When political analysts think back on what happened in the 2006 election, the most common narrative is that the Democrats were swept into power because of the public’s frustration with the lack of progress in Iraq. Yet these anti-war sentiments were only part of the story. The public was also frustrated by Congressional corruption; several Republican Members retired in scandal having been found to have been abusing the public trust. Stories of runaway, wasteful spending were commonplace.
The Democrats promised a new direction. Not only did they vow to fight to end the war in Iraq, they also promised transparency, a return to fiscal responsibility, and to help American families struggling to make ends meet. Many Democratic Members have themselves expressed frustration with their inability to enact their agenda, in particular to force a timetable for troop withdrawal in Iraq. Yet even their victories might give some of their voters pause.
Consider the energy bill that was passed the House of Representatives last week and is now before the Senate. This bill (crafted behind closed doors during the Thanksgiving holiday to avoid any public scrutiny) doesn’t offer any solutions to the problems of rising gas and heating prices, and in fact will make problems worse and consumer hardships more painful. Energy prices have been on the rise due to an increase in demand. To bring prices down, the United States needs to increase supply. Yet this energy bill does nothing to increase supply, which is why the Republican opposition dubbed the legislation the “no energy” plan.
In fact, according to an analysis by CRA International, the additional taxes on the oil and natural gas industry and restrictions on drilling contained in this legislation could lead to a decline in oil production of 4% from baseline levels and 2% decline in domestic natural gas production between 2010-2020. This would mean that consumers would be competing for a smaller pool of energy and therefore would see prices rise higher.
Higher fuel costs will have serious consequences for the broader economy. Increased energy prices ripple into just about every sector and daily staple of life since consumers would be bearing the increased costs associated with transporting goods across the country, keeping the factories running, and ensuring the office lights stay on. All told, CRA estimates that the proposed legislation would create a net loss of nearly 5 million jobs, decrease the average households purchasing power by $1,700, and cost the economy nearly one trillion dollars by 2030.
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