[Congressional Record (Bound Edition), Volume 155 (2009), Part 10]
[House]
[Pages 12802-12809]
[From the U.S. Government Publishing Office, www.gpo.gov]




   THE IMPACT OF CAP-AND-TRADE ON MANUFACTURERS USING COAL-GENERATED 
                                 ENERGY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Ohio (Mr. Latta) is recognized for 
60 minutes as the designee of the minority leader.
  Mr. LATTA. Thank you, Mr. Speaker. I appreciate the opportunity to 
have this hour with my colleagues to talk about a very, very important 
issue facing this country.
  The issue that's facing this Congress is cap-and-tax. Why is it 
important? Well, as you can see from this chart right here, Cap-and-Tax 
Vulnerability by State. I'm from Ohio. I represent the largest 
manufacturing district in

[[Page 12803]]

the State of Ohio as well as representing the largest agricultural 
district in the State of Ohio.
  If you see from this map where it says, the vulnerability key from 
high, medium and low, you will see that Ohio, along with a good part of 
the Midwest, is all facing a very, very tough time under this proposal.
  At the same time I know when I am back home, I talk to the folks; and 
they say, Well, who's proposing this? I say, If you look from 
California to Washington. You go from Washington, D.C., up the coast to 
Maine, that's where it is. You look at that--very low vulnerability. 
That concerns me. It concerns me because, as I said, manufacturing is 
the lifeblood in my district. I would like to talk about it for just a 
few minutes.
  First, every week I go out in my district. I go out in that district, 
and I go into plants. We manufacture everything from car parts, to 
batteries, to windshields, to washing machines. You name it, we make 
it.
  My district, when people say, What's your largest city? It's my 
hometown of about 30,000 people. So over 140 miles east to west we have 
a lot of small manufacturers out there. We have large manufacturers. We 
have a large General Motors power train plant. When you keep going 
across, you have a Chrysler plant. We have a furniture manufacturing 
plant. As I mentioned, we have a washing machine plant.
  We go across it, and then we have a lot of smaller ones. We have 
plants that might employ 50, 100 people. But those are the folks that 
make this economy run because small business is the main economic 
engine for this country.
  So when I see things like this where you look at the vulnerability, I 
see that right off the bat, we're in trouble. But we're also in trouble 
because Ohio, being a large manufacturing State in total, we have 
another situation out there. And that situation is this: When you look 
at the plants that we've had, we've had to grow, as our former Governor 
and now Senator George Voinovich used to always tell us when we were in 
the legislature together, that we had to work harder and smarter in the 
State of Ohio.
  Well, a lot of factories are that way now. They don't employ as many 
people. But at the same time, we have watched a lot of these plants, 
because of the economic downturn, having to lay people off. Every week 
I go out into these plants. I remember one not too long ago I went into 
the plant, and they said, We'd like to take you in the back. They 
usually had around 180 employees. They said, We're down to about 70. 
They said, We make brass fittings; and with those brass fittings, 
they're in competition against the world. And of course that means the 
Chinese right now. They said, It costs us X number of dollars to make 
this product, and at the same time the Chinese can make it for 45 
cents.
  They can't have any more impact on them, especially if we're going to 
raise the price of energy. We can't have a national energy tax because 
if we do that, these companies are going to shut down, and they're 
never going to open up again.
  Back in 1982 we were coming out of that recession that started back 
in the Carter years when--you might all remember--we had 21.5 percent 
interest rates, double-digit inflation, double-digit unemployment 
rates. It was tough; but people still thought, When this thing's over, 
those factories are going to open up. I'm going to have my job back. 
Not so today. Not so today because when people start looking around--
and we're in a global economy.
  I was a county commissioner of Wood County for 6 years. We used to 
compete against some parts of Ohio and over in Indiana and Michigan, 
but now we're competing against people on the other side of the globe, 
