the 1870s in order to reach the anti-global warming targets that Kerry-Lieberman sets for 2020, 2030 and 2050.” 

Rep. Jim Sensenbrenner (R-Wis.), ranking Republican on the House Select Committee on Energy Independence and Global Warming, said the bill is “spin or rebranding.”

“Both Waxman-Markey and Kerry-Lieberman have the same proposed cap on U.S. carbon emissions. Both measures include provisions that will raise the cost of carbon emissions on industry, and thus, the cost of energy. This amounts to a hidden tax on energy that every consumer will pay,” Sensenbrenner said.

“Despite what the authors say, there’s both a cap and a tax in this bill, and it will hurt the U.S. economy,” Sensenbrenner concluded. “Americans need Congress to set an energy policy that focuses on developing new technology, improving energy efficiency and maximizing domestic energy production, not one that sets unrealistic goals and levies unaffordable taxes.”

Sen. Lindsey Graham (R-S.C.) was the lone Senate Republican initially working on this do-over.  He backed out when Democrats said they wanted to rush through immigration legislation prior to the national energy and gasoline tax.