Efficiency First

Partisan legislators talk up false claim that Waxman-Markey will cost families over $1,700 a year

Last Sunday on Meet the Press, House Minority Leader John Boehner (R-Ohio) repeated a talking point that’s been making the rounds among conservative bloggers and a few legislators on the fringe of the energy policy debate in Washington. In the course of a discussion about health care reform, Rep. Boehner made reference to the energy legislation that is now pending on Capitol Hill, describing the proposed cap-and-trade system as “this big giant tax on the American people that this week, we just find out, the Treasury Department said will cost the average family $1,700 per year.”

It turns out that Rep. Boehner and others who have been touting this figure – including Tennessee Sen. Lamar Alexander, Alaska Sen. Lisa Murkowski and Oklahoma Sen. James Inhofe – were badly misinformed.

Factcheck.org, a nonpartisan watchdog group run by the Annenberg Public Policy Center, and PolitiFact.com, a Pulitzer Prize-winning investigative arm of the St. Petersburg Times, have identified the source of the figure as CBS News blogger  Declan McCullagh, who claimed in a Sep. 15 posting that “the cost per American household would be an extra $1,761 a year.”  According to Factcheck.org:

McCullagh was referring to an internal Treasury Department memo. Christopher Horner, a senior fellow at the Competitive Enterprise Institute, which describes itself as a “public interest group dedicated to free enterprise and limited government,” obtained a redacted copy of the previously unreleased document via a Freedom of Information Act request. (The Treasury later released an unredacted copy.) But the $1,761 figure that McCullagh referred to doesn’t appear in the document CEI obtained.

McCullagh came up with the figure by taking $200 billion, the Treasury document’s high-end estimate for revenue the government could possibly collect from a cap-and-trade program, and dividing it by 113.5 million, the current number of U.S. households, according to the Census Bureau. The Treasury documents don’t actually contain an estimate for costs to households at all. Plus, Treasury wasn’t examining specific legislation, and McCullagh’s rough calculation doesn’t take into consideration financial assistance that Democrats have proposed giving to families to offset higher energy costs.

Alan B. Krueger, Treasury’s assistant secretary for economic policy, has called McCullagh’s estimate “flat out wrong.” According to a spokeswoman for the department, the memos were not based on an independent analysis of any specific proposal, including the American Clean Energy and Security Act of 2009, cosponsored by Democratic Reps. Henry Waxman of California and Ed Markey of Massachusetts.

For more in-depth analysis of why this mythical “energy tax” is bogus, read the full postings at Factcheck.org and PolitiFact.com.

Watch Rep. Boehner on Meet the Press here: