NCPA - National Center for Policy Analysis


June 4, 2009

Rising gasoline prices are back. Millions of Americans at the end of May faced prices for regular gas averaging $2.35 per gallon, a full 30 cents higher than the beginning of the month and nearly 60 cents more than at the start of the year. But don't expect any help from Congress. In fact, Washington is working on a bill that would raise costs further, says Ben Lieberman is a senior policy analyst at the Heritage Foundation.

The proposed American Clean Energy and Security Act of 2009 (the Waxman-Markey proposal) essentially would limit how much gasoline and other fossil fuels Americans can use.  The aim is to cut emissions of carbon dioxide from energy use; yet, prices would have to rise high enough so the public would be forced to drive less and meet the ever-tightening energy rationing targets.

How high?  A Heritage Foundation analysis estimates that gasoline costs will rise $118 annually for a typical four-person household once the bill's provisions take effect in 2012:

  • That's about 10 cents more per gallon, and the impact goes up as the bill demands tougher energy use restrictions each year, tacking on an additional $1.23 to the inflation-adjusted price per gallon by 2035.
  • Electricity is also hit hard; in fact, the main target of the bill is coal, which affordably provides 50 percent of America's electricity.
  • The costs would filter down to consumers and boost electric bills by $235 in 2012, rising to $468 by 2035; that's a 90 percent increase over current rates.
  • The bill also would cost jobs, especially in the manufacturing sector.

Overall, this is a regressive tax that would harm the working poor the most.  At the same time, it would leave a million or more people without a paycheck to deal with the higher costs, says Lieberman.

Source: Ben Lieberman, "A shock at the pump?" Heritage Foundation, June 1, 2009.

For text:


Browse more articles on Environment Issues