Thursday, October 22, 2009

Cap And Trade Calamities

A Second Call for Transparency

Cap and trade proposes a new national tax of historic proportions

Our Tuesday rendition of Cap and Trade Calamities discussed how only the EPA was given the semi-draft form of the Boxer-Kerry cap and trade bill to model the economic effects. The Heritage Foundation’s Center for Data Analysis, along with several other organizations (including other government organizations) that modeled the Waxman-Markey cap and trade bill, do not have access. We have another call for transparency – this time from the House side.

On October 2, Chairman of the House Energy and Commerce Committee Henry Waxman sent a letter to Heritage’s David Kreutzer, lead author of our analysis of the Waxman-Markey cap and trade legislation. The letter included 33 questions about the details of our model, the details of our assumptions, the details of our policy assumptions and the interpretation and presentation of our results.

As David Kreutzer writes in his Politico op-ed, “We were delighted to engage. Our study had reached conclusions not at all pleasant to the eyes of the bill sponsors. It showed that, when all the tax impacts were added up, the Waxman-Markey legislation would cost the average per-family-of-four cost almost $3,000 per year. Over the 2012-2035 time period, we forecast total per-family-of-four costs would tally roughly $71,500.

This back and forth is not only a civic obligation as Congress debates this legislation, but it is also a useful exercise in transparency. There has been a shroud of secrecy over negotiations on energy taxes, health care reform and stimulus legislation this year. Closed door meetings and private backroom negotiations have largely prevailed, while the general public and most of Congress are left outside.

We commend Chairman Waxman and Chairman Markey for opening these doors. We humbly believe that our research models are second to none, and welcome the chance to share our research and results with anyone who is interested, regardless of their political affiliation.”

All of the questions, as well as our detailed answers, are publicly available here.
Several other organizations that modeled the effects of cap and trade were sent the same letter. These include: Charles River Associates (commissioned by National Black Chamber of Commerce), The American Council for Capital Formation (commissioned by National Association of Manufacturers), the Massachusetts Institute of Technology, the Energy Information Administration, and the Environmental Protection Agency.

Interestingly, some groups such as the Political Economy Research Institute, the Congressional Budget Office and the Brookings Institute were omitted from Chairman Waxman’s request. In an effort to promote transparency, we sent letters to these organizations asking them to respond to the same questions where we can post them for the public to see on We also formally invited the other organizations who were asked these questions by Chairman Waxman to post their responses, in the interest of full transparency

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