REWARDING FAILURE, PUNISHING SUCCESS
Advocates of green energy have long argued that it's not just enough for the government to subsidize alternatives - it also needs to promote policies that make commercially competitive sources of energy more expensive.
This is the idea behind the controversial "cap and trade" bill that President Obama tried to pass through Congress in 2009, which would have established an elaborate and bureaucratic structure for allocating conventional energy sources. This bill passed the House, but it was unable to overcome bipartisan concerns in the Senate. Cap-and-trade legislation was deemed costly, economically harmful, and ineffective in its means and goals. But instead of accepting this verdict on its preferred policy, the administration decided to let the Environmental Protection Agency (EPA) carry out a unilateral plan to impose emissions restrictions on American businesses.
EPA Administrator Lisa Jackson is pushing for greenhouse gas emission standards for power plants, and although the President has temporarily delayed this move, he has not ruled out letting the EPA move forward with it in the future. If eventually enacted, the resulting rule would cost the country $1 trillion or more over a decade and millions of jobs. Similar severe costs to the economy influenced the President's decision to pull back EPA's proposal to prematurely readjust current ozone standards. In addition, the EPA's move to implement the final Clean Air Transport Rule and the Utility Maximum Achievable Control Technology on power plants in November could increase electricity costs amidst a struggling economy.
This reflects a larger push by the Obama administration to pursue energy and environmental policy through heavy-handed regulations, circumventing accountability to taxpayers and leaving decisions in the hands of the bureaucracy infrastructure. Unnecessary regulations tie the hands of small businesses and create an uncertain business environment, discouraging job growth.
A BETTER PATH FORWARD
Instead of Washington-knows-best government policy, the House-passed budget, The Path to Prosperity, advances fundamental tax reform to promote economic growth and job creation. Comprehensive tax reform would broaden the tax base; simplify the tax code by cleaning out many of the special exemptions and deductions in the tax code; and lower tax rates for both individuals and corporations. Cutting the marginal tax rates on labor and capital to increase incentives to work and invest would be the most effective and sustainable way to revive economic growth - in our energy sector and all sectors of the private economy.
The Path to Prosperity scales back the EPA's large budget increases to prevent it from imposing a job-destroying maze of regulations that would act as a national energy tax. It also assumes increased revenues from bonus bids, rents, royalties, and fees as a result of lifting moratoriums and bans on safe, environmentally responsible exploration for domestic energy supplies. As part of this effort, the House has already passed three major pieces of legislation on a bipartisan basis as part of its American Energy Initiative to expand domestic energy production and create new jobs. These bills are still waiting on action in the Senate.
The Path to Prosperity would continue to fund essential government missions, including energy security and basic research and development, while paring back spending for projects best left to the private sector. Ultimately, the best energy policy is one that encourages robust competition and innovation to ensure the American people an affordable and stable supply of energy. The House-passed budget would roll back federal intervention and expensive corporate welfare directed to the President's allied industries. Instead, it would promote policies aimed at reliable energy, lower energy prices, greater revenue generation through prosperity, and market-based solutions that advance the nation toward the goal of sustainable energy.