Will the President's budget pass? The cap-and-trade part is in trouble (HT: Drudge). But if the cap-and-trade part is dead, where is the money going to come from to begin to cover the increased expenditures? This is going to get interesting. Remember, the bottom 98% "won't pay an extra dime." Either that promise is going to get broken or the size of the budget will get smaller.
They don't have the votes
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The Federal government always comes up with the money. If the Chinese won't fund it, the Federal Reserve will.
I wish it were as inefficient as the proverbial "printing money". Instead the FR just keys in an amount on a computer and POOF! they suddenly have money to buy another trillion dollars of US government bonds.
From what I've been reading, the cap and trade revenue is such that 80% of it will be distributed "lump-sum" as a tax credit and 20% will be used to fund alternative energy projects. So it seems if that is what is holding it back they could have basically the same budget without that program.
"80% of it will be distributed "lump-sum" as a tax credit"
any idea how? it hasn't made sense to me. either we get back what we paid, which wouldn't make much sense and would be difficult and costly to determine, or it would be redistributionary.
Either that promise is going to get broken or…
You say that like it would be some big amazing unprecedented event for Team Obama to "reevaluate" a promise, like there's any actual barrier of momentousness to doing so.
Geez, where've you been since last spring? Don't remember the Obama of the Democratic Primary, to compare to Obama the President. a rather different fellow?
I don't think Team Obama wastes two seconds worrying about this "promise." It's a "promise" in the sense that it states the policy they'll follow just as long as it's convenient, and not a minute longer.
"Read my lips,…" GHW Bush
There is a third option – deficits get larger. They have been doing that for years and no one really notices the impact because it is too far removed from the action.
hutch said,
"any idea how? it hasn't made sense to me. either we get back what we paid, which wouldn't make much sense and would be difficult and costly to determine, or it would be redistributionary."
Lump-sum means each person receives total revenue / people, so you don't get back what you spent on the carbon tax, you get back the average of what everyone spent. If you are a heavy carbon user, you would be a net tax payer, if you are a light carbon user you will be a net receiver. Compared to the current situation it is indirectly redistributional as carbon use tends to correlate with income and wealth.
Charlie
I'm betting the utilities get nailed for a few hundred billion, the electric rates go up for everybody, the promised tax credits never materialize, and joe and jane american ends up footing the bill for most of it… and yet, after all is said and done, obama will claim to have kept his promise to that bottom 98% of us.
How so? to a politician, a tax isn't a tax unless they CALL IT a tax.