Cap and trade proposes a new national tax of historic proportions

The EPA's Economic Analysis of Boxer-Kerry By: Ben Lieberman

“Second verse same as the first, a little bit louder and a little bit worse.” This is the basic theme of the EPA’s analysis of the shrouded Boxer-Kerry Bill (S. 1733).

Given just 12 days to analyze the Boxer-Kerry climate bill (that others were not allowed to review), the EPA relied on previous analysis and the similarities between Boxer-Kerry and previous climate bills, most notably Waxman-Markey (H.R. 2454). Comparing S. 1733 to H.R. 2454 they conclude(page 28):

“While there are some minor differences in the bills in several areas that will likely result in slightly higher costs for S. 1733, these differences are overshadowed by the fundamental similarities in approach, caps, offsets, and other critical design parameters that affect the costs.”

Preliminary analysis by the Heritage’s Center for Data Analysis comes to the same basic conclusion: Though we disagree on the magnitudes, we agree that the Senate bill is very similar and a little worse than the House version.

The numbers most likely to be repeated from the EPA analysis are the same misleading numbers repeated from the analysis of Waxman-Markey. However, before reviewing the analysis, one point needs to be made crystal clear—there is no green stimulus here.

Even the most generous scenario in this EPA report shows that there will be costs forced on the economy—higher energy prices and lost income. For every year reported, household consumption drops compared to a world without Boxer-Kerry. This is a climate bill and, even according to the EPA, it will reduce economic activity. Spinning this as a job-creating, green stimulus bill is an act of fraud.

What will be the real costs? The Heritage analysis finds aggregate GDP losses (adjusted for inflation to 2009) grow to $9.6 trillion—an average loss of about $400 billion per year. Note that Heritage only projects impacts for the first 24 years of the 40-year program. The full 40-year cost will obviously be much higher.

The legislation pushes more than 1.8 million onto the unemployment rolls in 2012 and ultimately raises unemployment by over 2.7 million. This is net of any green jobs.

Energy costs rise. Even after adjusting for the purchase of more expensive energy-saving appliances, even after consumers drive less and adjust their thermostats, family energy expenditure rises by nearly $900 dollars per year—a total of more than $21,000 for the 24 years analyzed. Again, these figures have already been adjusted for inflation.

The EPA on the other hand reports results that amount to tens of billions of dollars per year. As with their analysis of Waxman-Markey, the EPA analyzed the economic impacts of several scenarios for Boxer-Kerry—from extremely unrealistic on one end to much more realist on the other. However, in the current report they present the economic cost of only one unrealistic scenario.

This particular scenario depends on three extreme assumptions. First, nuclear power generation must nearly double in the first 25 years. This is the equivalent of about 100 additional nuclear power plants. In the past 30 years, not one new nuclear power plant has been licensed and Boxer-Kerry (like Waxman-Markey) makes little to no provision for eliminating the legal and political barriers to the nuclear renaissance necessary for this EPA analysis.

Second, the EPA assumes that technology for capturing and storing the carbon dioxide emitted from coal-fired power plants will be fully commercialized in the next 15 years. Pilot projects are still on the drawing boards. Further, even after the extraordinary technological and economic hurdles have been cleared, the political and environmental obstacles to storing tens or hundreds of millions of gallons of liquid CO2 each day must be overcome.

Third, the EPA assumes nearly two billion tons of CO2 can be emitted beyond the caps set by the legislation because we will pay others to cut their CO2 emissions. Known as offsets, some of these cuts are to be made in the U.S., while many more are expected to be provided abroad. The results from current offset programs elsewhere are so unsatisfactory, that Boxer-Kerry devotes 90 pages to specifying the structure for establishing the stultifying regulations for offset certification, verification and trading. The theoretical availability as outlined in the earlier part of the bill is a long way from the actual availability of the offsets necessary for the EPA’s analysis. On page 20 of their report, the EPA makes clear that offsets are not a done deal:

“There are many institutional design issues, including the measurement, monitoring, reporting and verification requirements, surrounding estimates of offset availability. These issues must be addressed to ensure that the offset reductions are truly incremental, and represent real reductions.”

On the same page, the EPA acknowledges the great uncertainty of offsets and their projectedeconomic impacts:

“Additionally, the cost and availability of offsets, particularly international offsets, is one of the greatest uncertainties in forecasting the cost of climate legislation.”

Gambling trillions of dollars in family income and millions of jobs on any of these strained assumptions would be a great risk. Relying on all three seems unconscionable.

According to federal tax records, the AARP stands to reap millions in royalties should Obamacare become law.