and they're going to eat our lunch if we're not careful.
  When we have these situations, like I said, that you go into these 
plants, and these folks are saying, We can't have one more increase or 
we're out of business, they mean it.
  Then the question is going to be when they come to me and say, Well, 
where am I going to get a job? Or like last weekend I spoke to a 
commencement address. I asked them beforehand, I said, Just out of 
curiosity, what would you like me to talk about? They said, What we'd 
really like you to talk about is telling our graduates what you're 
working on, what you're helping to try to do to make sure that--where 
we are going be when we come out of this tough economic situation that 
we're in. So you have to start these things off by saying, You know, 
I'm not going to paint you any kind of a rose-colored picture here.
  If we work hard and we do the right things here in Congress, we're 
going to survive. But if we pass the wrong pieces of legislation, I 
can't go back to that same college in a couple of years and look at 
those next graduates coming up and say, You know what, you're going to 
have a job, because they might not. So what we have to do is think 
about these things.
  Just to show you on another chart something that the Heritage 
Foundation put together, they took all 435 congressional districts. 
What they did was, they put together a manufacturing vulnerability 
index. They took what your State's percentage of energy usage from coal 
was, and then they took from each district the number of manufacturing 
jobs.
  This is one of the times you don't want to be at the top of the list. 
My good friend from Indiana, who will be on in a couple minutes here, 
unfortunately ranks number one in vulnerability in this country because 
of the number of manufacturing jobs and coal generation in the State of 
Indiana. I'm number three because I have 80,623 manufacturing jobs, and 
we get 87.2 percent of our energy from coal. You put those two things 
together, and my manufacturing vulnerability index percentile rank is 
at 99.5 percent, which puts you at three.
  When I go across my district, I can't go out there and say, Things 
are just fantastic. I'm telling them, Right now I want to try to keep 
you in business, but I will tell you, if we start passing these bills 
in this Congress to put a national energy tax on you, you're in 
trouble. And not only are you in trouble, but every generation coming 
up in Ohio is in trouble because these jobs aren't going to come back. 
These jobs are not going to come back.
  When you look, as I said, from 1982 when people thought, Well, we are 
going to come back. Why? Because the United States was at the top of 
the heap. Today the Chinese have become, in 2009, the number one 
manufacturing country in the world. We got knocked off after over 100 
years being on top. Not anymore. That's why we have to start thinking 
about our future. When you talk about what the folks want to do here, 
they need to look around the world a little bit.
  Not too long ago in the Washington Times there was an interesting 
article. The headline was Chinese Official Aims Emissions Cost At 
Consumers. The folks here in Congress are saying, Well, it's not fair 
if we do all these things. We need to have the rest of the world 
cooperate with us. Well, guess what. Let me just read you one quote. 
This is from their lead climate negotiator in China who said this:
  ``As one of the developing countries, we are at the low end of the 
production line for the global economy. We produce products, and these 
products are consumed by other countries. This share of emissions 
should be taken by the consumer, not the producer.''
  Interesting philosophy. They can produce it, but they're not going to 
pay anything for it. They want us, for consuming it, to pay that cost. 
But at the same time in this country what we're going to be doing is 
we're going to be paying on both ends because we're going to be paying 
to produce it. It's going to be very difficult for these manufacturing 
jobs in States like Ohio and Indiana to stay in one spot.
  The one thing would be that they might say, We're going to leave and 
go to another State. But I've already had companies that are 
multinational say, You know what, we don't even have to be in Ohio. We 
don't have to be in the United States. We'll just produce it in another 
country. That's where we are. And I'll tell you what, the future is 
very bleak if we start looking at these things.

