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Inflicting economic pain

June 26, 2009 | By Nathaniel Ward

The Waxman-Markey global warming bill is an "energy tax in disguise," Heritage Foundation energy expert Ben Lieberman told members of Congress this week.    

In his testimony, Lieberman made clear that cap-and-tax works by "inflicting economic pain."

"The bottom line is that cap and trade works by raising the cost of energy high enough so that individuals and businesses are forced to use less of it," he reported.

» Watch the video "Cap and Trade: Will It Save the Earth?" to debunk liberal myths and get the facts from Heritage experts.

Representatives Henry Waxman (D-CA) and Edward Markey's (D-MA) cap-and-tax proposal, which the House is scheduled to vote on this afternoon, is a unilateral measure that will bring about higher taxes in a "roundabout and convoluted manner that proponents hope the public doesn't recognize it as a tax -- at least not until it is too late," Lieberman warned in a speech to the Third International Conference on Climate Change.

That is why Heritage experts have been working round the clock to inform the public of the true costs of cap-and-tax legislation.

According to recent Heritage economic analyses, the costs of the proposed global warming bill will kick in when it takes effect in 2012. By 2035, a family of four's energy costs will increase dramatically.

·  90 percent -- increase in electricity costs

·  58 percent -- increase in gasoline costs

·  55 percent -- increase in natural gas costs

Lieberman points out that these are only "low-ball estimates" and that the burden of these increased costs will disproportionately affect the poor.

In addition, there is no concrete evidence that such carbon regulations will have a noticeable impact on the earth's temperature. As Heritage experts David Kreutzer, Karen Campbell and Nicolas Loris point out, cap-and-tax legislation will only bring "higher taxes and economic devastation in return for ... nothing."

This bill comes on the heels of the EPA's April 16 "endangerment findings," which pave the way for big-government regulation of all carbon emissions. Nearly 30,000 concerned Americans voiced their opposition to the EPA's "endangerment findings" at Heritage's StopEPA.com website.

-- Amanda Reinecker

Health care reform explained

"The goal of health care reform is to ensure that everyone has affordable, adequate coverage for basic health care in America, and to do this without digging us deeper into the deficit hole," Heritage Vice President Stuart Butler writes on the New York Times website.

But before any reform is undertaken, we must keep a few key facts in mind. First, taxpayers already fund about 50 cents of every dollar spent on healthcare. Second, taxpayers will end up paying even more if we get government more involved in every part of the health system.

To achieve real reform while avoiding this centralized, bureaucratic micromanagement and increased government spending, Butler recommends health care reformers focus on two priorities:

  1. Fix how health care is taxed. We need to ensure Americans can get tax relief whether they buy insurance through their employer or on the individual market. This reform will allow millions of working families to better afford coverage.
  1. Create markets for insurance. "Create state-based insurance exchanges so that families can pick from a range of plans that meet basic conditions -- with the most immediate focus on families that are not offered coverage by their employers."

Butler cautions against big-government approaches to health care reform. These reforms assume that "if only the government were to organize every part of the health system somehow it would all work well. That kind of central planning doesn't work for national economies and it won't work for the health sector in America, which is as large as most national economies."

President Obama's proposal to create a "public option," a government-run health insurance plan, would be one such big-government offering. During a press conference this week, he acknowledged concerns "that if any public plan is simply being subsidized by taxpayers endlessly, that over time they can't compete with the government just printing money." But acknowledging concerns isn't the same as addressing them.

Heritage's FixHealthcarePolicy.com has become a popular resource for fueling the debate -- surpassing even the White House site on health care -- and equipping individuals and legislators with the facts on the costly consequences of big-government health care.

As the debates heat up, Heritage experts like Nina Owcharenko are reminding members of Congress they have a choice. "Either they can support efforts that expand Washington's control of the health care system, or they can allow the states to develop solutions that will transfer direct control of health care dollars and personal health care decisions back to individuals and families. The choice should not be that hard."

-- Amanda Reinecker

Other Heritage work of note

  • The Supreme Court's unanimous ruling that Section 5 of the Voting Rights Act "raised serious constitutional concerns" is "a stark rejection of what most cowardly politicians and the traditional race-conscious establishment have long argued," writes Heritage legal expert Todd Gaziano. The outdated provision of the voting law required certain states to defer to federal authority for any changes made to state ballots and voting locations. This marks a major victory in combating federal "intrusion on the states [unless] justified by current needs and conditions."
  • Earlier this month, House Republicans introduced the American Energy Act. This legislation included regulatory streamlining, tariff reductions, and several important nuclear energy provisions. The mainstays of this legislation were created by Heritage Foundation experts.
  • President Obama's recent firing of Gerald Walpin, inspector general of the Corporation for National and Community Service, directly contradicts the Improving Government Accountability Act, argue Heritage legal experts Todd Gaziano and Hans von Spakovsky. The law, co-sponsored by then-Senator Barack Obama, protects IGs from political repercussions. Walpin's firing marks a policy reversal that is inconsistent with the law -- one "that Obama had a hand in enacting as a senator." Gaziano and von Spakovsky encourage deeper investigation into what "appears to be political revenge at best."

In other news

  • South Carolina Gov. Mark Sanford admitted this week that he has engaged in an extramarital affair. His office had previously claimed his recent disappearance was for a hiking trip.
  • President Obama has issued his first veto threat as the House of Representatives considers a $550 billion defense authorization bill for fiscal 2010. The President regards some of the provisions in the bill unnecessary for national security.
  • In what may have been Justice David Souter's last written opinion, the Supreme Court ruled unconstitutional the strip-search of a 13-year old girl who Arizona school officials believed was hiding ibuprofen in her undergarments.

Coming up at Heritage

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Nathaniel Ward is the Editor of MyHeritage.org—a website for members and supporters of The Heritage Foundation. Amanda Reinecker contributed to this report.