AARP: Reform advocate and insurance salesman

Seniors group makes millions from royalties on health plans

George Sichel, left, and Harold Wright talk with Morie Smile of AARP's Colorado chapter. (Matt Mcclain)

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By Dan Eggen

Washington Post Staff Writer
Tuesday, October 27, 2009

The nation's preeminent seniors group, AARP, has put the weight of its 40 million members behind health-care reform, saying many of the proposals will lower costs and increase the quality of care for older Americans.

But not advertised in this lobbying campaign have been the group's substantial earnings from insurance royalties and the potential benefits that could come its way from many of the reform proposals.

The group and its subsidiaries collected more than $650 million in royalties and other fees last year from the sale of insurance policies, credit cards and other products that carry the AARP name, accounting for the majority of its $1.14 billion in revenue, according to federal tax records. It does not directly sell insurance policies but lends its name to plans in exchange for a tax-exempt cut of the premiums.

The organization, formerly known as the American Association of Retired Persons, also heavily markets the policies on its Web site, in mailings to its members and through ubiquitous advertising targeted at seniors.

GOP lawmakers point to AARP's thriving business in marketing branded Medigap policies, which provide supplemental coverage for standard Medicare plans available to the elderly. Democratic proposals to slash reimbursements for another program, called Medicare Advantage, are widely expected to drive up demand for private Medigap policies like the ones offered by AARP, according to health-care experts, legislative aides and documents.The group's dual role as an insurance reformer and a broker has come under increasing scrutiny in recent weeks from congressional Republicans, who accuse it of having a conflict of interest in taking sides in the fierce debate over health insurance. Three House Republicans sent a letter to AARP on Monday complaining that the group was putting its "political self-interests" ahead of seniors.

Republicans also question the high salaries and other perks given to some top AARP executives, who would not be subject to limits on insurance executives' pay included in the Senate Finance Committee's health reform package. Former AARP chief executive William Novelli received more than $1 million in compensation last year.

"We are witnessing a disturbing trend of handouts to special interests like AARP," said House Republican spokesman Matt Lloyd, referring to Democratic negotiations over health reform. "In return, AARP is lobbying for a government-run health-care bill that will pad their own executives' pockets at the expense of its own members and other vulnerable seniors."

AARP officials strongly dispute such allegations, arguing that the group's heavy reliance on brand royalties allows it to offer members a wide range of benefits -- from lobbying for seniors in Washington to discount travel packages and financial advice. The organization notes that even though it offers a Medicare Advantage plan, it has long advocated curbing waste in that federal program.

"We're a consumer advocacy organization; we're not an insurance firm," said David Certner, AARP's director of legislative policy. "That drives everything we do. It's got to be good for our members, or we don't endorse it."

Added AARP spokesman Jim Dau: "We spend far more time at odds with private insurers than not."

AARP's ties to the insurance business date to its founding by former educator Ethel Percy Andrus, who started a group to help retired schoolteachers find health insurance in the years before Medicare; the effort led to the creation of AARP in 1958.

Now, the group relies more than ever on payments from auto, health and life insurers, according to financial statements. From 2007 to 2008, AARP royalties from insurance plans, credit cards and other branded products shot up 31 percent -- from less than $500 million to $652 million -- making such fees the primary source of revenue for the group last year, the records show. AARP's annual financial report shows that 63 percent of that, or about $400 million, came from the nation's largest health insurance carrier, UnitedHealth Group, which underwrites four major AARP Medigap policies. Other carriers with AARP-branded plans include Aetna Life Insurance, Genworth Life Insurance and Delta Dental.

AARP is also a major powerhouse in Washington, spending more than $37 million on lobbying since January 2008. The organization's close ties with insurers have long attracted criticism from politicians of both parties.

During the health-care debate of the early 1990s, then-Sen. Alan Simpson (R-Wyo.) held hearings lambasting the group's business operations. Some Democrats criticized the group for supporting the Bush administration's expensive Medicare prescription-drug legislation in 2003.

Earlier this year, AARP and UnitedHealth said they were halting the sale of "limited benefit" health insurance policies after complaints from Sen. Charles E. Grassley (R-Iowa) that the plans were marketed in a misleading way.

Dean A. Zerbe, a former Grassley senior counsel who is now national managing director at the corporate tax firm Alliant Group, argues that AARP's involvement in the sale of insurance plans "really hurts their credibility."

"Either you're a voice for the elderly or you're an insurance company; choose one," Zerbe said. "They put themselves forward in the public arena as nonbiased observers, but they're very swayed by business interests."