[[Page 12804]]

  Last summer we talked about an all-of-the-above energy plan for this 
country, and the American people got it. Because first of all, the 
American people went to the gas station, and they saw, like in Bowling 
Green, Ohio, $4.19 for a gallon of gasoline. People understood right 
off the bat what was happening. But sometimes when they hear about cap-
and-tax, cap-and-trade they say, Well, we're not really sure what that 
is. But it will affect everybody immediately when this thing starts.
  Let me give you a couple of statistics here from a Heritage 
Foundation report. This is about the negative impacts on consumers. 
This is from the Heritage Foundation. By 2035 this legislation would, 
one, reduce the aggregate gross domestic product by $9.6 trillion, 
destroy 1.1 million jobs per year on average with the peak year seeing 
unemployment rise by over 2.5 million jobs, increase the average family 
cost of four by $4,800 a year, raise electricity rates by 90 percent, 
raise residential natural gas prices by 55 percent, and increase 
inflation-adjusted Federal debt by 26 percent or an additional $29,150 
per person after adjusting for inflation. That's what this cap-and-tax, 
this national energy tax is going to get us. This is a massive tax. We 
can't afford it.
  Going back to this chart, when you look at the States that are using 
a lot of coal and you have a lot of manufacturing in your district, 
well, we can't take it.
  Now, let's go to the bottom of the chart. For those that are in favor 
of it, you look at their percentile rank. Zero. Well, that's out in 
California. Very little manufacturing. When you look at the number of 
manufacturing jobs in the bottom four of California, you've got 15,500 
and 19,000 manufacturing jobs in a congressional district. Again, 
compare that with Indiana 3, which has almost 104,000 manufacturing 
jobs, you wonder why we're concerned about this in the Midwest. You 
wonder why we're concerned about this when we talk about making sure 
that our people have jobs in the future.
  Let's think about the tax bases out there. We've got areas in the 
State of Ohio that are going to be devastated when you take these kinds 
of numbers, and we're not going to have these jobs anymore. What's 
going to happen to the local school districts? What's going to happen 
to the municipalities? What's going to happen to the fire departments? 
Everything? They're all going to be affected. So again, we can't afford 
this, and it's a tax on the American people. It is a loss of jobs that 
we can't afford in this country.
  At this time I would like to recognize some of the other Members 
today that are here. My good friend, the gentlelady from Oklahoma, who 
I would like to recognize at this time.
  Ms. FALLIN. Mr. Speaker, I want to thank Congressman Latta for 
leading this special hour tonight on a very important topic to our 
Nation.
  When I go back to my home State of Oklahoma almost every weekend, I 
hear a couple of things from my constituents back home. First of all, 
they are very concerned about our economy. They want to know that they 
will be able to keep their jobs, be able to have a salary, make their 
house payment, pay their bills, take care of their families; and they 
want to know their taxes are going to be kept low. They want us here in 
Washington, D.C., to be a part of the solution, not a part of the 
problem.
  The second thing I hear back home in Oklahoma is that people talk a 
lot about expenses and about the cost of living going up and how 
concerned they are with all the spending that is going on here in 
Washington, D.C., about the costs to their families and the costs to 
their businesses.
  Many of them say to me, Please don't let our gas prices go up like 
they did last summer to $4 a gallon. We can't afford that anymore for 
either our families or even our businesses. They say, Please don't let 
my utility costs go up. We're hearing with cap-and-trade, cap-and-tax, 
that our utility costs could go up by 30 percent and I'm on a fixed 
number or I'm a lower income person, and I can't take a 30 percent 
increase in my utility costs.

