Fox still peddling debunked cap-and-trade cost figure

On the June 26 edition of Fox & Friends, Fox News advanced the conservative claim that Democrats' cap-and-trade plan will cost American families $3,100 per year, a figure based on congressional Republicans' distortion of a 2007 Massachusetts Institute of Technology (MIT) study that has been discredited by one of the study's authors. Co-host Gretchen Carlson said that "the goal of the bill is to reduce emissions by 2020, but some say it's just another way to get more money from taxpayers without them realizing it," and an on-screen graphic read, "Cold to the climate bill: Some say could cost $3,100 per household." Later, libertarian author Wayne Allyn Root -- who Carlson hosted to discuss the bill along with conservative columnist Ann Coulter and Rock the Vote former president Jehmu Greene -- said the plan is "the biggest tax increase in history" and that the "people in control now are not even liberal, they are socialist." During the segment, no one mentioned that the Congressional Budget Office (CBO) estimated that in 2020, the bill would have an average cost of $175 per household per year -- a fact co-host Steve Doocy mentioned in a segment on the bill about an hour later.

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."

Nevertheless, as Media Matters for America has repeatedly noted, numerous cable news programs and conservatives in the media have seized on the number, reporting it as fact even after it was discredited.

In a later segment, House Majority Leader Steny Hoyer (D-MD) said that "opponents of the bill are using wildly inflated figures which are not supported by the facts," after Doocy said that "critics of this say that it's going to cost the average American family $3,000 a year, and others have said -- the CBO -- the Congressional Budget Office -- said maybe $175 a year. What is the answer, according to your calculations?" Hoyer said, "EPA [Environmental Protection Agency] and CBO, which is the independent fiscal analyst that serves the Congress and indeed the government, indicates that it's going to be about maybe 140 to 175 dollars per year, and that means about the cost of a postage stamp per day."

Indeed, CBO estimated in a June 19 analysis of the American Clean Energy and Security Act (H.R. 2454) -- a cap-and-trade bill recently passed out of the House energy committee -- 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 $175 per year. CBO stated that its analysis "focuses on the effect of the legislation in the year 2020, a point at which the cap would have been in effect for eight years (giving the economy time to adjust) and at which the allocation of allowances would be representative of the situation prior to the phase-down of free allowances." The EPA estimated in a June 23 analysis of the bill that the average cost to households averaged over the years 2010 to 2050 will be between $80 and $111.

From the June 26 edition of Fox News' Fox & Friends:

CARLSON: Welcome back, everyone. Big day on Capitol Hill today. Why? Because the House is set to vote on the cap-and-trade bill, also known as the climate change bill. But, do you care?

Well, you should, because the goal of the bill is to reduce emissions by 2020, but some say it's just another way to get more money from taxpayers without them realizing it. So, in the Pundit Pit today, Jehmu Greene, the former president of Rock the Vote; Wayne Allyn Root, libertarian vice presidential candidate in 2008 and author of Conscience of a Libertarian, due out July 20th; and Ann Coulter, columnist and author. Good to have all three of you this morning.

All right, Ann, let me start with you on this whole cap-and-trade situation. It looks like it will pass the House. What will happen in the Senate, and why did Al Gore not show up yesterday to talk about it?

COULTER: He was too busy turning out the lights in his 8,000-square-foot home or flying private some place. I mean, boy, with hypocrisy in the air right now, let's just talk about the real hypocrites, these global warming people telling us the world is coming to an end, when really not changing their lifestyles at all with the private planes.

I mean, it's one thing to be a fallible person. I didn't think any of these politicians who end up in affairs would say, "But I don't really believe the Bible." No, they do. They fall. It's not like Al Gore just, oh, he slipped one time and used a private plane. But no, it is for the little people, and it's not going to be that much of a hidden tax.

People are going to notice pretty quickly when their heating bills go up, especially, by the way -- I mean, it's noticeable that it hits states like Missouri and Wyoming, red states the most where basically there will be no coal. You're going to have coal workers out of business. Heating oil costs are supposed to -- or energy costs to a home are supposed to go up, double within five to 10 years -- we're in the middle of a recession.

