During the March 19 edition of Fox News' America's Newsroom, co-host Bill Hemmer did not challenge Sen. James Inhofe's (R-OK) claim that President Obama's proposal to cap annual carbon emissions and auction the right to pollute is “the most regressive tax that you can have, because ... someone who is very poor spends a very high percentage of his or her income on home heating, on gasoline, things -- energy that they have to buy. Someone who is well off, it's a very small thing.” Hemmer did not point out that, in proposing a cap-and-trade program in his budget outline, Obama addressed the issue of higher energy costs impacting consumers differently by proposing to return "[t]he balance of the auction revenues ... to the people, especially vulnerable families, communities, and businesses."

Moreover, in March 11 testimony before the Senate Budget Committee (accessed via Nexis), Energy Secretary Steven Chu stated, "[W]hen you have a cap-and-trade system, it will have impacts. And there is a sensitivity with the poor people in our country, and so there was a decision made that a certain fraction of it would try to offset the impacts."

From Obama's budget blueprint:

The Administration is developing a comprehensive energy and climate change plan to invest in clean energy, end our addiction to oil, address the global climate crisis, and create new American jobs that cannot be outsourced. After enactment of the Budget, the Administration will work expeditiously with key stakeholders and the Congress to develop an economy-wide emissions reduction program to reduce greenhouse gas emissions approximately 14 percent below 2005 levels by 2020, and approximately 83 percent below 2005 levels by 2050. This program will be implemented through a cap-and-trade system, a policy approach that dramatically reduced acid rain at much lower costs than the traditional government regulations and mandates of the past. Through a 100 percent auction to ensure that the biggest polluters do not enjoy windfall profits, this program will fund vital investments in a clean energy future totaling $150 billion over 10 years, starting in FY 2012. The balance of the auction revenues will be returned to the people, especially vulnerable families, communities, and businesses to help the transition to a clean energy economy.

From the March 11 Senate Budget Committee hearing:

SEN. [JIM] BUNNING [R-KY]: Okay. If that is the case, then why is your administration proposing that we dedicate less than 20 percent of the auction revenues from this assumed cap-and-trade program to emerging technologies in clean coal and renewables and over 80 percent of its tax credit that not every citizen and certainly not every small business will qualify for?

MR. CHU: Well, when you have a cap-and-trade system, it will have impacts. And there is a sensitivity with the poor people in our country, and so there was a decision made that a certain fraction of it would try to offset the impacts. But a significant amount of that would be for investing in the development of new technologies so we can get it out there faster.

[...]

SEN. [MIKE] ENZI [R-WY]: Except that we're about to make it a federal -- a federal issue and a federal tax because we're talking about cap and -- cap-and-trade which is a tax and that tax will be passed on to the consumer, and in the budget I noticed that yes, some of that is going to go to energy research and I think that's tremendous and provide maybe an incentive. It's kind of a back end sort of an incentive. But a portion of that is going to cover the increased taxes the people will have on the energy, which does give some recognition that it's the consumer that's going to -- going to pay the taxes.

I -- I thought that the purpose of a cap-and-trade was to have all of the money that was coming in from whatever was being taxed would go toward the solution of that tax. Does your department have any -- any role in how that's divided up?

SEC. CHU: I think the recognition that a significant part of the money goes to offset the, you know, the economic consequences -- (inaudible) -- poorest parts of our population is important but I also simultaneously believe that the money going into research and development so we can get much better solutions than we have today is actually essential. And so it's -- it's really what's the proper balance.

From the March 19 edition of Fox News' America's Newsroom:

HEMMER: So take that to the next level then. What does that mean to the consumer in America? What does that mean to a small-business owner?

INHOFE: Well, it's the most regressive tax that you can have, because the percentage of someone -- someone who is very poor spends a very high percentage of his or her income on home heating, on gasoline, things -- energy that they have to buy. Someone who is well off, it's a very small thing.

So it's just a huge tax increase, and a very regressive tax increase.

HEMMER: Is this going to get --

INHOFE: Now we found out --

HEMMER: Is this going to be pushed through, Senator?