Deficit dodge

13 May 2010 By Christopher Swann

By seeking to craft a painfree energy bill, lawmakers in the Senate telegraphed that any efforts to raise revenue are taboo. It’s another worrisome sign that only the bond market’s vigilantes will ever get Congress to act on the budget gap.

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Senators John Kerry and Joe Lieberman unveiled a climate change bill on May 12, targeting climate change reductions of 17 percent by 2020.

The bill would levy a tax against the largest emitters, at a starting rate of $12 a ton of carbon dioxide with a ceiling of $25.

Industrial sources would be exempt from the plan until 2016. They would also be compensated for part of the cost of compliance.

A Universal Trust Fund would be established. Beginning in 2026 part of the revenues from the auctioning of permits would be deposited in the fund, with 25 percent going to deficit reduction.

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