From Talking Points Memo:
Recess is a time when members of Congress go home and say the darnedest things to their constituents. Take Michelle [sic] Bachmann. Please.
“The concern is that this energy tax will hike up the cost, not only of our energy bills by an average of more than $2,500 for the typical family of four in Minnesota according to one study, but of everything else that we buy.”
This is peculiar. First of all, there’s no study that says anything like this. Second of all, there is a study that Republicans are citing as a source for their claim that a cap and trade bill will cost the average household $3,128 a year–but the study doesn’t say that either. It says that a cap-and-trade program will raise a certain amount of revenue (over $350 billion at the outset) and Republicans have divided that by the number of households they claim are in America. Of course, the authors of the study say this is all terribly, terribly wrong.
In an op-ed article Wednesday in the Star Tribune, Michele Bachmann referred to an MIT study on cap-and-trade legislation, despite the study’s author having made public complaints that Republicans have misrepresented his work, according to the Hill.
“According to an analysis by the Massachusetts Institute of Technology, the average American household could expect its yearly energy bill to increase by $3,128 per year,” Bachmann wrote.
Last month, other House Republicans, including House Minority Leader John Boehner, R-Ohio, made the same claim, referencing the MIT study.
From the St. Petersburg Times:
Taxpayers may have been shocked to learn from House Republicans that President Barack Obama wants to pay for health care by charging them to turn on a light.
“The administration raises revenue for nationalized health care through a series of new taxes, including a light switch tax that would cost every American household $3,128 a year,” the House Republican Conference said in a Web post and press release […]
This alleged “light switch tax” is a reference to Obama’s proposal to tax power companies for carbon dioxide emissions, and allow companies to trade emissions credits among themselves. That’s called a cap-and-trade program, and Republicans say the companies would just pass the tax on to electricity consumers.
So any revenue raised by a cap-and-trade program amounts to a “light switch tax” on consumers, the House Republicans alleged.
To back up the claim, their staff pointed us to an M.I.T. report that says a similar a cap-and-trade proposal (the administration has not yet detailed their own version) would raise $366 billion per year. If you divide that by the 117 million households in the United States, you find it would cost each household $3,128, they said.
“It’s just wrong,” said John Reilly, an energy, environmental and agricultural economist at M.I.T. and one of the authors of the report. “It’s wrong in so many ways it’s hard to begin.”
Not only is it wrong, but he told the House Republicans it was wrong when they asked him.
“Someone from the House Republicans had called me (March 20) and asked about this,” Reilly said. “I had explained why the estimate they had was probably incorrect and what they should do to correct it, but I think this wrong number was already floating around by that time.”
It continues to float.
The report did include an estimate of the net cost to individuals, called the “welfare” cost. It would be $30.89 per person in 2015, or $79 per family if you use the same average household size the Republicans used of 2.56 people.
The cost would grow over time as the program ramps up, but the average annual cost over time in today’s dollars — that is, the “average annual net present value cost” — is still just $85 per person, Reilly said. That would be $215.05 per household.
The Republican press release said the cap-and-trade program would pay for “nationalized health care.”
But Obama’s health care proposal is not for “nationalized health care.” It does call for a “National Health Insurance Exchange” with private insurance options plus a new public plan based on the one currently available to members of Congress — but consumers could still keep their private insurance if they want, as Obama emphasized during his presidential campaign.
Even if it were true that Obama wants to nationalize health care, he does not envision paying for health care reform with the cap-and-trade program as the Republicans alleged. Rather, his $634 billion health care reserve fund is to come from efficiencies in Medicare and Medicaid and decreased deductions for some charitable contributions by upper-income taxpayers, according to Obama’s proposed budget.
If the Republicans had simply misstated the results of the MIT study, the Truth-O-Meter would have been content giving this one a False. But for them to keep repeating the claim after the author of the study told them it was wrong means we have to set the meter ablaze. Pants on Fire.
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