The proposed Kerry-Lieberman cap-and-trade bill could cost 1.9 million jobs and slash the U.S. gross domestic product by up to $2.1 trillion, according to an analysis released today.
The proposal, known as the American Power Act and facing stiff Republican opposition, also would increase residential electricity prices up to 42 percent and gasoline prices up to 18 percent, according to the analysis released today by the American Council for Capital Formation and the Small Business and Entrepreneurship Council.
The study, which the Science Applications International Corp. did based on assumptions provided by the capital and small business groups, assesses the bill’s impact on manufacturing, jobs, energy prices, and the overall U.S. economy. The two groups released national data and plan to unveil state-specific analyses for all 50 U.S. states in the coming days, according to a news release.
The study results reflect a combination of the Kerry-Lieberman provisions and assumptions of the American Council for Capital Formation about future electricity generation technology.
Margo Thorning, senior vice president and chief economist for the capital formation council, said, "The analysis shows strong negative impacts from the American Power Act on economic and job growth and severe impacts on manufacturing given our assumptions about the potential deployment of future generation technology. This is exactly the wrong prescription to restore the vitality of the U.S. economy."
Karen Kerrigan, president and CEO of the small business group, said, "The report makes clear that Kerry-Lieberman would impose additional burdens and hardship on small business owners, who have suffered considerably during this recession. Come November, federal lawmakers will be hard pressed to explain their support for such a costly, economically damaging plan, especially to voters who are out of work or struggling to make ends meet. Small business owners cannot create more jobs when costly policies such as Kerry-Lieberman take more of their hard-earned resources."
In doing the study, researchers accounted for all present federal energy laws and regulations, as well as increased access to oil and natural gas supplies, new and extended tax credits for renewable generation technologies, increased world oil price profile, and permit allocations for industry and international offsets. They also included assumptions regarding the likely availability of domestic and international offsets — key factors influencing analysis of the cost of limiting greenhouse gas emissions.
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