Video: Boxer, Alford spar on “automatic refunds” under Waxman-Markey
posted at 2:19 pm on September 29, 2009 by Ed Morrissey
When last we left the imbroglio between Harry C. Alford, chairman of the National Black Chamber of Commerce, and Senator Barbara Boxer, the former castigated the latter for her focus on skin color when challenging Alford’s opinion on cap-and-trade legislation. That missed a more substantial exchange between Boxer and Alford, in which Ma’am insisted that Waxman-Markey left the poor better off because of subsidies and “automatic refunds” on energy bills. Alford sounded highly skeptical of the government payoff argument:
Senator Boxer. Good. I would like you to know that the bill we are putting together, the biggest priority is softening the blow on our trade-sensitive industries and our consumers. I just want you to know that. That is the goal. Now, at the end of the day, your organization may not think we have not achieved it. But I also want you to know that with Waxman-Markey, and their analysis comes out with a different opinion than yours, shows that, the analysis by the Congressional Budget Office shows that the lowest quintile, the people you say are the most vulnerable, actually come out ahead by $40 due to the automatic refunds that people will be getting on their utility bills.
The only thing I am asking from you, because we went at it pretty hard, is that I hope you will take a look at that analysis. And ask CRA to take a look at it as well. Would you do that and get back to me as to whether there is any change in your opinions?
Mr. Alford. Madam Chair, I will do that. I have been around the block a few times. People are not going to get that refund. It is not going to hit them. People are going to be unemployed and they are not going to have any recourse whatsoever. The Government will have failed them again. Also, I want to take you up on, I want our board to hold a board meeting in San Francisco, and the topic will be the green jobs of California and we want to get on a bus and go see them.
Senator Boxer. Absolutely.
Mr. Alford. Yes, Madam.
Senator Boxer. I have already called ahead to the Apollo Alliance and I asked them if we can do something like this. We will decide where we want to go, both of us, together, and I definitely would like you to see Richmond Build and Solar Richmond because it is amazing. I also wanted to say that, when you raised the fact that you are a veteran, for which we are all deeply grateful, it reminded me of the days when my husband volunteered for the Army. He went in for active duty and then for six years he was in the reserves. It brings back memories of those years of not knowing whether or not he would be called. It was the Berlin crisis and we did not know. And the job insecurity. He was in law school. Would he have to leave and if he came back?
So, I want you to know that one of the other things I would like to do with you when we are out in California is to look at the reach out to the veteran’s organizations that these groups are doing, because it is very heartening to see what they are doing. I am very excited at the fact that you have taken me up on my invitation.
Ma’am refers to the same subsidies and grants discussed in the CBO report on Waxman-Markey, but she neglects to describe the other effects of the higher prices and subsidies. By 2050, the lowest quintile of American earners do come out ahead, but only at the expense of everyone else, especially the middle class, as this CBO chart shows:
An internal analysis by Republicans on the Committee on Environment and Public Works casts doubt on whether those “automatic refunds” will even exist:
The whole point of cap-and-trade is to raise the cost of energy—specifically, energy produced from fossil fuels. Environmentalists know this, so they try mightily to change the subject. They say cap-and-trade is not a tax, principally because in Waxman-Markey, consumers get “rebates.” Yet, under a careful reading of the bill, this is misleading: middle income consumers may or may not get checks from their local utility—in short, nothing in the bill guarantees that they do.
When Republicans recently pounced on Treasury Department estimates—released only after a freedom of information act request—showing President Obama’s cap-and-trade program would cost $1,761 per household (and later, $3,522 per household—a number discovered only after Treasury bowed to pressure and removed redactions in their documents, showing cap-and-trade could cost nearly $400 billion per year) environmentalists cried foul. They argued that, among other things, “allowance revenues” from Waxman-Markey would be used to offset this cost. “The bottom line,” according to Stephen Seidel of the Pew Center, “is that it goes back to the consumers.”
“Goes back to consumers”; what does this mean? For one, it does not mean that middle-income consumers will necessarily get a rebate check from their local distribution company, or LDC, to offset higher electricity bills caused by cap-and-trade. In reading through Section 782 of the bill, one finds that emission allowances “distributed to an electricity local distribution company shall be used exclusively for the benefit of retail ratepayers” [emphasis added]. So far, so good. But again, what does this mean?
Reading further, one finds this: “To the extent an electricity local distribution company uses the value of emission allowances distributed under this subsection to provide rebates, it shall, to the maximum extent practicable, provide such rebates with regard to the fixed portion of ratepayers’ bills or as a fixed credit or rebate on electricity bills.” To the extent it provides rebates? This language is largely hortatory; nothing here requires LDCs to cut a check. And there’s no such requirement in the remaining provisions of Section 782 covering “industrial ratepayers,” “guidelines,” and “regulatory proceedings.”
It seems that Alford is quite right to remain skeptical. The EPW Republicans have sent this letter to Boxer today:
The Honorable Barbara Boxer, Chairman
Committee on Environment and Public Works
United States Senate
Washington, DC 20510
Dear Chairman Boxer,
According to news reports, Sen. Kerry and you plan to introduce cap-and-trade legislation on Wednesday, September 30. We understand that your bill, as currently drafted, is incomplete in several important respects- most notably, it lacks a formula to determine the allocation of emission allowances. Leaving out these and other key provisions makes it impossible to get an objective estimate of the economic impacts of your bill on consumers, especially those in energy-intensive regions that rely on coal for electricity and manufacturing for jobs. Moreover, farmers, families and workers have no way of gauging how acutely they will be affected from job losses, higher electricity, food, and gasoline prices.
On August 6th we wrote to you about these concerns, stating that, “To what degree families will pay higher utility bills, farmers will face higher production costs, drivers will face more pain at the pump, and workers will face a greater likelihood of losing their jobs, depends on how a cap-and-trade program distributes its tradable allowances. This makes knowing the allocation scheme vital to determining who it will help and who it will hurt.” Moreover, as we wrote then and continue to believe now, we cannot repeat the process in the House, in which committee members had only a few days to review critical components of cap-and-trade legislation before markup, and a 300-page supplement was not made public until just hours before the final vote on the floor.
Certainly you would agree with us that the American people and their elected representatives need a fair, open, and transparent review of your legislation. In that vein, we urge you to introduce complete legislation, with no placeholders. Moreover, it is imperative that we have a complete bill well in advance of legislative hearings and markup. Otherwise the legislative process will not paint a full and accurate picture of your legislation to the American people.
And note that Boxer managed to get one last dig in at Alford about his legitimacy as a black man:
Boxer: I also have another question. I think I have the answer, but I want to make sure that I understand you. I am sure you agree that, within each community, regardless of whom they are, there is diversity of opinion on this issue. Is that correct?
Mr. Alford. Yes, Senator.
Senator Boxer. Okay. Because I did get a call from my friends at the House, and they said please put in the record the statement from the Chairwoman of the Black Caucus over there, just because they want to know there are differing opinions. They wanted it included in the record. So, I am going to do that.
We missed that in July. Boxer then hurriedly adjourned before Alford could respond.