                              {time}  1545

  They say things like, please don't let my businesses have more 
operating costs. Or please don't raise my gasoline prices because I 
won't be able to take my kids to school as freely as I had been able 
to.
  And so as we begin and have this debate about cap-and-trade, 
controlling carbon emissions and about what we call the ``cap-and-
tax,'' I feel that the Democrat national energy tax would harm all 
these things that people are concerned about. Experts estimate that 
cap-and-trade, cap-and-tax, as I said, would raise utilities costs and 
would raise costs on families to an estimated cost increase of around 
$3,100 per family. A recent report by the U.S. Chamber of Commerce and 
the National Association of Manufacturers says the new energy tax would 
also cost the United States 3.2 million jobs at a time when we already 
have a high unemployment rate throughout our Nation. And this means 
that the future of manufacturing, the future of jobs in our Nation, 
would be at stake, and especially at a time when we cannot afford, as a 
Nation, to make the wrong policy decision that could further hurt our 
national economy.
  A strong manufacturing base is very vital to our economy and our 
security as a Nation depends on our having a strong manufacturing base 
and a strong economy. Many of us believe that we have are losing ground 
to other foreign countries when it comes to competing for products, 
production and also for market share.
  I saw a recent report by the Industrial Energy Consumers of America, 
and they said that from 2000 to 2008, imports were up 29 percent, and 
manufacturing employment fell 22 percent, a loss of 3.8 million high-
paying jobs. And they said of great concern is that manufacturing 
investment in the United States, as a percent of gross domestic 
product, has been on the decline since the late 1990s.
  Two-thirds of our world's pollution comes from other countries who 
won't be under a cap-and-trade type piece of legislation, two-thirds of 
the pollution in our world. But yet here in the United States we are 
talking about a plan that would affect our business sector because of 
the climate control legislation. Now we all want to do all that we can 
to keep our air clean, our land clean and our water clean. That is a 
very important goal for all of us. But not at the cost of risking our 
national security or even our national economy.
  We know that the Democrat solution is an energy tax. And we know it 
won't work. The United States might cap and tax its carbon emissions, 
but countries like China and India would never agree to restrictions 
that are so economically destructive. And the result would be, for the 
United States, more outsourcing of good jobs to other countries at the 
worst possible time when, as I said, unemployment is at 9 percent.
  Cap-and-trade is nothing more than a national energy tax. And its 
effects would be far reaching to businesses, consumers and even more so 
to rural America. Rural areas will be hit hardest by energy taxes. 
Americans in rural areas must travel further for routine errands, in 
fact, about 25 percent more miles than urban households, according to a 
recent Federal highway data study.
  Higher gasoline prices may not be the end of the world if you are 
taking a subway in a major metropolitan city like here in Washington, 
D.C., but higher gasoline prices are a big deal in small towns like I 
grew up in, like Tecumseh, Oklahoma, especially when you have to 
commute long distances to work. The numbers back that up. Rural 
households spend 58 percent more of fuel than urban residents as a 
percentage of their income.
  And then you look at another important industry in rural America, and 
that is agriculture. And agriculture is a bull's eye industry for 
energy tax because it is energy intensive. Whether it is the fuel for a 
tractor or fertilizer for the crops or delivery of food to a local 
grocery store, agriculture uses a great deal of energy production. 
Small businesses and American jobs are also a target of the cap-and-
trade, cap-and-tax system. A recent report from the

