Candidate Watch
Mitt pumps gas
Palm Beach, FL., Jan. 28, 2008.
The McCain energy bill "adds a thousand dollars a year to the cost of fuel and energy for the average Florida household. If you want that kind of liberal democrat course as a senator, then you can vote for him."
--Mitt Romney, West Palm Beach, FL., Jan. 28, 2008.
During the closing hours of the Florida primary, Mitt Romney pounded John McCain for legislation he has championed in the Senate, including the 2003 McCain-Lieberman energy bill, which was designed to cut back on carbon dioxide emissions in line with the Kyoto treaty. He claimed that the bill would cost the average Florida household of four around $1000 a year in increased energy costs.
Romney's $1000 estimate is not supported by the most authoritative government cost-benefit analysis of the original 2003 Climate Stewardship Act promoted by McCain, or subsequent energy bills that are still held up in Congress. And the GOP candidate conveniently omits to mention that the extra costs will be phased in over several decades.
The Facts
The Romney campaign provided some crude back-of-the-envelope calculations to support the $1,000 figure, based on current consumption patterns. They assume that the cap on carbon dioxide emissions proposed by Senators McCain and Lieberman back in 2003 would lead to a 50 cent per gallon increase in the cost of gasoline. In the case of Florida, that works out at $4.35 billion in increased annual gas costs, of $244 per person. According to these calculations, a family of four would have to pay just under $1000 for gas per year.
Romney's math may be more or less correct, but energy economists say that his logic is flawed. The McCain-Lieberman bill is one of several measures that propose a cap-and-trade system. According to a study by the Energy Information Administration, which is part of the Department of Energy, the original 2003 bill could lead a 40 cent per gallon increase in the price of gasoline by 2025. But the consumer would be protected from the full brunt of the increase by the introduction of fuel efficient technologies, and various rebates and consumer credits.
The Energy Information Administration estimated the average household's energy bill would rise under the original McCain-Lieberman bill by around $444 per year by 2025. See this study, page two. Under more recent versions of the legislation, the rise in energy costs would be lower, thanks to a more relaxed system of offsets. Under the cap-and-trade system, countries that produce high-levels of carbon emissions will be able to buy credits from countries that pollute less, reducing the burden on high polluters like the United States. An economic analysis of different bills is available here.
Dallas Burtraw, an economist with Resources for the Future, a Washington D.C. think tank that tracks various cap-and-trade proposals, said it is misleading to think of higher energy prices as a tax. Much of the revenue raised by the government from higher gas prices will be recycled back into the economy, directly benefiting consumers in the form of tax cuts or credits for energy-efficient technologies.
The Pinocchio Test
In order to reach his $1000 figure, Romney has assumed a static economy, in which everybody consumes the same amount of gas and fuel as they do today. He ignores the structural changes to the economy that are likely to take result from the promotion of fuel-efficient technologies at the expense of inefficient technologies. The Romney figure is at odds with analysis by top U.S. government economists.
Posted on January 30, 2008 at 6:00 AM ET
| Category:
2 Pinocchios, Candidate Watch, Economy, Environment, John McCain, Mitt Romney
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Posted by: anjel01 | January 30, 2008 9:34 AM
Relying upon hypothetical (i.e., magical) fuel-efficient technologies that may never be invented counts as fact-checking? In other words, Romney's point is inaccurate because it is insufficiently wishful? Silly stuff....
Posted by: Tom T. | January 30, 2008 9:50 AM
Also, it doesn't help the fact-checking credibility to parrot breathtakingly stupid spin from "experts" uncritically. A good example is the guy who says "it is misleading to think of higher energy prices as a tax" because "much of the revenue ... will be recycled back into the economy."
ALL tax revenue gets recycled back into the economy. Does the fact-checker really think the money we pay in income tax and sales tax every year instead gets buried in a crater in Nevada?
It may be a worthwhile tax, or it may be a tax whose distortions outweigh its benefits. But to suggest that it's NOT a tax is just nonsense, and the fact-checker should award himself a Pinocchio or two.
Posted by: Tom T. | January 30, 2008 10:02 AM
A tax increase on gasoline would have a definite benefit: it would and should reduce consumption. Isn't that the object it seeks to achieve in the first place? It definitely would serve as an incentive to conserve for me!
Posted by: Emily | January 30, 2008 11:03 AM
Romney's point is just stupid. $244 per person is an AVERAGE!
If it costs one person $30 in gas to drive from Chicago to Des Moines, does that mean if he takes his wife and two kids (4 people) that it will cost $120? Of course not! Maybe it costs an extra 5 bucks because you have more weight in the car. Sorry Romney, your logic is flawed.
Whoever told Romney this tactic was a good idea should be fired. It doesnt make him look more conservative than McCain, just worse at math problems.
Posted by: chris | January 30, 2008 11:15 AM
@chris - you've missed something. The 4.35 was split among PEOPLE in Fla, not Households. If you live alone, you pay 244 more. If you live with a wife & 6 kids, it will be ~2000. Different math problem altogether than your example of a shared ride. You have confused per person with per family.
Posted by: Dave | January 30, 2008 11:59 AM
To clarify, I wouldn't want anyone to think I suport Romney, it's just that IF the 244/person is accurate, so is the rest of his point. I support Ron Paul, who would remove all the taxes he could, and let the free market determine the price.
Posted by: Dave | January 30, 2008 12:03 PM
Posted by: Dave: "I support Ron Paul, who would remove all the taxes he could, and let the free market determine the price."
Good luck with life, then. Fuel prices right now are determined by speculators, who are also part of the free market. Slavery is part of the "free market," too. Anything-goes is chaotic and destructive. Without thoughtful regulation, the Constitutional phrase "promote the general welfare" means nothing.
Posted by: ed | January 30, 2008 3:20 PM
That was just stupid by Romney. A typical family of four does not have four drivers. The EIA says the average family would pay $444 more but in newer versions the cost would be lower.
Slick Mitt.
Posted by: gary_ | January 30, 2008 5:23 PM
What's new? The Mittster lies like most folks breathe, automatically.
Posted by: Anonymous | January 30, 2008 5:45 PM
@ Dave
You've missed damn near everything. Romney takes the $244 PER PERSON average that he's using then rounds it up to $250. Are you still with me? Then he multiplies it by 4 persons in a family to get to the $1000 cost per family for gasoline figure. Did I lose you?
Now for the kicker: A family of four doesn't have 4 drivers, Dave! Whoah! Holy Crap!
Romney's logic is almost as flawed as yours, but Mitt is smart enough to know he's lying.
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