CBO: Waxman-Markey Costs about a Postage Stamp a Day, Saves Low-Income Families Money

June 20, 2009

Chairmen Henry A. Waxman and Edward J. Markey, co-authors of the Waxman-Markey American Clean Energy and Security Act (H.R. 2454) said that a new analysis of the bill by the Congressional Budget Office (CBO) shows the that the net annual cost of the legislation would be approximately $175 per household in 2020.  This analysis comes on the heels of a new study that found 1.7 million jobs would be created by the clean energy legislation.

"This analysis underscores that this legislation is effective and affordable," said Rep. Waxman. "It sets America on a course of energy independence while taking significant steps to reduce dangerous global warming pollution."

"Americans know that building a clean energy economy has real value, and this CBO analysis proves it," said Rep. Markey. "Low-income American families will see a $40 benefit from using more wind and solar energy and less foreign oil. And for the cost of about a postage stamp a day, all American families will see a return on their investment as our nation breaks our dependence on foreign oil, cuts dangerous carbon pollution and creates millions of new clean energy jobs that can't be shipped overseas."

CBO estimated the costs of H.R. 2454, the American Clean Energy and Security Act of 2009, to ascertain the average cost per household that would result from implementing the provisions that cap carbon emissions, as well as how the costs would affect different levels of household income.

CBO states "the Congressional Budget Office estimates that the net annual countrywide cost of the cap-and-trade program in 2020 would be $22 billion - or about $175 per household."

CBO specifically notes that this figure "does not include the economic benefits and other benefits of the reduction in GHG [greenhouse gas] emissions and the associated slowing of climate change."  In particular, CBO did not analyze the energy efficiency improvements and resulting savings in energy costs that will result from the ACES Act's investment of over $60 billion in the next ten years in energy efficiency and required improvements in energy efficiency.  One outside group, the American Council for an Energy Efficient Economy (ACEEE), has estimated that the benefits of the energy efficiency provisions in ACES, which generally were not included in the CBO estimate, will save consumers $22 billion in 2020 alone, with cumulative savings of $3,900 per household by 2030.

In addition, CBO found that households in the lowest quintile would see an average net benefit of $40 in 2020.  And overall net costs would average 0.2 percent of household after tax income.

To Download a copy of the CBO Letter (PDF) please CLICK HERE.

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