[[Page 12805]]

U.S. Chamber of Commerce and the National Association of Manufacturers 
and other business groups states that President Obama's budget proposal 
to reduce greenhouse gas emissions would result in a net loss of jobs 
in our economy of 3.2 million and would shrink our household purchasing 
power by $2,100. And while protecting our environment is a worthwhile 
effort, and we are all for that, I cannot support legislation that does 
nothing but levy taxes on small business, on rural America, on families 
and on those who are on limited resources and raises just higher energy 
taxes.
  If you want a real solution to climate change, then we should focus 
on incentives. We should focus on innovation, research and letting the 
free-market system work. And yes, Republicans do have a plan that would 
support energy production and also support clean energy, an all-of-the-
above energy plan. We support production of clean natural gas, wind 
power, solar power, nuclear power as well as the traditional fossil 
fuels. We, as Republicans, have our eye on the future, and we know that 
the United States doesn't have an unlimited reserve of fossil fuels, 
and we understand we need to pursue other energy sources, energy 
diversity. But Republicans also understand that we can't get this 
overnight by pursuing a series of damaging tax increases.
  And Congressman Latta, I will yield back my time for further 
discussion on this issue.
  Mr. LATTA. Thank you very much. I appreciate that. You have brought 
up some very good points, especially when you are talking about rural 
America. I know in my district when I go in the plants, one of the 
questions I always like to ask is how many folks have driven X number 
of miles? It is nothing for people in my district to drive 30 to 50 
miles one way to go to manufacturing jobs. If those manufacturing jobs 
are not there or the cost of fuel is too high, they can't get there. 
That is an excellent point. I'm glad you brought that up.
  Ms. FALLIN. Thank you.
  Mr. LATTA. At this time, I would like to call on and yield to a good 
friend of mine from Ohio, the gentleman just to my south. Good 
afternoon.
  Mr. AUSTRIA. I thank the gentleman for yielding. And I want to thank 
the gentlewoman from Oklahoma for putting things in perspective. I 
think you did a very good job of laying things out. It certainly 
applies to Ohio. And to the gentleman from Ohio (Mr. Latta), thank you 
for your work in Ohio. I have had an opportunity to serve with you for 
10 years in the State legislature. Together we worked on some good 
things to move our State forward, comprehensive tax reform that lowered 
income taxes for families and small businesses. We helped to make Ohio 
more business friendly, especially in the manufacturing industry, by 
phasing out tangible personal property tax and corporate franchise tax.
  When we look at the proposals before Congress today, this cap-and-
trade proposal, on the surface, it sounds harmless. But it isn't. It is 
not, for the reasons that the gentlelady from Oklahoma just talked 
about. It hurts Ohioans as far as jobs, as far as businesses, and it is 
not a good thing. This proposal is going to increase the price of the 
cost of energy and the price for anyone who turns on a TV or fills up 
their gas tank or turns on the heat in the winter. Their cost of energy 
is going to go up.
  The Congressional Budget Office, in the initial proposal that was 
brought forth by this administration, estimated that the cost of energy 
in the average household will go up approximately $1,600 per year. We 
have seen figures as high as $3,000 per year by MIT and other credible 
organizations that are following this very closely. So the cost of 
energy is going to go up on not just Ohioans, but all Americans.
  And I think at a time when we are struggling economically, we are 
going through an economic crisis, it is not the time to be raising the 
cost of energy on families and small businesses like we are going to be 
doing with cap-and-trade if this moves forward.
  Let me also point out the fact in our State, in Ohio, as in many 
other States, in Ohio, manufacturing and agriculture are the two top 
industries in our State and will get hit the hardest with cap-and-
trade. As was just mentioned by the previous speaker, manufacturing 
jobs will be at stake. American companies will be less competitive 
internationally against other countries that will not be playing by the 
same rules, that will not have the same regulations on them like China 
and India, and will put them at a disadvantage from a competitive 
standpoint. That in turn is going to cost jobs.
  Ohio, again, as in many of the other Midwest States across our 
country that are heavily into manufacturing, is going to get hit the 
hardest by this. And this is not a good thing for that industry, as 
well as the agriculture industry, as was just mentioned, which relies 
heavily on fuels for tractors, for transporting crops and going to the 
store and so forth. So it is going to increase the costs of energy as 
well as hurting those who are trying to do business in the State of 
Ohio as well as job loss.
  I also want to point out one other factor for our State, which I know 
is very diversified from State to State, on the chart that you put up 
previously. In the State of Ohio, 87 percent of our fuel, of our energy 
comes from coal. And coal will be hit directly by the cap-and-trade. It 
is going to put mandates on undeveloped technologies for coal-fired 
plants. In some cases, coal-fired plants may not even be able to comply 
with this, and they may have to close down. And that too could cost 
jobs in the State of Ohio.
  So when you look at the cap-and-trade and the way this is put 
together, it should be called a ``cap-and-tax'' as many of the other 
Members had mentioned because, Mr. Speaker, I think clearly this is a 
cost that is being passed on to every American.
  And Republicans, as was mentioned, do have an alternative. I think we 
all want to see cleaner energy. We all want to see more efficient 
energy. But we do have an alternative plan that is out there that will 
have less reliance on foreign oil, that would look at the resources 
that we have available in this country, that would help us produce and 
make us more energy independent, give us more energy independence with 
increased exploration and development of new and renewable energy 
sources, to help promote alternative forms of energy like solar, like 
wind and other alternative sources of energy that are out there. So we 
do have an alternative way to get to where we want to go.
  Again, I think the cap-and-trade doesn't make sense for Ohio, and it 
is going to cost jobs. It is going to put an increase in the cost of 
energy for all Americans. And I think we can do a better job and have a 
better alternative out there that we should be pursuing.
  And I thank the gentleman from Ohio for yielding.
  Mr. LATTA. I appreciate your being here. And you bring up an 
excellent point when you talk about jobs disappearing. Last summer, I 
was number 9 in the list the National Manufacturers Association puts 
out. I was number 9 in the United States in manufacturing jobs out of 
435 districts. Earlier this year, I dropped to 13 already. And we are 
watching those jobs disappear from across Ohio and across this country. 
And you are absolutely right. We have a massive national energy tax. 
Those jobs aren't going to stay. They can't compete. And they are gone. 
So that is an excellent point. Thank you very much. I appreciate it.
  At this time, I would also like to introduce my good friend from 
Illinois who also represents manufacturing and what it can do to his 
State and also across the Midwest.
  Mr. MANZULLO. Mr. Chairman, the person who has been forgotten in all 
the debate that has been happening is the American worker. I can 
remember when I was a little kid, my dad used to pack his lunch box, a 
black tin box with a round top, with a salami sandwich, a piece of 
fruit and a thermos of coffee, as he would rise early in the morning, 
go off to work at the factory, and come back with a sense of 
satisfaction that he had made something with his hands.

