Pants On Fire

You know that whole GOP attack line on the cap and trade policy included in President Obama's budget that they refer to as a "light switch tax"? Turns out its....wait for it.....wait for it....TOTAL BULLSHIT.

"It's just wrong," said John Reilly, an energy, environmental and agricultural economist at M.I.T. and one of the authors of the report. "It's wrong in so many ways it's hard to begin."

Not only is it wrong, but he told the House Republicans it was wrong when they asked him.

"Someone from the House Republicans had called me (March 20) and asked about this," Reilly said. "I had explained why the estimate they had was probably incorrect and what they should do to correct it, but I think this wrong number was already floating around by that time."

It continues to float.

That's just not how economists calculate the cost of a tax proposal, Reilly said. The tax might push the price of carbon-based fuels up a bit, but other results of a cap-and-trade program, such as increased conservation and more competition from other fuel sources, would put downward pressure on prices. Moreover, consumers would get some of the tax back from the government in some form.

The report did include an estimate of the net cost to individuals, called the "welfare" cost. It would be $30.89 per person in 2015, or $79 per family if you use the same average household size the Republicans used of 2.56 people.

The cost would grow over time as the program ramps up, but the average annual cost over time in today's dollars — that is, the "average annual net present value cost" — is still just $85 per person, Reilly said. That would be $215.05 per household.

A far cry from $3,128. And that isn't the only inaccuracy in the claim.

The Republican press release said the cap-and-trade program would pay for "nationalized health care."

But Obama's health care proposal is not for "nationalized health care." It does call for a "National Health Insurance Exchange" with private insurance options plus a new public plan based on the one currently available to members of Congress — but consumers could still keep their private insurance if they want, as Obama emphasized during his presidential campaign.

Even if it were true that Obama wants to nationalize health care, he does not envision paying for health care reform with the cap-and-trade program as the Republicans alleged. Rather, his $634 billion health care reserve fund is to come from efficiencies in Medicare and Medicaid and decreased deductions for some charitable contributions by upper-income taxpayers, according to Obama's proposed budget.

The House Republicans partially corrected this portion of the claim, changing their Web site and sending out an updated press release that says the cap-and-trade program would pay for "increased spending" rather than health care.

But it still calls cap-and-trade a "light switch tax" and claims the whole cost would come from consumers.

If the Republicans had simply misstated the results of the MIT study, the Truth-O-Meter would have been content giving this one a False. But for them to keep repeating the claim after the author of the study told them it was wrong means we have to set the meter ablaze. Pants on Fire.

Update: One of the authors of the study that the Republicans site to explain their lies has written them what is basically a cease and decist letter and ThinkProgress got a copy.

It has come to my attention that an analysis we conducted examining proposals to reduce greenhouse gas emissions, Report No., 146, Assessment of U.S. Cap-and-Trade Proposals, has been misrepresented in recent press releases distributed by the National Republican Congressional Committee. The press release claims our report estimates an average cost per family of a carbon cap and trade program that would meet targets now being discussed in Congress to be over $3,000, but that is nearly 10 times the correct estimate which is approximately $340.