Media reported conservatives' high cap-and-trade cost estimates, but not lower CBO number

››› ››› DIANNA PARKER, GREG LEWIS & JOCELYN FONG

Media outlets that had advanced conservative claims that cap-and-trade legislation would cost thousands of dollars per household have yet to report on a CBO analysis estimating that the net impact to households would be significantly lower for legislation recently passed out of a House committee.

Earlier this year, several cable news programs -- including CNN's The Situation Room and Lou Dobbs Tonight and Fox News' Special Report, Hannity, and On the Record -- advanced conservative claims that cap-and-trade legislation favored by President Obama and congressional Democrats would cost thousands of dollars per household. But those programs have yet to report* on an analysis of the American Clean Energy and Security Act -- a cap-and-trade bill recently passed out of the House Energy and Commerce committee -- released four days ago by the Congressional Budget Office (CBO). The CBO estimated that the net impact to households from the bill in 2020 would range between a benefit of $40 per year and a cost of $340 per year, with an average cost of $165 per year -- significantly less than the figures those programs reported or allowed their guests to claim.

According to CBO, "That net impact would reflect both the added costs that households experienced because of higher prices and the share of the allowance value that they received in the form of benefit payments, rebates, tax decreases or credits, wages, and returns on their investments." From the analysis:

As Media Matters for America has noted, several media figures and outlets have uncritically repeated or failed to challenge the Republican claim that cap-and-trade would cost the average U.S. household more than $3,000 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.

Below are examples of programs that have not yet reported CBO's numbers, yet previously reported or advanced much higher figures with respect to the costs of cap-and-trade:

  • On the March 25 edition of The Situation Room, anchor Wolf Blitzer did not challenge Sen. John Ensign (R-NV)'s statement that "I don't think the average family can afford an additional $3,000 per year being taken away from their budget. That's not the right thing to do."
  • On the March 31 edition of Special Report, chief Washington correspondent Jim Angle stated that "[a]n impartial analysis from MIT makes clear the price" of cap-and-trade "will be substantial." He then aired Sen. Judd Gregg's (R-NH) statement, "And their estimate is it will generate over, over $300 billion in new taxes every year. It works out to about $3,000 per household."
  • On the May 22 edition of Lou Dobbs Tonight, correspondent Ines Ferre stated that "[t]he Environmental Protection Agency estimates the proposed system in the U.S. would have a modest impact on costs to households. The group Americans for Tax Reform disagrees." Ferre then aired a clip of the group's Brad Johnston, who stated: "We've done studies that show that rates are going to increase on every single American family by on average $1,500 a year. That's being conservative."
  • On the May 20 edition of Hannity, host Sean Hannity claimed that "cap and trade will add $3,000 in a new tax to the average American family."
  • On the April 29 edition of On the Record, host Greta van Susteren did not challenge Rep. Mike Pence's (R-IN) assertion that Democrats "are planning a national energy tax that will raise the cost of utilities on every American by thousands of dollars a year."

From the March 25 edition of CNN's The Situation Room:

[begin video clip]

ENSIGN: You -- you don't need to do one formal plan. You take their basic structure, and you radically amend it. We're going to have some huge amendments that will show a different vision forward that won't --

BLITZER: Give -- give me an example.

ENSIGN: -- that won't -- well, first of all, we're not -- we will have an amendment as far as cap and trade is concerned. We don't want -- we don't want a massive electricity and an energy tax put on the American people.

BLITZER: Even if it's going to reduce carbon emissions and make the planet safer?

ENSIGN: Well, I don't think the average family can afford an additional $3,000 per year being taken away from their budget. That's not the right thing to do.

The other thing is, is the massive amount of spending that goes into this bill. We end up running up our children's credit cards to a point where today we spent about $180 billion a year on interest per year? That's what we pay on our debt, which is a massive amount right now. By the end of this 10-year -- president's budget, it goes to over $800 billion a year.

[end video clip]

BLITZER: All right, you just heard Senator Ensign outline the reasons he doesn't agree with the president's budget.

From the May 22 edition of CNN's Lou Dobbs Tonight:

KITTY PILGRIM (guest host): President Obama's energy policy overhaul passed its first major test in Congress last night. The house energy committee approved the bill designed to drastically reduce industrial pollution. The so-called cap and trade plan would set a federal limit on greenhouse gas emissions by industry and allow businesses to buy and sell permits to stay within those rules. But the idea has plenty of critics including those who say it's another tax on business and it hasn't worked in other countries. Ines Ferre reports.

[begin video clip]

FERRE: Cutting greenhouse emissions is the hot topic in Washington. Cap and trade would require polluting businesses to obtain permits to emit carbon monoxide. The permits would be traded in an auction market. Environmentalists say it will incentivize businesses.

FRED KRUPP (Environmental Defense Fund): It will mean America is producing the sorts of new devices and new machines that are ultra efficient, low carbon, and we will be able to sell those overseas. It means we'll have a planet to give to our children.

