Waxman-Markey Deserves to Die

The economy-destroying measure ekes out a House victory.

Source: Wall Street Journal online

The fresh news about Washington–the White House and Congress–is that things are not going very well. A new president in full command of public-policy matters is having problems, from health care to taxes to massive federal spending and now to the Waxman-Markey bill, one of the oddest and most far-reaching pieces of legislation advocated by the new administration.

It passed the House a few weeks ago by a 219-212 vote–not much of a margin. Most interesting was the fact that of America's 50 state delegations in the House, 28 voted no and 22 aye, and one quarter of the 219 majority votes came from New York and California. Most of America's states and communities didn't much like the bill.

No wonder, for it would regulate many things–energy, wages, imported goods, corporations, states, cities, buildings and houses, snowmobiles, lawn mowers, light fixtures, candelabra base lamps and many others–while containing broad exemptions for regulation of agribusiness, ethanol and biofuels. The Waxman-Markey bill would be without question the biggest expansion of federal government control over our economy since the 1930s.

The Heritage Foundation concludes it would reduce America's real gross domestic product by $400 billion each year–a cumulative loss of $9.4 trillion by 2035–leading to almost 2.5 million job losses, and raise inflation-adjusted electricity rates by 90%. For a household of four, it would cost on average $2,979 annually and in 2035 the total family cost would be over $4,600 for everything, including power, food, supplies, gasoline and transportation.

Our federal government would have full control over global-warming matters. States would not be permitted to create their own cap-and-trade programs, but could be given emission allowances by the federal government which they could sell to generate funds for clean energy programs.

The federal government would also have control over the carbon permit process. It would give away 85% of the permits to utility companies, refineries and other politically connected businesses, and these no-cost permits could be used by companies to continue to crank out historically high CO2 emission levels, or be sold to other companies for real money.

Next would come the expansion of American protectionism. China and India have declined to participate in global-warming control, so under Waxman-Markey we would be able to impose tariffs on their goods coming into America, something India's environmental minister pointed out to Secretary of State Hillary Clinton a few days ago. The other side of that coin is of course that they could impose tariffs on our exports too. That would hurt American businesses and expand government control of our economy, products and businesses, all in the name of fighting global warming.

Of course we have seen the predecessor of the Waxman-Markey bill in the European Union's cap-and-trade regulation, a political failure as well as an economic one. As Heritage's Ben Lieberman has pointed out, it has not worked in various countries, and is now being opposed by nations that need to burn coal for their electricity generation. As the Washington Post wrote last February, European "emission targets were set too high. Too many pollution allowances were given away to industry. . . . Companies made windfall profits by charging customers more for energy while selling allowances they didn't need. And the Europeans have not had much success in reducing greenhouse gas emissions."

As Lieberman observes, "To the limited extent European nations have reduced emissions below business-as-usual levels it has hurt their economies. . . . Far from seeing evidence of the bright new green economy some are now promising, we are seeing that cap and trade has contributed to the harm." Waxman-Markey would operate much the same way with many of the same results in America, and that means central government planning would pull America down to European levels.

So who is in favor of this massive expansion of governmental authority in America? Labor unions of course, for tucked away is the requirement that any project receiving grants from the billions of giveaways in the Waxman-Markey bill would be required to apply Davis-Bacon union wage rules.

Environmentalists like it too, but as climate researcher Chip Knappenberger pointed out in May, neither Henry Waxman nor Ed Markey nor anyone else in Congress is arguing that "the bill is going to save the earth from human-caused climate apocalypse." It won't, and it "will have virtually no impact on the future course of the earth's climate." The Waxman-Markey reduction of U.S. greenhouse gas emissions, Mr. Knappenberger concludes, would reduce temperatures by less than one-tenth of a degree Fahrenheit by 2050.

The real purpose of Waxman-Markey is to vastly expand the scope, power and authority of the federal government. Washington would permanently regulate and dictate the performance of the U.S. economy, reward constituencies it favors and punish those it doesn't, and make more and more Americans dependant upon federal largesse.