Republicans renewed their attacks on AARP this year after the group emerged as a vigorous defender of many of the reforms under consideration by the Democrat-controlled Congress. Nancy LeaMond, an AARP executive vice president, appeared at a press conference Friday alongside House Speaker Nancy Pelosi (D-Calif.) to announce a new proposal for plugging gaps in coverage of Medicare prescription benefits.

Rep. Dave Reichert (R-Wash.), who has asked AARP to provide him with more details about its insurance-related businesses, said he believes the group is "misleading" its members about the alleged benefits of Democratic reforms. "Right now there's a feeling among seniors that AARP may not be entirely forthcoming," he said.

AARP launched a "fact check" section on its Web site this year to counter GOP criticisms of reform, including the discredited "death panels" claim, and argues that wringing savings out of Medicare and closing gaps in prescription coverage will help older Americans.

Several top AARP officials also said they have no idea whether the group might gain insurance business as a result of the proposed reforms. "We wouldn't know it, and we wouldn't really care," Certner said. "The advocacy is what drives what we do here, and not the other way around."

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Saturday Night D.P. Sustenance: Jesus Burgers :By Desmond White

It’s Saturday night, you’re starving on Del Playa, and a quesorrito at Freebirds just doesn’t seem worth the ten bucks. What do you do? Or maybe a better question is, “What Would Jesus Do?” The answer isn’t as blasphemous as it sounds. He’d probably head over to 6686 Del Playa, a location better known in Isla Vista as the

Jesus Burgers house.

Jesus Burgers is a Christian ministry that operates in Isla Vista, and which hosts barbecues in the front yard of 6686 on Saturday nights, starting around 10 PM. Here it’s BYOC, or Bring Your Own Cheese, with burgers provided for free by the church’s members. Anybody is welcome to swing by, grab a Jesus burger, and hang out. Sometimes guitars and hand drums are pulled out for an impromptu late-night jam. And if you want more substance, the ministry also provides a prayer and guidance in the ‘prayer shed,’ a Christian version of Sydney Fife’s Man Cave, which is located in the backyard.

I myself cruised by Jesus Burgers last Saturday night. While waiting in line for the grill, I stood between a gaggle of sorority chicks and a bunch of intoxicated Norwegian students who kept busting out into Britney Spears. Nearby, people were roasting their hands by the fire pit, and inside the house some peeps were playing cards. The line was long and slow, but the food looked good and the company was so remarkably chill that pretty soon I found myself relaxing and enjoying my surroundings. And when I finally received my burger, the smiles on the cooks’ faces really solidified the tranquil aura of the place for me.

I guess I should not have been surprised. Jesus Burgers has developed a great reputation for being honest about its ministry. “People step onto the property knowing that when friends get out of line,” says Jason Lomelino, the current pastor of Isla Vista Church, “that people shout ‘hey, this is Jesus Burgers!’”

It was not always this easy. The ministry began as a college bible study that met in Santa Barbara when everyone else was out partying. The Isla Vista party scene was much rowdier back then, with more couch burnings and fights. Their early outreach attempts consisted of prayer walks and street evangelizing, which some nights could be dangerous. Ultimately, they decided they needed a home base in Isla Vista, or as Lomelino puts it, “a light in the darkness.”

In 2002, Jesus Burgers’ first church services were held in the front yard of 6686, with plenty of bands and burgers to draw people in. “Our first year was really hard,” says Derika Brendsel, a Jesus Burgers veteran who runs a blog at www.derikabrendsel.blogspot.com, “People were skeptical. A few thought our burgers must be laced with poison. They were combative. But then they saw that people lived at 6686, skating, surfing, going to class. They started realizing we were just like anybody else.” Brendsel recalls one Halloween when a couple dressed up as hamburger saints and came as “Jesus Burgers.”

As the ministry’s reputation grew, so did its support. Since its founding, Shalhoob Meat Company, a local family owned business, has supplied its patties and only recently handed that role over to the Salvation Army because of the current economic recession. Jesus Burgers is very popular with the local Isla Vista community, evidenced by the regularity with which people show up. “If there’s any problem,” claims Kim Ramos, a third-year Aquatic Biology major, “it’s that I wish their line wasn’t so long so I could eat faster.”

“Jesus Burgers is great. They encourage people to get to know each other,” says Alyssa Williams, a third-year Theater major, “and they really try to get people to see the love of Christ in a good way.”

Personally, I agree. Jesus Burgers represents a Christianity I can relate with. Their gospel is not fire insurance, but peace, love, and hospitality. And every bite of their juicy Jesus burgers is a holy hand grenade of flavor and taste. This place is not just a burger joint or a ministry, but a gift, and we are lucky to have it.