CBO projects 'modest' hit for households in 2012 if House climate bill becomes law

U.S. households would lose about $90 the first year under the House's cap-and-trade bill if it became law, the Congressional Budget Office (CBO) said Tuesday.

The nonpartisan budget office said households would experience a "modest" loss in purchasing power under the House-passed bill, according to estimates requested by a House Republican lawmaker.

CBO Director Douglas Elmendorf said that the effect on purchasing power, the cost of complying with the new environmental laws minus the benefits of its enactment, would be small starting in 2012, but increase as the restrictions have more of an impact over the next decades.

"The loss would be modest as a share of gross domestic product (GDP) in all years between 2012 and 2050, but it would rise over that period as the cap became more stringent and more resources were dedicated to cutting emissions," Elmendorf wrote in a letter responding to a query from Rep. Chris Smith (R-N.J.).

In 2010 dollars, Elmendorf explained, that would mean households would lose $90 in 2012, $550 in 2030, and $930 in purchasing power by 2050.

The budget office had previously provided estimates of the average effect on households' purchasing power over certain spans of time, but this estimate parses out the average effect on a yearly basis. The estimate gives Republicans an actual number to hang on the bill going into this fall's midterm elections and 2012's presidential and congressional races.

Still, it is seen unlikely by many observers that the Senate would take up the legislation to have passed the House, with many centrists and virtually all Republicans having expressed opposition to the House bill's proposal.

Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) are expected lay out their compromise energy legislation later this month.

Update, 4:12 p.m.: A spokesman for Rep. Ed Markey (D-Mass.), an author of the House climate change bill, notes that the CBO estimate doesn't include a number of aspects of the legislation that could bring down costs in the long run, like cost saving and energy efficiency provisions. The CBO report, Markey's office said, confirms what they have long claimed, which is that the bill is wholly affordable and, they say, would cost no more than the price of a postage stamp per day.