[[Page 12806]]

  And that perhaps is the emblem of the American worker, somebody who 
actually worked in a factory and then became a master meat cutter in 
his grocery store, master restaurateur, and at the same time was an 
expert carpenter and cabinetmaker. He was a person who could do 
marvelous things with the hands that God gave him.
  That perhaps also is the picture of the American that we are not 
examining as we take a look at this entire cap-and-trade system. 
Because after all, it is the American worker who is going to be 
disadvantaged in many ways because of this theory that the majority 
wants to impose upon the American family, which according to the 
nonpartisan Congressional Budget Office, would spike the cost of energy 
for the average American family of somewhere between $700 and $2,200 a 
year. So we start with the fact that the American worker is going to be 
paying a lot more for his or her energy at home before he leaves and 
goes off to the factory.
  Once he gets to the factory, exactly what is going to happen? Well, 
the factory is already under tremendous competition, competition 
domestically because of high productivity of the American manufacturers 
and competition because of offshore, because of countries that don't 
have OSHA standards, that have very few environmental standards, who 
care less about the safety of the worker and more about shipping that 
product to the United States.

                              {time}  1600

  So we start with the distinct disadvantage already in the 
manufacturing sector. How much more can the American worker take? How 
much more can the owner of that factory take?
  I assembled this past week--in fact, yesterday--in the congressional 
district that I represent, a congressional district that has in its 
largest county an over 25 percent manufacturing base--55 or 60 small 
manufacturers. I laid out to them this cap-and-trade system and exactly 
what it would mean to them as manufacturers. The looks upon their faces 
were nothing less than startling because we start with the proposition 
that 535 people in Washington, D.C., suddenly wake up in the morning 
and decide, well, America should go into the green business, that 
America should get involved in the energy-saving business as if the 
American manufacturer and his worker have been on the sidelines, doing 
nothing.
  You have great manufacturers out there, like the Perks family from 
Rockford, Illinois. The Perks family has been around for three 
generations now, involved in combustible burners. Their goal has always 
been to make the most efficient combustible burner possible, and they 
lead the world in that technology. They just didn't wake up one morning 
and say, ``We should start saving energy.'' That's what productivity is 
all about. That's what the American manufacturer is all about--to be 
giving him and the small inventor the opportunity to be able to go out 
and to make products--to make them run faster, quicker, and leaner.
  The Federal Government didn't invent the term ``lean manufacturing.'' 
The Federal Government didn't come up with ISO standards of excellence 
and productivity. The Federal Government does more to hinder the 
innovation ability and the productivity and the energy savings of the 
American manufacturer than it does to help them out. Take, for example, 
all of the American machinery in Harvard, Illinois. There is an 
extraordinary patent on being able to run hydraulics on an as per unit. 
It gives a shot of power to move that hydraulic pump, and then the unit 
shuts off, saving between 60 to 80 percent of the energy costs versus a 
machine that runs all the time.
  No one in Washington called the people back home in Harvard, 
Illinois, and said, We have this great idea for you. The people in 
Washington are calling the people whom I represent and are saying, I've 
got news for you. I don't have new innovations for you. I don't have 
new technologies for you. I have a new task that's going to make you 
less competitive with the world, the so-called ``cap-and-trade tax,'' 
because the people in this body and in the other body are going to say 
that we are manufacturers and that we know everything about 
manufacturing as we sit here in our pin-striped suits and don't even 
know what the sweet smell of machine oil is because most of them have 
never been in a factory in their lives. They're going to tell our 
American manufacturers how to run their factories.
  As I talked to our American manufacturers yesterday, 55 or 60 of 
them, several have places where they're already manufacturing for 
domestic consumption in China and in Mexico. Their faces spoke the 
results. If it's going to become so much more expensive to manufacture 
in the United States, we'll just do more manufacturing in Mexico and in 
China. Do you know what, Mr. Speaker? The cost of shipping finished 
items from China to the United States will be less than the cost of the 
increase in power for people to make their products under the new cap-
and-trade bill. This is absolute lunacy to be able to subject the 
American manufacturer and the worker to this, the worker who gets up at 
the crack of dawn every morning, who packs his lunch box and goes off 
to work and gets in his old car and puts in 8 or 10 or 12 hours a day, 
working to support his family, working to get the kids through college, 
working to pay the mortgage. All of a sudden, Congress says, You don't 
know what you're doing. You don't know how to run your factory.
  All we have to do is look at what happened in Europe. Look at the 
famous cap-and-trade system in Europe. Now, I don't usually look to the 
Europeans for examples except when they fail. In this case, the cap-
and-trade system, Mr. Speaker, has been a complete and total failure. 
Why is that? Well, it's because you go across the Strait of Gibraltar, 
into Morocco and northern Africa, and you see countries that are not 
locked into the same type of system of control emissions. In fact, 
Kollo Holding in the Netherlands makes a silicon carbide. According to 
an article in The Washington Post, it's used as an industrial abrasive. 
It's the finest factory that you could find, the best in ecological 
construction, the finest in meeting the most stringent requirements to 
reduce the emissions of carbon. They're in big trouble, huge trouble, 
because right across in Morocco you will find a competitor--and in 
China--that can make it cheaper and that can ship it to Europe.
  So what happens to the brave soul in Europe who complies with their 
ill-fated cap-and-trade system? He'll probably go out of business. 
That's exactly what happens. What's going to happen to the United 
States? There will be a southern movement to Mexico as American 
manufacturers will be making more of their products in Mexico and 
shipping it across the border because it will be a lot cheaper as they 
won't be sacked with a cap-and-trade system.
  If you take a look at the Government Accountability Office report of 
December of 2008, this is their own organization that sets up standards 
by which to make measurements of efficiencies in different programs. 
The Government Accountability Office says there are better, less 
expensive and more direct methods to accomplish the goal of reducing 
emissions. Well, that's interesting. What are those? Well, perhaps 
someone ought to take a look at what the American manufacturer is 
already doing. You can go to a Danish manufacturer in Rockford, 
Illinois, called Danfoss. Danfoss makes these machines that hook onto 
another machine. The Danfoss machine, Mr. Speaker, measures the exact 
amount of energy necessary in order to run the machine right down to 
the lowest fraction of electrical unit required. It is highly 
efficient.
  No one from Washington called the Danfoss engineers and said, We have 
an idea for you. We, in Congress, wear pin-striped suits, and we can 
tell you how to run your manufacturing facility. No one called the city 
of Rockford years ago and said, We've got a great plan for you where 
you could take the sewage that you have in the city, turn it into 
methane and run three turbines so you could help the electrical grid, 
and

