American Power Act-Wacky Marxist With A New Name

VALVO: Cap-and-trade magic show
Carbon offset plan puts a new face on an old illusion

It's possible Mr. Kerry and Mr. Lieberman can pull a rabbit out of a hat on this one, but I doubt it.

The trick with any global warming bill is to convince enough people that everything will change but nothing will hurt. You need enough details to appease environmentalists, while using enough sleight of hand so that no one else can tell what you're doing. This is why politicians have abandoned a straight carbon tax - it's too obvious. It's no surprise that Congress hasn't passed a global warming bill - this is a pretty hard trick to pull off.

Sen. John Kerry, Massachusetts Democrat, (he served in Viet Nam) and Sen. Joe Lieberman, Connecticut Independent, have unveiled their latest effort, the American Power Act, which tries to put a new face on an old illusion. Instead of using the same, tired, global warming rhetoric the American people have soundly rejected, the Kerry-Lieberman bill is supposedly about national security or energy independence. However, the core of bill is the same cap-and-trade proposal that would drive up energy costs, cripple domestic industries and cost American jobs - with one key difference.

Kerry-Lieberman changes the landscape by using a sector-based approach. The bill targets any source with more than 25,000 tons of greenhouse gas emissions per year, which the authors estimate would affect 7,500 sources. These sources are then divided into three sectors: power plants, manufacturers and transportation. This is cap and trade via divide and conquer. By establishing separate programs for these major sectors, Kerry-Lieberman attempts to use giveaways to buy off enough opposition in each sector to pass the bill.

However, Kerry-Lieberman is more similar to Waxman-Markey than it is different. Both bills threaten green tariffs on countries that don't self-inflict austerity measures. They both include massive subsidies for politically favored energy sources and use welfare-style energy rebates to buy off consumer outrage.

Both bills also fail to put caps on either agriculture or forestry. The reasons are twofold. Simply put, farm state lawmakers would never support a bill that attacks agricultural emissions. This played out in the Waxman-Markey process when House Agriculture Committee Chairman Collin Peterson, Minnesota Democrat, successfully obtained absolution for farmers in exchange for his caucus' votes.

Second, cap-and-trade bills need to sell offsets as a supplemental way for covered sources to get under the cap. Both bills allow 2 billion tons in offsets per year. Land use, soil treatment and trees are the easiest ways to generate offsets. If agriculture and forestry were forced to account for their own emissions, they would simply consume all of their own offsets and would have nothing left to sell back to other regulated sources. Carbon offsets are the farm subsidies of the 21st century, which is sure to please hesitant farm state senators.

It's no wonder trust in government is at an all-time low. Citizens have seen this game before and they know what cap and trade means for them. It would be refreshing for a politician to embrace the true costs of the bill and not pretend central energy planning comes without significant pain.

You'll Find Out When Its Law

Obstensibly thinking by then it will be too late to do anything about it.

$1 Billion AT&T Headache is Just Obamacare's First Side Effect
In the closing days of the Congressional health care debate, House Speaker Nancy Pelosi (D-CA) told the National Association of Counties: "We have to pass the bill so that you can find out what is in it."

Today marks the end of just the first week of life under Obamacare and Speaker Pelosi has been proven right: we are just now finding out what is in it. This past Friday, AT&T, the biggest U.S. telephone company, announced that it would take a $1 billion charge against earnings thanks to tax changes buried in the 2,300+ page bill. $1 billion. That is a full third of AT&T's $3 billion earnings for the fourth quarter of 2009.

The tax charges stem from changes Obamacare makes to the tax treatment of prescription-drug benefits for retirees. Companies used to be able to deduct part of their costs for providing drug benefits to their retirees, but Obamacare cancels that deduction. Roland McDevitt, director of health care research at Towers Watson, tells the Wall Street Journal, they "have a stream of tax benefits they are losing way out in the future." Since companies had counted on these deductions for current and future retirees as an existing asset under the old law, accounting rules require firms to take the full loss for the change in the same quarter in which the tax law is changed. Hence Friday's announcement to inform shareholders that AT&T's bottom line was about to take a $1 billion hit.

AT&T's billion-dollar Obamacare headache is so large due to the size (281,000 employees) of the company. Piper Jaffray & Co. analyst Chris Larsen tells Bloomberg: "Companies like AT&T, that have large employee bases, are going to have higher health-care costs and, therefore, lower earnings unless they can negotiate something or offer less to their employees." And changes to current and future retirees' health care seem to be exactly what will AT&T will do as a side effect of Obamacare. AT&T wrote in their Friday filing: "As a result of this legislation, including the additional tax burden, AT&T will be evaluating prospective changes to the active and retiree health-care benefits offered by the company."

And AT&T is not alone. Towers Watson estimates that just this tax change alone will eliminate $14 billion in U.S. corporate profits. That's $14 billion less American employers have to spend creating new jobs when our unemployment rate is still 9.7%.

And AT&T is not the only company informing employees that Obamacare is going to mean worse care for them. Verizon Communications, the second biggest U.S. phone company, told employees last week that Obamacare "may have significant implications for both retirees and employers."

The Heritage Foundation will be keeping you apprised of all of the consequences of Obamacare as they are learned with our new Foundry feature "Side Effects." Already our health care experts have identified negative intended and unintended consequences from the legislation to children's health insurance and health insurance taxes.

The American people already do not like this law. But to repeal it, we must keep Americans educated about all of Obamacare's failures and offer our “Second Opinion” on what conservative idea would fix it.