To get support for his bill, Mr. Waxman was forced to water down the cap in early years to please rural Democrats, and then severely ratchet it up in later years to please liberal Democrats. The CBO's analysis looks solely at the year 2020, before most of the tough restrictions kick in. As the cap is tightened and companies are stripped of initial opportunities to "offset" their emissions, the price of permits will skyrocket beyond the CBO estimate of $28 per ton of carbon. The corporate costs of buying these expensive permits will be passed to consumers.The CBO analysis did not consider the year to year decrease in GDP that this bill will cause and admits that in a footnote. What will the real results be?
- The Heritage Foundation considered the complete effect on the GDP and calculated that it would cost $161 billion in 2020 or $1,870 for a family of four. But, as the more stringent restrictions are applied, it will cost a family of four $6,800 by 2035.
- Manufacturing states will be hurt more than service states.
- Coal-producing states will be hurt more than those using more natural gas, hydroelectric power, or nuclear power.
- Low income families use more of their income for energy needs than higher income families, so they will be hurt more.
- gasoline reached a cost of $5 per gallon.
- electricity prices exceeded a cost more than 10% greater than in 2009.
- unemployment rates hit 15%.