Middle Class, prepare to bend over
While the media has been focused on the daily barrage of Obama news items the greatest threat in history to the well being of those in the middle class is warming up in the bullpen.
On Friday, April 17 the EPA announced “that carbon dioxide and other greenhouse gas emissions pose a danger to the public’s health and welfare” and are now identified as pollutants under the Clean Air Act. To make matters even scarier:
If Congress doesn’t act, the Obama administration is likely to press ahead with at least some curbs on carbon dioxide and other pollutants blamed for global warming. While White House spokesman Ben LaBolt emphasized yesterday that “the president has made clear his strong preference that Congress act to pass comprehensive legislation,” he indicated that the new scientific finding may leave regulators little choice.
So, as Glenn Beck puts it, we’ll have the choice of poison (EPA regulations), or poison lite (the liberal substitute). Either way the middle class comes out a big loser.
Currently, the most popular “green solution” is cap and trade:
“The purpose of the cap, the way it works, is that you are capping fossil fuel energy–you’re limiting the supply to a lower level than would otherwise be used,” Robert Greenstein, executive director of the Center on Budget and Policy Priorities, told CNSNews.com last week. “Demand then has to fall to meet that level of supply at the cap level and demand falls by virtue of prices rising–this is basic economics.”
The immediate effects of cap and trade, of course, would be a sudden increase of the cost of every kind of fuel, from gasoline to electricity. While there are plans for lower income persons to be compensated by the government for rising utility costs, the picture for middle income folks is not quite so bright:
The Climate Equity Alliance focuses on promoting climate legislation that caters to low- and moderate-income energy consumers-and believes that funds collected from cap-and-trade proceeds should go to curb high energy costs for those consumers and for other green projects.
Greenstein said a 15 percent reduction in emissions would increase the average energy cost on a household with income around $15,000 by about $750 per household, he said.
According to the alliance, help could come in several different ways.
“We (Climate Equity Alliance) do believe consumer relief can be provided in part through the tax code for low-income working families, in part through the Electronic Benefit Transfer (EBT) system that every state in the country already uses,” he said.
However, the Climate Equity Alliance had this vague statement concerning the middle class:
“The alliance has called for adequate rebates to fully offset the impact on the budgets of low- and moderate-income consumers,” he said. “The alliance has not taken a position–and I’m not sure it intends to–on the middle-income issue.”
What the Climate Equity Alliance and others do not factor in, however, is the increase in the cost of goods and services caused by higher fuel and compliance costs. In the end, lower income Americans will have to bite the bullet to some extent, since aid to them will apparently be in the form of utility bill assistance and possibly bus tokens
Whichever acts, the EPA or Congress, the end result will be that the disposable income of the middle class will be greatly reduced, causing less demand for products and services which in turn will generate more layoffs and unemployment.
To add upon the burden of the carbon tax, the middle class has more to fear in the near future. In 2010 the Bush tax cuts expire, plus whatever new taxes are imposed in the 2010 budget. And then there’s the possibility that Obamas’s fantasy economics could spawn hyper-inflation in the near future and push what’s left of the middle class above the $250,000 threshold.
The EPA’s finding is subject to a 60-day comment period, presumably commencing on April 17. Perhaps something could be done to nip this in the bud. At the very least there’s quite a number of scientists who oppose this regulation and could throw in their two cents worth. Surely the EPA cannot ignore thousands of scientists .