Luke Russert uncritically quoted John Boehner claiming that Democrats' cap and trade plan will cost American families $3,100 per year, a figure that is based on Republicans' distortion of a 2007 study and has been discredited by one of the study's authors.
In a June 10 post on MSNBC.com's First Read, NBC correspondent Luke Russert uncritically quoted Minority Leader John Boehner claiming that Democrats' cap and trade plan will cost American families $3,100 per year, a figure that is based on Republicans' distortion of a 2007 Massachusetts Institute of Technology (MIT) study and has been discredited by one of the study's authors. Russert reported that "House Republicans vigorously attacked Democrats for their support of a cap-and-trade system to regulated carbon emissions, calling the legislation a 'job killer,' " and quoted Boehner as saying, "The Democrats' national energy tax will be paid by anyone who drives a car, buys an American-made product, or flips on a light switch. That means a yearly average of $3,100 in higher energy costs for middle-class families -- and fewer jobs for American workers."
According to a May 28 article on Factcheck.org, "Leading Republicans are claiming that President Obama's proposal to curb greenhouse gas emissions would cost households as much as $3,100 per year. The Republican National Committee calls it a 'massive national energy tax.' But the $3,100 figure is a misrepresentation of both Obama's proposal and the study from which the number is derived." From the article:
Obama himself once said energy costs would "skyrocket" under his plan, but the GOP's partisan claim of a $3,100 per household cost increase is far higher than figures produced by other studies. The Environmental Protection Agency estimates the average cost per household to be between $98 and $140 per year, based on the Democratic cap-and-trade bill working its way through the House. Even the conservative, pro-Republican Heritage Foundation figures the average family would see its energy bill increase by $1,500 a year, less than half what the GOP claims. A Congressional Budget Office expert recently estimated the cost per household at an average of $1,600 a year, but that figure doesn't account for energy rebates Obama has proposed giving to consumers. If the government did use revenue from cap and trade "to pay an equal lump-sum rebate to every household," the CBO expert said, "lower-income households could be better off."
How do Republicans figure American households will be out $3,100? The figure is based in part on a 2007 study by the MIT Joint Program on the Science and Policy of Global Change. The study estimated that a cap-and-trade market for 2015 would be worth $366 billion in revenue. Republicans, figuring that that amount would be passed from the energy companies to consumers, calculated the average cost per household by dividing $366 billion by 117 million households (a population of 300 million divided into households of 2.56 persons) to get $3,128, or roughly $3,100.
However, one of the authors of the MIT study disputes that figure.
In a letter sent to House Minority Leader John Boehner (R-Ohio) on April 1, John Reilly, associate director for research at the MIT Joint Program on the Science and Policy of Global Change, said that the study he coauthored had "been misrepresented in recent press releases distributed by the National Republican Congressional Committee." He said the GOP's calculation fails to account for Obama's stated intent to provide rebates to consumers to cushion the effect of increased prices: "[M]any of the proposals currently being considered by Congress and as proposed by the Administration have been designed to offset the energy cost impacts on middle and lower income households and so it is simplistic and misleading to only look at the impact on energy prices of these proposals as a measure of their impact on the average household."
Reilly at first estimated the average annual cost of implementing a cap-and-trade program to each household to be about $340, but he later wrote a follow-up letter to Boehner on April 14 correcting what he said was an error in his calculations and increasing his estimate to about $800. He said his corrected estimate "includes the direct effects of higher energy prices, the cost of measures to reduce energy use, the higher price of goods that are produced using energy, and impacts on wages and returns on capital."