After making the several-hour commute this morning from the Horner Country Manse, I find a flood of e-mails asking whether I have a response to dear friend Jonathan Adler’s latest insistence that your lying eyes are foolin’ you and that the administration’s un-redacted internal Treasury documents actually affirm Jonathan’s insistence that it was all much ado about nothing.
First, note that the reactions prove what we had argued, that they would not survive a moment’s scrutiny upon an in camera review that we also indicated we would seek immediately upon filing and receiving Treasury’s response. Now, with key Senators now bailing on cap-and-trade as a result of the FOIA disclosures and our point clearly having been fairly well made (outside of WaPo/Adler circles), I have to wonder whether it’s worth the effort to pursue the lion’s share of documents that Treasury is clearly holding back. (They had informed us on our original conference call that our FOIA covered nearly every document and e-mail created in the office’s now 14-month history. We received five documents and no emails. Huh.)
When litigated, if the administration had tried that stunt with the court, it would have found a trier of the fact disposed against accepting other Treasury claims. We’ve produced all documents responsive to our FOIA, honest your honor. Things would have progressed downhill from there for them.
Anyway, key points of my response are found in this ABC News story, the closest thing to a fair-and-balanced look at the woeful spinning coming out of the White Hosue and affiliated tentacles of the global-warming industry. But in longer form, here’s what you need to know about the spin:
The original documents now out reveal the fairly pathetic attempts at hiding numerous assessments, disingenuously characterized to members of the media (e.g., Glenn Beck’s producer) as being mere recapitulations and summaries of various public-record statements from, e.g., the Washington Post (uncited in the memos). They were nothing which would actually be subject to a FOIA exemption, but purely embarrassing internal characterizations.
On page two of the ten-page PDF we see Treasury mutter that such schemes could yield benefits like the massive costs it will certainly produce: tens and possibly hundreds of billions of dollars, per the administration, even after they had said publicly that they plan on their scheme raising at most $65 billion/year from selling all of the ration coupons, a position recently repeated in the Mid-Session Review (new budget and revenue projections). Which is to say that privately they have asserted they could actually haul in three times the amount that they’re publicly saying the sale of all ration coupons or allocations would bring in.
We’ve been asked if we expected it to be higher. That’s absurd. Until October no one knew what the next increment of a trillion even was, so I am confident that’s higher than anyone in the public expects. Page four of ten now reveals Treasury’s assessment that cap-and-trade could reap up to $300 billion annually. That’s simply a figure they didn’t want out there. Nothing privileged or subject to exemption. Just embarrassing. So, like all of this, Jonathan, their attempt at redacting it is surely, in the eyes of many, compelling evidence as to the merits of the “why, this supports our case!” spin.
That’s over 2 percent of GDP. Let that sink in. (But don’t worry, it won’t cost nuthin’.)
Page six of ten now says that the haul could possibly equal the receipts from the corporate income tax. See above.
Nothing in the unredacted portions supports the administration’s spin that this is old news, let’s move on, not relevant because after all the House has passed its own bill, etc. Nor does anything therein defeat our refutation of that.
It is still the administration’s position to auction 100 percent of the “allowances” — that was their position when releasing their budget proposal in February, and the same revenue projections were affirmed in OMB’s Mid-Session Review of three weeks ago, p. 33.
So much for the line about this being mere musings about a proposal which doesn’t exist. I await the administration publicly disavowing it. Until then, it’s their position of record — dogmatic “nothing to see here move on!” notwithstanding.
That’s also the position of the green groups like LCV who echo the claim.
The administration’s further claim that the revenue isn’t really revenue, because it will be recycled back to the ratepayer, is facially absurd: if that were true there would be no point in the exercise now, would there? In fact, that they are implying that all or even most of the revenues are simply redistributed to the poor and seniors hit the hardest by this energy tax (as the CBO admits it to be) actually exposes the reality they are hoping to distract you from.
Of course, the implication is not remotely the case. It’s a distraction that’s so misleading I have to say its disingenuous, just like claiming the House bill only auctions off 15 percent of its “allowances,” which of course doesn’t withstand scrutiny if you’ve read the bill. That’s just where it starts. That’s not the objective, but the politically necessary if temporary sop. The claim therefore is so misleading as to be dishonest.
In truth, they plan on a fraction of that revenue being recycled, and as projected in the budget, the bulk was to pay for the various major other proposals, a portion to his health care plan, a portion to pay for the middle class tax cut, etc.
Among the e-mails mentioned above, one economist wrote the following:
By way of analogy, we could ask what is the cost of food stamps and welfare payments. Since they are given away 100 percent (minus the amount for record keeping etc.), some would argue the cost is zero. That would be Adler’s view and also the view of the CBO and all the postage-stamp claimers.
However, the allowance revenue will not be distributed in some theoretically costless way. Nor will it be distributed without strings attached. I think it is more legitimate to think of the allowance revenue as taxes and their distribution as spending. (This is what the CBO says when they are wearing their budget scoring hat.) In that sense, the cost is [the] $200 billion unreduced by give-aways.
Next, what about the deadweight loss? Here we are talking about lost GDP. In our analysis, the lost GDP exceeds the transfer. So the deadweight loss is greater than the $200 billion being argued over in the Treasury memos.
The administration’s efforts to keep that which has now been revealed speaks volumes. It was not subject to FOIA exemption, but just embarrassing. Upon facing the prospect of defending these exemptions, and Congress looking into what Treasury was hiding, on Friday afternoon they released the full document (and within a few minutes to friendly green press, as well). That is, they also were surely reacting to Rep. Upton’s expressed suspicion that Treasury might warrant an inquiry into this, which would then turn over other, even more odious, stones. So I suggest they are seeking to put out that fire. Further scrutiny of this matter is likely the last thing they want. But I think the cat’s out of the bag.
As always, Jonathan, back to you. Tell me to whom the administration is lying: to the public, or to itself.