You may have listened to the state of the union speech by President Barack Obama with its commentary and also read the details behind the $3.8 trillion Federal budget proposal. If you have, you are likely way ahead of me. You may also be a little confused as to where the specifics were on energy proposals, given the speech and the budget as guidance. Take this time to reflect on what clean air, carbon gas emissions, and green energy incentives mean to you and your wallet in two completely separate proposals. With a little reflection you might be able to save, and save a lot.
So, how does your wallet fit with the Cap-and-Trade and Home Star proposals. Cap-and-Trade may affect you negatively to help reduce our carbon footprint, but you can curb those “taxes” and higher utility rates with rebates under the Home Star program. The Home Star program promotes home energy efficiencies with tax incentives.
If you were one of those to read the budget proposal you may not be familiar with these two programs. After all, the budget was only 192 pages and you were distracted. The $3.8 trillion is what the government expects to spend. When all the taxes are collected the government is expected to be in the red $1.6 trillion in fiscal year 2010.
Another $650 billion over 10 years is an administration estimate of the amount of taxes a Cap-and-Trade program may bring in. It made it into the budget with language that describes a comprehensive market-based climate change policy. This policy would curb greenhouse gases in the range of 17% below 2005 levels, and accomplish this by 2020. It pushes for more than 80% reductions by mid-century.
Cap-and-Trade has yet to be adequately defined so you get language like a “comprehensive market-based climate change policy.” Administration proposals in the past have called for a Cap-and-Trade system that sets up an auction of carbon emission credits. These credits can be traded. Lobbyists from the coal-fired power distribution industries with high gas emissions cried “foul” at first. The government took their ball and went home when counter- proposals drew the ire of other industries. If implemented, higher taxes in the form of industry auctions has a trickle-down effect on your wallet.
As a consumer the Home Star program is designed to help you. A Home Star coalition of heavy hitters has been formed to put together a bill that will be supported in Congress. The construction industry has been hit lately with 17% unemployment rates. This program has the potential of returning those workers to full employment while providing energy saving incentives to the consumer of up to $4,000. To receive these credits your home may be rated for energy consumption by Building Performance Institute accredited contractors.
Neither program has made it into the law books yet. Your bank account may get a “push” in betting terms if they do make it that far. Keep in mind they are two separate concepts heading in opposite directions as far as taxes are concerned. They may be linked together in one direction only in promoting a better environment. The government may be looking at the “push” on the opposite side, using taxes from the Cap-and-Trade bill to fund a home energy saving incentive program like Home Star.
Obama craftfully left it out of his speech, instead he talked about clean energy with solar and nuclear power, and dodged the political struggle with Cap-and-Trade by carving it out of the budget proposal. But, as we all know from our civic classes, the President doesn’t make the laws. The budget is before Congress to negotiate what stays and what pork gets rolled in, and then you may see these programs emerge as part of the discussion. Since these programs may offset each other, the President wins in that one direction of promoting a better environment with a budget neutral pair of programs.
Either way, promoting a clean energy environment while reducing energy consumption is something that will continue to be looked at. You can prepare yourself now by taking advantage of the tax credits up to $1,500 by installing approved products such as attic insulation, windows, and doors. You can read more about the basics of these credits on this website, under energy tax credits. That is one program that is available now.
Tags: cap-and-trade, carbon emission, Cash for Caulkers, clean energy, Federal, Federal budget, government, greenhouse gases, Home Star, President Barack Obama