CARLSON: Jehmu, I have got to get you in here.

GREENE: This is absolutely not about Al Gore turning off lights, this is a jobs bill. This is about holding the polluters accountable, and about providing new green jobs that are absolutely necessary.

COULTER: Those don't work.

GREENE: People will pay very close attention and recognize right away when these new jobs come into their communities, and that's what President Obama and that's what Democrats in the White House --

CARLSON: But what about the taxes, Jehmu? Because President Obama did promise during the campaign that he was not going to raise taxes on people who earn under -- couples who earn under $200,000 a year. And by all accounts, everyone has electricity, so they will be paying taxes.

GREENE: Well, it's really important that we attack global warming on a very concerted front, and I think that as we --  

CARLSON: So it would go against his campaign promise.

GREENE: I don't necessarily think it's going against his campaign promise, because his campaign promise was to increase new green jobs, it was to hold the polluters accountable. And he is doing that with this bill, and we'll be able to get the votes through the Senate.

CARLSON: Wayne?

ROOT: Let me speak as a small businessman. You know, I expect to be the Ross Perot of 2012. I expect to be the libertarian presidential nominee. And I'm a small businessman. And every small businessman I know is going out of business or hanging on with their fingernails by using their own money to keep their business alive.

We can't afford this tax increase. I don't know a single businessman -- I don't know a single person who can afford to have their electric rates doubled or tripled. But worse, instead of cap and trade, they should just call it destroy trade, because the United States has such a competitive disadvantage.

India and China are not going to pass this bill. So their industries have no problem, while we are going to put industry out of business. It's a disaster in what I think is not a recession but a depression, and it's crazy to pass the biggest tax increase in history in the middle of a depression. These people in control now are not even liberal, they are socialist. There's no question about it.

CARLSON: OK, I gotta -- we'll have to see what the Senate does, because it looks like it's going to pass the House. I gotta move on really quickly to Michelle Obama, because she got rid of her chief of staff, and it appears like she wants her role to change.

[...]

BRIAN KILMEADE (co-host): The climate change bill hits the House floor, and it's happening today. And if it goes through, this green initiative will cost you big bucks, perhaps. So is now the time to be increasing taxes?

DOOCY: Let's talk to House Majority Leader Steny Hoyer from the great state of Maryland, who joins us live from Capitol Hill. Good morning to you, sir.

HOYER: Good morning. Good to be with you.

DOOCY: OK, it's great to have you as well. There are so many numbers floating around regarding the whole cap-and-trade idea. I read one thing -- critics of this say that it's going to cost the average American family $3,000 a year, and others have said --

HOYER: Well, that's --

DOOCY: -- the CBO -- the Congressional Budget Office -- said maybe $175 a year. What is the answer, according to your calculations? How much it's going to cost us if it does pass?

HOYER: Well, EPA and CBO, which is the independent fiscal analyst that serves the Congress and indeed the government, indicates that it's going to be about maybe 140 to 175 dollars per year, and that means about the cost of a postage stamp per day.

The fact of the matter is, though, that there's no tax in this bill. This is an attempt through the free market system to address the global warming issue, to make us energy independent, and to focus on innovation and the development of renewable energy sources which will make us energy independent in the future, which is critical for our national security.

So, I think the opponents of the bill are using wildly inflated figures which are not supported by the facts. It will obviously have some cost to invest, but it will also, we think, spur business, create jobs and a green economy.

CARLSON: But do you believe this one particular number -- because the new rules will eventually cost the average household an extra $175 a year. Do you believe that number to be correct?

HOYER: I think it's in the ballpark, yes. That's, as I said, the CBO number -- EPA agrees with that number -- and, if so, I think that's pretty close to the projected possible cost of this bill. But it also will spur, I think, the growth in our economy, the creation of green jobs, and hopefully selling clean energy technology to the rest of the world.

Because, obviously, what the United States does, no matter how effective we are in cleaning our environment, we know that if China and India and other growing industrial nations -- huge industrial nations in the world keep polluting, that our efforts alone will not do the trick. So, it has to be a global effort.