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This Blog is designed to be a Diary of Events illustrating Global Climate Change, and where it will lead.

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Sunday, July 11, 2010

American Power Act will Cut US Deficit by $19 Billion

From: Laurel Hunt, Center for American Progress

If enacted, the APA, the comprehensive clean energy and climate bill co-sponsored by Senators John Kerry (D-MA) and Joe Lieberman (I-CT), would:

Increase revenues by about $751 billion over the 2011-2020 period and direct spending by $732 billion over that 10-year period. In total, CBO and JCT estimate that enacting the legislation would reduce future deficits by about $19 billion over the 2011-2020 period.

This week’s CBO analysis is yet another example of a report showing that comprehensive clean energy and climate reform is both economically and environmentally beneficial to the country. Furthermore, a revenue source is required in any energy legislation in order to finance and spur the coming clean energy revolution. While an energy-only bill would not be affordable on its own, this analysis shows that the APA could make our critical clean energy investment agenda possible.

In addition to slashing the deficit, APA provides opportunities for job creation, stimulation of a clean energy economy, and reduction of dangerous global warming pollution.

The legislation would also achieve all this while also providing relief to working families. APA is specifically designed to “provide tax credits, cash rebates, or rebates on utility bills to lessen the impact on consumers or households of higher prices that would result from the cap-and-trade programs,” and CBO estimates that APA’s Refundable Credit for Working Families Relief programs will provide $17.2 billion in support to working families via tax credit programs.

In response to the CBO’s new analysis, Senators Kerry and Lieberman issued a joint statement urging fellow senators to pass their legislation:

"There is no more room for excuses — this must be our year to pass comprehensive climate and energy legislation and begin to send a price signal on carbon. Many of our colleagues have said they flatly oppose anything that adds a penny to the deficit, so we hope they look anew at this initiative which reduces it".

Given that the federal government incurred a deficit of just over $1.0 trillion for the first nine months of the 2010 fiscal year, as CBO estimated in its most recent Monthly Budget Review, this finding should play an important role in the fight. The impact on revenues from the APA would largely result from the revenues collected from the greenhouse gas and HFC cap-and-trade programs (and a small amount of additional revenue would be generated by assessments levied by the Carbon Storage Research Corporation and from penalties collected for noncompliance).

Though there are a number of energy-only bills and oil spill bills floating around in the Senate, the American Power Act is the only among these that more than pays for itself. This CBO analysis clearly demonstrates that, if passed, the legislation will pave the road to simultaneous economic and environmental prosperity.

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