The Costs and Benefits of Congress's Proposed Energy Policies

The costs and benefits of proposed energy policy should be spelled out for Americans.

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Workers install solar panels containing photovoltaic cells at the new Solarpark Eggersdorf solar park near Muencheberg, Germany.

Pete Sepp is executive vice president of the National Taxpayers Union.

What's the price of American energy policy? The answer to that question may not be clear-cut, but the nation's taxpayers must keep asking it of their elected officials. Fortunately, they need not depend solely on politicians' words for some solid clues about whether various energy proposals in Congress would improve the government's balance sheet or make it worse. Recently I asked my colleagues at National Taxpayers Union Foundation, the research and educational arm of National Taxpayers Union, to provide some perspective, courtesy of the foundation's BillTally system.

Initiated in 1991, BillTally is the most comprehensive cost accounting database available on Congress's bill-writing activities. The system examines each piece of significant federal spending legislation introduced—not just voted onin the House and Senate, and assesses its budgetary impact. In 2011 alone, BillTally catalogued  1,163 bills whose enactment would result in net costs or savings of at least $1 million versus the current budget baseline.

BillTally is a complex undertaking that requires an exacting methodology to calculate legislative cost estimates from numerous sources, including the Congressional Budget Office and the White House's Office of Management and Budget. But the result is a treasure trove of information that gives unique insight into the raw material of legislating, before the parliamentary maneuvering that surrounds floor votes comes into play. BillTally can even cross-index sponsorship records in Congress to determine how much each member's agenda would affect federal outlays if it all became law at once.

[See a collection of political cartoons on energy policy.]

And when it comes to energy, the panoply of bills is as diverse as Congress itself. As of last month, BillTally had for the current Congress identified cost or saving impacts for 66 separate pieces of legislation in the energy policy sphere alone. Among those that would raise federal spending the most was H.R. 4026, the "Energy Assistance for American Families Act." The bill, sponsored by Democratic Rep. Edward Markey of Massachusetts, would primarily reauthorize and expand the current Low-Income Home Energy Assistance Program, for a net annual expenditure increase of $4.25 billion (again, over and above "current policy" baseline spending).

But beyond putting more money into benefit programs, other bills aim to put more federal backing into energy research and development. H.R. 301, the New Manhattan Project for Energy Independence Act from Republican Rep. Randy Forbes of Virginia, creates among other things, a Department of Energy-administered competitive prize program for projects that demonstrate commercially viable success in large-scale solar energy production, nuclear fusion technology, and advanced biofuels. The net cost: $2.4 billion a year.

All told, 56 out of the 66 energy bills the National Taxpayers Union Foundation identified would drive up federal outlays, 22 of them by at least $100 million annually. Among this larger-ticket legislation were proposals calling for more subsidization of wind, solar, and biofuel energy as well as advanced alternative vehicles.

[See a collection of political cartoons on the budget and deficit.]

These and other spending hikes notwithstanding, BillTally did pinpoint 10 pieces of legislation that would actually reduce the pressure on the federal budget. Partially in response to reports of mismanagement and poor oversight of the Department of Energy's Weatherization Assistance Program, Republican Rep. Chuck Fleischmann of Tennessee authored the Stop Green Initiative Abuse Act (H.R. 3441) to end the venture and save taxpayers $210 million. Republican Rep. Tom McClintock of California has offered the American Taxpayer and Western Area Power Administration Customer Protection Act (H.R. 2915) to repeal risky taxpayer-backed loan authority for renewable and other energy projects granted by the 2009 stimulus bill to an entity originally created during the New Deal. Total average yearly savings: $423 million.

Although BillTally tends to confine its research to the spending rather than the tax side of the ledger, several proposals in Congress do have a revenue-type impact that the foundation can measure. Unlike the often volatile "scorekeeping" surrounding schemes to boost income tax rates, federal budget agencies classify the government's royalty proceeds from development of oil and gas reserves as offsetting receipts (negative outlays). And, in areas of the United States where such reserves are stable and proven, the receipts can be projected with some certainty.

[See a collection of political cartoons on Congress.]

The single biggest energy-related deficit-reducing proposal BillTally has scored so far in this Congress is the "Alaskan Energy for American Jobs Act" (H.R. 3407 from Republican Rep. Doc Hastings of Washington). The bill, which would allow for careful, responsible exploration and extraction of energy in the coastal plains of Alaska, would deliver an average of $300 million in deficit reduction each year over five years, according to the Congressional Budget Office. The annual figure would rise in later years. None of the proposals outlined above have been signed into law yet, but they become the grist of many future initiatives.

Bills associated with domestic energy production and transmission are especially instructive for both economic and fiscal policy. As this column has long documented the job creation potential from projects such as the Keystone XL Pipeline and Alaska oil exploration is considerable. Policymakers should understand that even as families benefit from these increased employment prospects, governments reap windfalls too because of increased income, payroll, and profit taxes from this increased private sector economic activity (amounting to tens of billions of dollars not reflected in the estimates above). Legislation that is public-sector driven, on the other handinvolving more grants, loan guarantees, and subsidiesoften tends to deepen the already cavernous federal budget deficit.

[Take the U.S. News Poll: Should Obama Make His Keystone XL Decision After the Election?]

BillTally's analysts continue to add new legislation and cost estimates to the system's database on a regular basis, including proposals affecting energy. They've also been keeping a watchful eye on congressional and presidential candidates' platforms, whose planks can often be matched up with equivalent information in BillTally. This week, for example, the National Taxpayer Union Foundation found that for all the differences they stress on the campaign trail, the two frontrunners in Virginia's U.S. Senate race (Tim Kaine and George Allen) share one bipartisan trait: support for responsible petroleum development off the Virginia coast.

Regardless of their party, politicians claim they have the numbers to back up their promises about delivering affordable, abundant energy. But the citizens who ultimately pay for those promises deserve some numbers of their own, in order to weigh the costs as well as the benefits of energy policy.

  • Read Gregg Laskoski: U.S. Needs a Concrete Energy Policy to Remain Competitive Globally
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