[[Page 12807]]

there would be many fewer carbons going into the air.
  Mr. Speaker, Washington has no news for the American manufacturer or 
for the American worker except bad news. That's why we have to defeat 
this. We already have a lot of plans in place. One is the Republican 
alternative, and that's the one that rewards ingenuity. It makes it a 
lot easier for people to change to the latest techniques, to scrub the 
air, to scrub the environment. It just amazes me. It totally amazes me.
  We are in Rockford, Illinois, where there is close to 14 percent 
unemployment. It's the same in Belvidere, Illinois. Our Chrysler plant 
is closed for 60 days. Chrysler is in bankruptcy. We've gone from 16 
million cars sold 2 years ago to 8 million cars sold this year. On top 
of all of the problems that manufacturing is having, now we need one 
more--one more regulation, one more requirement, one more chop on the 
block of the American manufacturer.
  It's time to say ``no'' to this big government that thinks it knows 
best. It's time to say ``no'' to Washington that thinks it has all of 
the answers. It's time to say ``yes'' to the American worker, ``yes'' 
to the little inventor, ``yes'' to the American manufacturer--the 
people who made things with their hands, the people who created all the 
wealth in the world, the leaders in technology, the leaders in 
ingenuity--not with the help of government but with the help of their 
own minds and their own hands.
  Mr. LATTA. Well, I thank the gentleman, and he is absolutely correct. 
When you look at these margins that these companies are working with 
today, they are slim.
  It's the same thing in my district. You know, I get in those plants 
every week. When I go in those plants, they show me what one blip of an 
electrical costs. I have massive, heavy energy users in my district, 
especially on the electrical side. With one blip, they could say, You 
know what? We're done. We'll go overseas. We don't need this, and we 
don't need one more Federal regulation. We don't need one more 
government bureaucrat telling us how to run our business, and we're out 
of business in this country.
  Then what do we tell our constituents? What do we tell the next 
generation of Americans out there? That you don't have a job. What do 
you have to look forward to in the future? It's not very bright when 
you look at this piece of legislation.
  You know, the President said when he was running for office that, 
Under my plan of a cap-and-trade system, electricity rates will 
necessarily skyrocket.
  That will cost money. They will pass that money on to the consumers. 
It goes from one to the next, and it's going to finally get down to 
those honest people who are going to try to be in those factories, 
making a product, finding out first they don't have jobs and, at the 
same time, that their electricity rates at home are just going to 
skyrocket. How are they going to make a living? How are those kids 
going to go to college?
  I thank the gentleman.
  At this time, I'd like to yield to my friend from Louisiana. Thank 
you.
  Mr. BOUSTANY. I thank my friend from Ohio for yielding time to me.
  I want to go back for a moment, back to March, at a time when the 
Ways and Means Committee in the House convened to hear Secretary 
Geithner's testimony to us regarding President Obama's budget proposals 
and specifically regarding the issues related to cap-and-trade and some 
proposed tax increases on the oil and gas industry. In fact, in 
addition to cap-and-trade, the administration is proposing $31.5 
billion in increased taxes on the U.S. domestics--the small, 
independent companies that produce oil and gas and that power our 
country. So, at the time, I had a very simple, a very straightforward 
question for Secretary Geithner, who was testifying.
  I said, Mr. Secretary, how many jobs will this kill, particularly on 
the gulf coast? The gulf coast is trying to recover from hurricanes, 
but yet, at the same time, it has done a magnificent job of getting the 
oil and gas industry back up in the Outer Continental Shelf and 
inland--our refineries--to provide energy for our country. So I asked 
him simply: How many jobs do you intend to kill with this budget? He 
could not answer the question. So I gave him a little time, and I 
followed up with a letter to Secretary Geithner.
  Two or three weeks elapsed. I received a letter today, and I have yet 
to receive an answer on how many jobs this administration intends to 
kill with its energy policy of cap-and-trade and of increased taxes on 
the domestic oil and gas industry.
  Now, I know for a fact that we have about 1.5 million people directly 
employed in the oil and gas industry and that there are about 6 million 
additional folks who have jobs related to this, whether in 
manufacturing or in support services. So, if we look back and if we 
look at a time when a previous administration, Mr. Carter's 
administration, raised a windfall profits tax on the oil and gas 
industry, it devastated our domestic industry. What happened? We became 
more dependent on foreign oil, and we saw price spikes in energy.
  So what's going to happen with this massive tax increase that is 
compounded by cap-and-trade? Well, my prediction is we're going to see 
massive job loss.
  I was down in Louisiana for 2 weeks back during the Easter recess. I 
toured and went along the coast, and I visited a lot of these small 
companies, companies that employ pipefitters and welders, people who 
work on the boats, folks who do the electrical work on these rigs, 
people who do the fabrication work. These are good-paying jobs, high-
paying jobs with benefits. These are manufacturing jobs, the same kind 
of manufacturing jobs my friend from Illinois just spoke about.

