The White House National Economic Council testified before the Senate Finance Committee that President Obama's proposed cap and trade system could raise "two-to-three times" the administration's existing $646 billion revenue estimate. This could mean the cap and trade system could actually generate between roughly $1.3 trillion and $1.9 trillion between fiscal years 2012 and 2019. The administration's plan is for excess revenues from any cap and trade bill that passes Congress will be used to compensate vulnerable families, communities and businesses. The administration's proposed 'Making Work Pay' tax credit will compensate most working Americans for the likely rise in utility costs they could expect to face after a cap and trade system goes into place. That tax credit is worth $800 per year to a household of two earners with combined annual income below $250,000.
The cap and trade proposal is aimed at lowering carbon emissions into the atmosphere by companies by requiring them to purchase credits for the level of pollution they contribute. The public forecast was based on the carbon-dioxide credits that would be issued through the new system being priced at $20 each. Each credit allows for one ton of carbon dioxide to be emitted.
According to the budget, the administration would use $120 billion of the scheme's revenues to fund clean energy technology. The balance of $525.7 billion would pay for a tax cut targeted to middle class Americans, a centerpiece of the Obama budget. (WJS, 3/18/09)