Hearing on “Ensuring and Enhancing U.S. Competitiveness While Moving to a Clean Energy Economy.”
July 16, 2009
I want to welcome our witnesses today, especially Harry Alford, president of the National Black Chamber of Commerce. It’s good to see you again Harry, and I look forward to your testimony.
I think Harry, as well as many in this country, would say that today’s hearing rests on faulty logic, which goes as follows: if government imposes taxes and mandates, increases bureaucracy, and spends without restraint, then government can transform the economy and create jobs.
This is the faulty logic of cap-and-trade, designed to hide what cap-and-trade truly is—a massive new tax on American families—and what it would do—destroy jobs here at home and send them to China and India.
The faulty logic of cap-and-trade has no basis in history. The Democrats should familiarize themselves with the work of Christina Romer, who is chairman of President Obama’s Council of Economic Advisors.
Before she became a White House economist, Romer published multiple studies on the impact of tax policy changes over the past 100 years. What she found was straightforward. She concluded that, “tax increases appear to have a very large, sustained and highly significant negative impact on output.” In other words, as the Wall Street Journal wrote, “tax hikes are an anti-stimulus.”
Let’s be clear: Waxman-Markey is a tax increase on the American people. That’s the whole point of cap-and-trade, which is to make energy more expensive so we use less of it. You could call it tax and ration.
With that in mind, I read an economic analysis of Waxman-Markey commissioned by Harry’s group, the National Black Chamber of Commerce. As the report found, “Claims that GHG cap-and-trade can boost total employment have become commonplace…These claims are incorrect, and the hopes that spring from them are destined to lead to disappointment.”
Waxman-Markey supporters say the bill will create “green jobs”. That’s fine, I support such jobs; but as the Black Chamber study found, “the number of these new ‘green jobs’ will be lower than the number of the other jobs that [Waxman-Markey] would destroy elsewhere in the economy.”
In total, Waxman-Markey would cause a net reduction of 2.3 million to 2.7 million jobs. Again, that’s a net reduction, including green jobs.
This is a fact that cap-and-traders don’t want the public to know. In the final analysis, despite what its supporters say over and over again, Waxman-Markey is not a jobs bill, it’s a big government pink slip.
We hear similar claims about government creating jobs before. Earlier this year, the Obama Administration and the Democrats said the $787 billion stimulus bill was desperately needed to create jobs. They sold a big government spending bonanza as a jobs bill. So what’s happened since the stimulus bill became law on February 17th?
Thanks to Vice President Biden, we know that the “Administration misread how bad the economy was.” At the time of passage, President Obama said the stimulus would create or save 3.5 million jobs. But since that promise, unemployment has increased, from 8 percent to 9.5 percent, hitting a 26-week high.
As Mort Zuckerman wrote in the Wall Street Journal, “The cumulative job losses over the last six months have been greater than for any other half year period since World War II, including the military demobilization after the war.”
So the question is: how can you trust those who now talk about creating green jobs, when under their watch, and, I would argue, because of their policies, more and more people are losing their jobs? In the case of Waxman-Markey, the same advocates of the failed stimulus bill are pushing another big government scheme to “create” jobs. It hasn’t worked with the stimulus, and it won’t work with cap-and-trade.
Let’s take this analysis a step further. This so-called jobs bill is a 1,400-page contradiction, which its supporters implicitly acknowledge but don’t want to talk about. So I ask: why does a jobs bill include an unemployment insurance program? Why does a jobs bill include federal assistance for relocation and job searching?
This bill hands out pink slips to workers and then promises the unemployed that they will get assistance from the government. Message to the Waxman-Markey unemployed: don’t hold your breath.
If this bill actually created jobs, then there would be no need for any of this. The Republican plan is different; it rejects new taxes and mandates and, instead, encourages opening access to domestic energy resources, removing barriers to innovative clean energy technologies, and allowing all forms of energy to power this great machine called America.
We don’t have unemployment provisions in our plan because it puts people to work, right here at home. That means a stronger economy and a nation less dependent on foreign energy.