The final day of the presidential campaign focused in part on an issue of great importance to workers everywhere—the future of the coal industry. The San Francisco Chronicle revealed that earlier this year Senator Obama offered the following during the course of an interview: “If somebody wants to build a coal power plant they can, it's just that it will bankrupt them because they are going to be charged a huge sum for all that greenhouse gas that's being emitted.” Senator Obama immediately complained that the quote was taken out of context, and that he was in fact a “strong supporter” of the industry.
Yet this quote, and the insistence that listeners have somehow misunderstood, seems awfully familiar. After all, Senator Obama’s running mate, Senator Joe Biden, got into his own trouble over coal policy when he told voters “We’re not supporting clean coal…no coal plants here in America,” and then later clarified by reversing course.
This should be of particular concern to voters in key coal producing states— which also happen to be critical “swing” states like Pennsylvania and West Virginia. But all of us will be greatly affected by the next administration’s energy policy. And although the media hasn’t pressed Senator Obama on many of the details, a look at Senator Obama’s “New Energy for America” plan also makes his vision of energy in America clear: he wants to “invest” taxpayer money in favored alternative fuel endeavors, create new mandates for the use of renewable energy sources and higher fuel efficiency standards, and advance a so-called “cap-and-trade” program designed to reduce greenhouse gas emissions by taxing carbon, but which would greatly raise the costs of energy—particularly energy generated by fossil fuels like coal and oil.
Senator Obama is careful to throw a bone to the coal industry as a part of his official energy plan: the website proclaims: “Obama’s Department of Energy will enter into public private partnerships to develop five ‘first-of-a-kind’ commercial scale coal-fired plants with clean carbon capture and sequestration technology.” But it’s clear that Obama believes fossil fuel use should go the way of Atari and Betamax. And while those technologies were sunk by superior technologies in the competitive marketplace, a President Obama would use the power of the state to pick winners and losers in the energy industry. And make no mistake – coal and oil would be the big losers.
That shouldn’t just be of concern to those involved in the energy industry. Senator Obama claims to be a friend of the working class, by promoting progressive tax increases and refundable tax credits for many who currently don’t pay income taxes. Yet even those who are supposed to benefit from this redistribution should be cautious before assuming that an Obama presidency will be a boon to their financial fortunes.
After all, Senator Obama’s definition of who should be subject to tax increases has been changing throughout the campaign. Do we really want to take the chance that once elected, a President Obama would then simply state his previous tax policies were taken out of context, and that all taxpayers (actual taxpayers) will be subject to his costly whims and reversals? Moreover, if Senator Obama advances anti-business policies that “bankrupt” companies, that will lead to greater job loss. No tax rebate is going to replace the financial security that comes with having a paying job.
And Senator Obama’s tax proposals could act as a significant drag on business. He hasn’t suggested explicitly raising the corporate tax rate, yet his campaign has estimated that his efforts to remove “loop holes” will increase corporate tax revenue by 25 percent. Many like to portray business taxes as only affecting “greedy CEOs,” but corporate taxes are paid by all of us: we pay them in the form of higher prices for goods, fewer jobs, and lower wages.
Senator Obama also wants to raise taxes on investment, such as raising the capital gains tax rate and the tax on dividends. Again much of the press depicts these tax policies as affecting only investment bankers and multimillionaires. Yet discouraging investment and savings affects everyone. Such investment is the lifeblood of the economy, allowing businesses to expand and entrepreneurs to create new companies. The end result is new jobs for workers and a healthy economy.
Voters should take Senator Obama’s statement seriously. It isn’t just what he says about coal. His big government vision and plan for a more progressive, anti-investment tax regime threatens workers everywhere.