Podcast: Protecting Low-Income Consumers in Climate Change Legislation

November 3, 2009

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In this podcast we’ll discuss nuances in climate change legislation. I’m Janet Hodur, and today we’re joined by the Center’s chief economist, Chad Stone.

1. Chad, the Senate Environment and Public Works Committee, intends to mark up a climate bill this week. Many comparisons are being made between this Senate bill and the House-passed bill. Can you explain how the House bill will help low-income households?

The House bill, passed in June, takes 15 percent of the money electricity generators and other companies have to pay for the right to keep releasing greenhouse gases into the atmosphere, and it uses that money to give low-income consumers energy refunds. Our analysis indicates that these refunds, in addition to the assistance households would get on their utility bills through other provisions, would ensure that the typical low-income family would not be harmed financially by policies that fight global warming.

2. What about Senate bill? Does it offer the same protection to low-income families?

Like the House bill, the Senate bill makes protecting vulnerable households a priority, for which we commend them. However, as it is currently written, the Senate bill provides about one-sixth less funding for low-income protection than the House bill does. This reduction reflects the decision by the drafters of the Senate bill to make across-the-board cuts in most programs in order to ensure that the climate bill would not add to the budget deficit. Concern for the budget deficit is valid, but an across-the-board cut is not the only way that concern could have been addressed.

3. What does this reduction in funding mean for the low-income program?

Quite simply, with less money than is in the House bill, our ability to give low-income Americans the protection they need would be compromised, either through restrictions in their eligibility to receive benefits or through reductions in the size of the benefit they receive. It would make it impossible to provide direct relief farther up the income scale to help moderate-income households.

4. Does this reduction only affect the direct consumer relief?

No. The across-the-board cuts affect virtually everything in the bill, including the relief all consumers would receive through their utility bills. So, low-income households would end up with larger utility bills, but smaller energy refunds.

5. As the Senate moves forward with this legislation, is there any chance the full protection of low-income households will be restored?

We are only at the beginning of the process with the bill and Senator Boxer’s Environment and Public Works Committee. As currently written, that bill provides less protection for low-income households than what is in the House bill. But the Finance Committee will have to write the actual program for delivering low-income relief and other committees will have their say on other parts of the bill. At the end of the day, Senate Majority leader Reid will have to put together a final bill for consideration by the full Senate. As this process unfolds, we hope the Senate will recognize the need for increased funding to meet its goal of protecting low-income households.

Thank you for joining me, Chad.

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