Jake Tapper reports on the discovery of an internal EPA memo that admits what everyone knows about cap-and-trade systems and regulation of CO2.  The memo advises the White House that any attempt to regulate output of CO2 in energy production will likely have “serious economic consequences,” an admission that will boost criticism of the EPA’s proposed regulation of the industry:

Advice in an Obama administration interagency review memo to the Environmental Protection Agency warns that government regulation of greenhouse gases under the Clean Air Act (CAA) will hurt the economy, and questions whether such a “precautionary” move would too expansively open up the door for government regulation.

“Making the decision to regulate CO2 under the CAA for the first time is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities,” says one comment in the memo, which was officially sent by the White House’s Office of Management and Budget. “Should EPA later extend this finding to stationary sources, small businesses and institutions would be subject to costly regulatory programs such as New Source Review.” …

On April 17, Obama’s EPA Administrator, Lisa Jackson, issued a proposed “endangerment finding,”  which would likely mean the EPA would regulate greenhouse gases — carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride, treated as a group as an air pollutant — through the Clean Air Act.

The White House has not yet decided to go forward with the finding. There is a 60-day comment period following the finding. As part of this process, the Obama administration requested comment from various departments and agencies on the endangerment finding, which is where the memo came from.

The White House may not have officially decided to go ahead with the finding, but they’ve sent every possible hint that they will.  When asked, the White House responds that they want Congress to act via legislation as their first choice, but that hardly closes the door on EPA action by fiat.  If the treatment of Chrysler senior creditors proves anything, it’s that this administration will not hesitate to use any power, legitimate or not, to pursue its policy options and desire for directed outcomes.

This memo destroys the argument made by Obama often over the last two years that cap-and-trade would wind up being an economic boon.  Obama had argued that a renewed emphasis on green energy production would be akin to landing on the moon, a big government program that boosted employment in pursuit of an ambitious goal.  The difference between the two is that the space program didn’t impose massive burdens on the airline industry to pay for it, or on the auto industry, or Amtrak.