FERRE: Europe has a cap and trade system but a Government Accountability Office report says between 2005 and 2007 that model did not help the economy. It says power producers passed costs on to consumers and concluded, quote, "carbon offsets involved fundamental tradeoffs and may not be a reliable, long-term approach to climate change mitigation."

The conservative group Heritage Foundation says despite changes in the EU model, cap and trade won't work in the U.S.

BEN LIEBERMAN (Heritage Foundation): We haven't seen a reduction in emission due to the cap and trade system in Europe and we have seen economic problems there, higher unemployment, higher energy costs in Europe compared to the United States in part due to the cap and trade system there.

FERRE: The Environmental Protection Agency estimates the proposed system in the U.S. would have a modest impact on costs to households. The group Americans for Tax Reform disagrees.

BRIAN JOHNSON (Americans for Tax Reform): We've done studies that show that rates are going to increase on every single American family by on average $1,500 a year. That's being conservative.

FERRE: The Heritage Foundation study claims that with a cap and trade system 1.1 million jobs would be lost by 2035. But the Obama administration expects the plan to create jobs and help curb reliance on foreign oil.

[end video clip]

FERRE: Proponents say the U.S. would ease into the cap and trade system and avoid the blunders Europe went through, but critics fear that in the long run consumers will end up paying for emission allowances and jobs will go overseas where emission standards aren't so strict -- Kitty.

From the March 31 edition of Fox News' Special Report:

BRET BAIER (host): Cap and trade is controversial, to say the least. Its supporters and the White House believe the only way the bill can pass is to offset the costs for those who get hit with higher utility bills. But that promise is now up in the air, along with cap and trade's prospects for survival. Chief Washington correspondent Jim Angle explains.

[begin video clip]

ANGLE: Energy is one of President Obama's top three priorities and his signature proposal is a new tax on carbon emissions such as coal-fired power plants. But even he acknowledged during the campaign that would make utility bills soar.

OBAMA: Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.

ANGLE: Because Mr. Obama would impose a new tax on all emissions, utilities would suddenly have to pay huge sums to continue doing what they now do for free, especially those who use coal, which generates half the nation's entire electricity. The president concedes increased costs will be passed on to consumers. An impartial analysis from MIT makes clear the price will be substantial.

GREGG: And their estimate is it will generate over -- over -- $300 billion in new taxes every year. It works out to about $3,000 per household.

ANGLE: Some say less, some say more. And in states relying the most on coal, it could be a lot more. But whatever it is, Mr. Obama and his aides say all but a small portion of those revenues should go to consumers to soften the blow of higher utility bills, for both individuals and businesses, until cheaper clean energy alternatives can replace coal and other fuel. And supporters of cap-and-trade say that is the only way to pass it.

From the May 20 edition of Fox News' Hannity:

HANNITY: Let me ask you, because now we have -- the government is actually, through bankruptcy, going to own General Motors. They literally are forcing creditors of Chrysler to take pennies on the dollar and intimidating them in the process. We've quadrupled the deficit in one year to $1.8 trillion this year alone, all in the name of, quote, "saving the economy." We're going to nationalize health care on top of all of this. And cap-and-trade will add $3,000 in a new tax to the average American family.

At some point, is this beginning to resonate? Do people begin to get it -- in other words -- because Obama's popularity still remains at a relatively high number.

NEWT GINGRICH (Fox News political contributor): Well, I think there's a big disassociation from Obama and the government that he heads.

From the April 29 edition of Fox News' On the Record:

VAN SUSTEREN: On the part of the press asking questions or on a part of the president answering? Because, I mean, there's only an hour, you don't get follow-up questions, you know, so it's hard for the press and --

PENCE: Yeah. Well, you know me, I'm a big champion of a free and independent press. I don't want to criticize people in the room, but for heaven sakes, Congress just adopted the most fiscally irresponsible budget in American history today. The president mentioned it in his opening statement. It'll -- president's budget will double the national debt in five years, it'll triple it in 10. There was no discussion about this -- this -- you know, borrowing and spending and bailout spree that has dominated the first hundred days. And there were no questions and no discussion about the fact that the president and his party in Congress are planning a national energy tax that will raise the cost of utilities on every American by thousands of dollars a year.

VAN SUSTEREN: My guess is that there were journalists in that room who had those questions, and I mean, it's just so random, and as you sit there and you only have an hour, and not everybody gets a question, but I mean, there's no -- I mean, there's no question the economy and the budget is an important issue, and it's regrettable that there isn't the time, and we didn't get the questions out.

* Media Matters searched the Nexis database transcripts of Situation Room, On the Record, Hannity, Special Report, and Lou Dobbs Tonight following June 18 for the search terms ((CBO or Congressional Budget Office) and (cap or climate or global)).

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