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Goodlatte Concerned About The Effects Of 'Cap And Tax' Legislation On 6th District Farmers And Consumers

Press Release

Location: Washington, DC


Today the House Agriculture Committee, on which Congressman Goodlatte serves, held a hearing on the so-called "American Clean Energy and Security" legislation, also known as "Cap and Tax", which was introduced by Congressman Henry Waxman (D-CA). The simple truth behind this legislation is that it raises taxes, kills jobs and will lead to more government intrusion.

The cap and tax proposal is really a $846 billion national energy tax that will hit nearly every American. Moving into a cap and trade system will place the United States economy at a distinct competitive disadvantage because it would place significant additional costs on every American business, farmer, manufacturer, and family.

In his statement from the hearing Congressman Goodlatte said, "Cap and tax legislation has the potential to devastate the agriculture community, in particular, with higher operating costs. The Agriculture Committee must be looking intensely into how this legislation will affect farmers, as well as consumers of agricultural products. The impact that this legislation will have on our economy and our very lives is extensive; we must make sure that we fully vet this legislation."

Agriculture is an energy intensive industry, and this legislation will make the cost of energy even higher. It is estimated that the Waxman legislation will raise electricity rates for farmers and all energy consumers by 90% after adjusting for inflation, gas prices 74%, and natural gas prices 55%. There is no doubt that this legislation will also raise the cost of fertilizer, chemical, and equipment which farmers use daily. This will cause serious economic harm for the American farmer. According to the Heritage Foundation, farm income is expected to drop because of this legislation by $8 billion in 2012, $25 billion in 2024, and over $50 billion in 2035. These are decreases of 28%, 60% and 94%, respectively. We cannot expect American agriculture to survive when we cut farm income by 94%.

Congressman Goodlatte expressed further concerns over the lack of support for the American forestry industry. The impetus for this legislation is to reduce carbon emissions, yet the Waxman legislation does not recognize the role that agriculture and forestry can play in sequestering carbon. The legislation does not specifically provide for agricultural or forestry offsets, but rather leaves eligible offsets to the discretion of the EPA. To add insult to injury, over 30 pages of this bill are devoted to developing international forestry offsets, including provisions to send American taxpayer money overseas to forest owners in developing countries, while disregarding our own forest owners.

"USDA has a long record of working with farmers and ranchers, and they have the extensive expertise in agriculture and forestry that will make an agricultural offset program successful," said Congressman Goodlatte. "This legislation needs to be amended to allow the USDA, not the EPA, to be in charge of administering agricultural offsets."

Goodlatte continued, "The Cap and Tax legislation has far reaching consequences for every person, farmer, and business in the country. We cannot ignore that America's economy is intrinsically linked to the availability and affordability of energy. During this economic slow-down we should be adopting policies that seek to rebuild our economy and create more jobs; we need reliable and affordable energy supplies. Unfortunately, cap and trade legislation would only further cripple our economy. Instead of government mandates and bureaucracy we should focus on policies that support technological advances and consumer choices. The bottom line is that we need policies which encourage investment in environmentally sound, cost-effective practices without stifling innovation and setting our economy further back. The simple truth behind the Waxman energy plan is that it raises taxes, kills jobs and will lead to more government intrusion."

Congressman Goodlatte is a cosponsor of the American Energy Act which will increase production of American-made energy in an environmentally-sound manner and promote new, clean and renewable sources of energy such as nuclear, clean-coal-technology, wind and solar energy. The legislation encourages greater efficiency and conservation by extending tax incentives for energy efficiency and rewarding development of greater conservation techniques and new energy sources. Finally, the American Energy Act cuts red-tape and reduces frivolous litigation that hinders energy production.

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