Planet Gore

The Truth about the Treasury Trove

The greens have responded with, so far as my experience has it, unprecedented fury and bile to my FOIA request exposing the Department of the Treasury’s internal discussion of how the administration, like the rest of us, expect cap-and-trade to chase away manufacturing jobs — particularly in key industries like steel, chemicals, and cement — and to double the entire existing burden of environmental regulation on what’s left of the U.S. economy (after shaving a full 1 percent off of GDP).

What has most riled them — indicating what it is that most frightens them — is the internal assessment that the Obama administration expects to raise between $100-200 billion in revenues per year from the taxpayer from selling CO2 ration coupons. Oddly, that’s up to three times as much as the administration publicly asserted in February it expected to raise from 100 percent auctioning of ration coupons, and which they said they still expect it to raise,  as of three weeks ago (p. 33) — well after the March memo was written citing that inconvenient $100-200 billion. So much for having abandoned their position of auctioning, which it turns out is still the administration position.

In response, the greens have tossed out any number of distractions, like claiming that we are ignoring “CBO data” (sic); by which they mean a remarkably cherry-picked CBO estimate of the cost in the cheapest year of the Waxman-Markey bill, a bill not referenced in Treasury’s outed expectation. That projection is of course not “data,” but it is a distraction — but with so little of the data being helpful to their side, I understand their need to fudge.

First, the fact that the administration redacted what were embarassing cost assessments and other characterizations tells you quite a lot about the administration’s claims that there’s nothing new in these documents (the administration has no legal right to redact allegedly “pre-decisional” language when they have no legal authority to make decisions on a matter, incidentally, as we expect a court to agree). But let me say this as plainly as I can, at risk of House censure: With the help of a remarkably incurious media, Big Green’s claims about what we revealed include not just stretches but brazen, outright fabrications.

Consider Politico, and how the greens talked a reporter (the same reporter whom they talked into saying that Al Gore signed Kyoto) into repeating, with the accuracy we are coming to expect, their new mantra that auctioning the ration coupons is “a long-ago-scrapped proposal made by the Obama administration.”

Ahem. Not “long-ago-scrapped.” The accurate phrase is House-passed.

No one who has read Waxman-Markey — a subset of people I know better than to expect includes reporters “reporting” on it — can honestly claim to believe that the bill scrapped auctioning, if not 100 percent, then the vast majority of these “allowances.” It mandates it.

It’s right there, buried in the 1,400-page bill, Title VII, Subtitle B, Sections 701 through 729 and Subtitle B, Part H. It ends up selling three-fourths of the things (with the rest politically allocated to groups not required to have them and with no use for them other than to sell ‘em to less politically favored saps who are required to have them). How can they miss that?

What this tells us is the folly of claiming that the House bill makes Treasury’s assumption of auctioning many or most allowances irrelevant. The allowances that this bill does still give away in a few years are given away to entities for resale, not to the productive sector who actually will need the things. That means that, for all intents and purposes, by giving none away to the people and businesses required to have them, Waxman-Markey is de facto auctioning 100 percent of them. For anyone familiar with the scheme to say that auctioning is “long-ago-scrapped” is a fabrication intended to deceive.

In the same publication, we see a lie wrapped in an even bigger whopper intended to distract, in the form of a claim that Treasury’s internal assessment is irrelevant. For example, Politico’s Ben Smith quoted this bit of stammering incoherence from the League of Conservation Voters :

Specifically, the original White House plan had 100% of emissions permits being distributed by auction; the plan that passed has just 15%. “Can you say ‘irrelevant analysis’? It would be like pricing the health care bills currently in front of Congress based on a single-payer system,” [an LCV spokesman] writes.

But as we see, his implication that the House bill only requires auctioning of 15 percent is flagrantly untrue.

What an actual journalist might do is note how the teaser “only 15 percent auctioned!” (which explodes to 100 percent), gives meaning to Friends of the Earth’s description of the scheme as “subprime carbon.”

But that wouldn’t help the agenda’s chances now, would it?

Now, what about the claim that giving away the ration coupons changes the cost, the cost being what the greens are up in arms over?

Not a bit. At least, if you believe Obama’s economic team. As you can see below, even OMB director Peter Orszag-led CBO recently noted the taxpayer pays either way, it’s just that they give corporate buddies much of the loot for a while as part of the deal. But it isn’t even disputed in relevant quarters that it doesn’t matter who gets the money — 85 percent to special interests and 15 percent to the government; or 100 percent to the government — it still comes out of the taxpayer’s pocket.

Under a cap-and-trade program, firms would not ultimately bear most of the costs of the allowances but instead would pass them along to their customers in the form of higher prices. Such price increases would stem from the restriction on emissions and would occur regardless of whether the government sold emission allowances or gave them away.

The supposedly controlling Waxman-Markey effort merely gave most of these allowances away to GE and Duke Energy and Chicago’s Exelon, as examples, for a few years to buy political support.

One might not think that the fact that Waxman-Markey handed over billions, during the introductory decade, to those rent-seeking industry who spent so much on making the scheme happen — would be something that the greens would draw attention to. But that is precisely what they have done by insisting that the House bill really doesn’t immediately auction allowances . . . much. But that’s the trouble with lying in the first place. It’s out there.

Glenn Beck is addressing this issue this afternoon, as he has already indicated on his radio program earlier, including by kindly including me. I get a sense that his picking up on the scent is the thing that’s most unnerving the greens at the moment. Can anyone say “Van Jones”?