NC Congressman Shuler's support for Cap and Trade to cost jobs
By Bill Fishburne
The Tribune Papers

The Cap and Trade bill passed by the House and supported by 11th District Congressman Heath Shuler (D) will cost 3,252 lost jobs in Western North Carolina in 2012, according to a detailed analysis conducted by the Center for Data Analysis, part of the Heritage Foundation.

The report was published the day before the vote. During that critical 24-hour period, Shuler apparently changed his mind about opposing the bill and voted with Nancy Pelosi and the Democratic majority.

In addition to the lost jobs, the bill will cost his district more than $295 million in lost productivity in 2012 and will get worse as the bill's restrictions get tighter. On the average, the study shows, the 11th District will lose $589 million per year between 2012 and 2035.

The measure passed 219 to 212, with 44 Democrats voting against it and just eight Republicans in support. The bill has been described as the largest and most damaging tax increase in history and is being imposed during the worst recession since the Great Depression of the 1930's.

The Heritage analysis was published June 25 by analysts Karen Campbell, Ph.D., and David Kreutzer, Ph.D. "Placing a cap on carbon emission--via rationing, taxing, and eliminating consumer choice--will have major implications for American families and the economy."

The Heritage Foundation analysts found that unemployment will increase by nearly two million in 2012, the first year of the program, and reach nearly 2.5 million in 2035, the last year studied. Total GDP loss by 2035 would be $9.4 trillion. The national debt would balloon as the economy slowed, saddling a family of four with $114,915 of additional national debt. Families would also suffer, as the bill would slap the equivalent of a $4,609 tax on a family of four by 2035.

Shuler's office told callers Wednesday that he voted for the measure because it was "revenue neutral". Earlier in the week, his office stated that he would oppose the bill.

Heritage is not alone in its assessment. The National Black Chamber of Commerce and the Brookings Institution also project huge job losses. Proponents of a national energy tax will quickly point to a recent Congressional Budget Office memo and Environmental Protection Agency analysis suggesting low per family costs.

Heritage analysts believe those estimates are grossly inaccurate, as both the CBO memo and the EPA's analysis contain flaws too serious for use as measures of the economic impact of the Waxman-Markey bill.

Meanwhile, in the heartland of America, a poll conducted by the National Rural Electric Cooperative Association shows registered voters overwhelmingly oppose legislation that would increase energy costs.

The poll is particularly significant because even the most optimistic cost assessments acknowledge Waxman-Markey will raise energy prices and reduce consumer purchasing power.

In the poll, a sampling of 807 registered voters, reports 58 percent of American voters are unwilling to pay any more than they currently pay for electricity to combat climate change. Importantly, not one respondent indicated a willingness to pay over 20% more on their monthly electricity bill to combat climate change.

Moreover, 68 percent of voters disagree with the idea that Congress should enact a carbon tax to encourage consumers to cut back on their electricity usage.

The Heritage Foundation's approach was to break down the incomprehensible national cost of the Waxman-Markey bill into numbers for each congressional district. Despite these "deals" (not everyone can have one), many Members of Congress have apparently assumed their congressional districts will not be affected, either because of the deal they made with Speaker Pelosi to buy their vote, or, as the Heritage Foundation says, "they have an incomplete view of how the American economy functions."

The Heritage study lays out six congressional district specific data points and shows the impact on all 13 of North Carolina's Congressional Districts.

1. Gross State Product Loss in 2012: This number is the amount of economic destruction that will occur in that district in the first year of the cap-and-trade regime.

2. Average Gross State Product Loss, 2012-2035: Same as above, only it is the average economic destruction in the district for the bill's first 24 years.

3. Personal Income Loss in 2012: This number represents the reduction in consumer spending power in a district in the first year of the cap-and-trade regime.

4. Average Personal Income Loss, 2012-2035: Same as above, only it is the reduction in consumer spending power in the district for the bill's first 24 years.

5. Non-Farm Job Loss in 2012: Jobs are jobs, and in the first year of the cap-and-trade regime, each district will have significantly less than they otherwise could.

6. Average Non-Farm Job Loss, 2012-2035: This number is crucially important because it demonstrates that no district gains jobs, even in the long run; the increase in "green jobs" does not outweigh the decrease in jobs elsewhere.

A Final Note on Jobs

During the "stimulus" debate, White House Press Secretary Robert Gibbs lamented that "more companies [have] announced mass layoffs." The Bureau of Labor Statistics defines mass layoffs as "where private sector nonfarm employers indicate that 50 or more workers were separated from their jobs for at least 31 days." Under Waxman-Markey, on average each congressional district would experience the equivalent of more than 52 mass layoffs.

Although losing several thousand jobs may not seem like a lot to some politicians who are stuck inside the beltway, the mass layoffs resulting from Waxman-Markey should make any politician--and hard working American--cringe.

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Karen A. Campbell, Ph.D., is Policy Analyst in Macroeconomics and David W. Kreutzer, Ph.D., is Senior Policy Analyst for Energy Economics and Climate Change in the Center for Data Analysis at The Heritage Foundation.