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Thune Offers Common Sense Energy Amendment

Thune Amendment Seeks To Protect Consumers from Increase in Energy Rates

March 30, 2009

Washington, D.C. —  Senator John Thune today offered the first amendment to the Democratic budget that would prohibit the collection of funds from any future cap and trade proposal if that proposal would increase electricity rates and gasoline prices for American households and businesses.

"As American families and businesses are struggling to make ends meet during our current economic downturn, the last thing we should do is arbitrarily increase the cost of energy and basic goods and services," said Thune. "Cap and trade legislation that results in an increase in energy costs is a tax on every American, young and old, rich and poor. It will result in increased costs for basic goods and services such as food and clothing in addition to energy."

Last week, a hearing of the South Dakota Public Utilities Commission determined that cap and trade would increase the cost of electricity for South Dakotans by a minimum of 41 percent.

A 2007 Massachusetts Institute of Technology study of a proposal that is similar to President Obama's cap and trade framework concluded that every American family would face an increase of up to $3,128 in their utility bills annually by 2015.

In an interview with the San Francisco Chronicle prior to his election, President Obama stated that under his cap and trade plan "electricity rates would necessarily skyrocket." Peter Orszag, the President's Budget Director, testified before Congress in 2007 that utility providers would ultimately have to pass the costs of cap and trade on to consumers. He says that in addition to electricity, gasoline consumers would face higher prices as well.

In September 2008, Director Orszag testified before the House Committee on Ways and Means that an increase in energy prices would be a larger burden for middle and lower income families.

"As a candidate, President Obama promised not to raise taxes for middle class families. Higher energy prices that will result from cap and trade amount to exactly that: a regressive tax increase at the worst possible time," added Thune.

Senator Thune's amendment is especially important because numerous Democratic leaders in the House and Senate have expressed an interest in "fast tracking" a cap and trade plan via the budget reconciliation process. The budget proposal currently before the House of Representatives allows for reconciliation which effectively opens the door for a cap and trade proposal being included as part of any final budget that is put together - despite the fact that the budget currently before the Senate does not include any budget reconciliation language.

Senator Thune and his Republican colleagues will offer a series of amendments to the Democrat budget in an effort to provide alternative solutions that benefit taxpayers and reduce the overall spending and debt contained in the proposal that the Obama Administration is advocating to Congress.