Rising Fuel Prices Impact On Local Communities

[BrianTH]

Originally Posted by WILWRadio

The CBO is a non partisan entity? I noted a .gov in the URL indicating this is anything BUT a non partisan entity.

The Congressional Budget Office is nonpartisan in the sense they are neither Democratic nor Republican.

It would seem as though people earning the least amount of money will be hit hardest, especially those people that don't earn enough to pay Federal taxes. They will not be able to take advantage of any credits that are issued to help offset the increased cost of energy.

The direct payments to households aren't based on federal income taxes paid, and indeed are specifically targeted to low-income households. That is why the lowest-income households actually come out ahead.

Anyway, maybe it is best just to quote the CBO summary on all this:

Under H.R. 2454, about 30 percent of the allowance value—$28 billion—would be allocated in a fairly direct manner to U.S. households to compensate them for their increased expenditures. That relief to households would include the 15 percent of the allowance value set aside for a low-income energy rebate and a tax credit for households receiving benefits through the Supplemental Nutrition Assistance Program or through the Medicare Part D low-income subsidy, and for households not participating in those programs but with income below certain thresholds. It would also include about $14 billion in allowances given to companies that distribute electricity and natural gas, with instructions to pass those benefits on to residential customers.

Roughly 50 percent of the allowance value—$47 billion—would be directed to U.S. businesses to offset their increased costs. That amount includes about $14 billion provided to what are termed emission-intensive trade-exposed industries (which would be less able to pass their compliance costs on to their customers than would other industries facing less international competition) and oil refiners. It also includes $27 billion worth of allowances that would be given to local distributers of electricity and natural gas, with instructions to pass those savings on to commercial and industrial customers (as distinct from the amount passed on to residential customers noted in the previous paragraph). The value of the allowances received by businesses would ultimately accrue to households in the form of increased returns on their investments.

About 10 percent of the allowance value would be allocated to the federal government and to state governments to spend within the United States (not accounting for the amount used to fund the energy rebate and tax credit). For example, the bill would direct a portion of the allowance value to be spent encouraging the development of particular technologies (such as electricity generation that includes carbon capture and storage) and improvements in energy efficiency. The value of those allowances allocated to governments would ultimately be passed on to households in the form of higher wages, increased returns on their investments, or lower energy costs.