                              {time}  1615

  And our President says his goal is to save or create 3.5 million jobs 
before the end of 2010. I want to know a simple answer to the question 
I posed: How many jobs does this administration intend to kill with its 
energy tax proposals? It's a simple question.
  And I think the American people deserve an answer. And certainly the 
good, hardworking folks down in Louisiana and Texas and Alabama and 
Mississippi who supply a large amount of the energy that this country 
uses deserve a simple, straightforward answer from Mr. Geithner and 
this administration.
  Now, let me make one clear point here. I want to quote something 
first. Let me quote something from this letter that I received from 
Secretary Geithner. He says, ``To the extent the credit,'' he's 
referring to the tax credits that the oil and gas industries had since 
1913, ``to the extent the credit encourages overproduction of oil, it 
is detrimental to long-term energy security.'' Overproduction of oil? 
Does any American believe that we have overproduction of oil? I would 
like to know what planet the Secretary is living on. What kind of 
information is he getting, for God's sake?
  Now, I think it's also important to recognize that if we're going to 
have a reasonable and sensible energy policy that the American public 
can believe in, an energy policy that diversifies our sources of energy 
and utilizes oil and gas and clean coal technology and nuclear power as 
well as green technology and alternative fuels, that's the kind of 
energy policy that we're promoting. That's the energy policy that the 
American people want to hear about. That's the energy policy that will 
unleash individual American genius to solve our problems.
  But if you're thinking about energy policy, our transition to that 
strategy involves natural gas as a diversified fuel as well as 
expanding nuclear power. But keep in mind that 30-35 percent of the 
natural gas that this country uses comes from rigs, oil and gas rigs 
that were drilled within the last 2 years. 35 percent.
  Now, I have to tell you that the rig count in the United States since 
September is down by over 50 percent and dropping because of these tax 
proposals. It's dropping, and that means we're going to have a shortage 
down the line of natural gas and oil, and

[[Page 12808]]

we're going to become more dependent on oil from foreign sources, and 
we are going to become more dependent on liquefied natural gas being 
imported into this country.
  All the while, we're kind of like--we're the Saudi Arabia of natural 
gas. We have a lot of natural gas reserves, but we're not utilizing 
them. And this energy policy that the President is proposing, these tax 
increases will devastate our industry, and we will become more 
dependent.
  So, again, I asked President Obama and Secretary Geithner how many 
jobs do you intend to kill with this policy? And I think the American 
people, again, deserve a straight answer. Again, we're talking about 
good high-paying jobs across the board, manufacturing jobs, jobs that 
allow folks to buy homes, jobs that allow them to send their kids to 
college.
  Finally, let me just say that I believe it is wrong for this 
administration to deliberately pick winners and losers. It's the height 
of arrogance. What we ought to be doing with an energy policy is 
unleashing American genius to solve these problems, the same kind of 
genius that have solved many problems before in this country.
  One last thing I would like to mention is that back during the heyday 
of World War II when this country was in a fight against Nazi Germany 
and the Japanese and the concerns about energy were there and there was 
a fight for oil reserves and so forth, there was also a fight to see 
who was going to get nuclear power first. And it was because this 
country had a well-developed manufacturing and refining system with all 
of the chemical engineers, the petroleum engineers, that they were able 
to bring forth enough of the technical capability to win the race for 
atomic energy. And this is the same energy industry that this 
administration is currently trashing with this tax policy.
  So, again, I want to know a simple answer to a simple question: How 
many jobs does the Obama administration intend to kill with cap and 
trade and with these targeted tax increases on the oil and gas 
industry?
  With that, I will yield back to my friend.
  Mr. LATTA. I thank the gentleman.
  If I could just comment on a couple of things that he said.
  I think you're absolutely right. I know when they shut the lights on 
us right here on this floor last year when we were down here talking 
about energy--and it wasn't hard to remember that we were talking about 
65 or more percent of all of the energy that we were consuming in this 
country was being imported in this country. I remember those T. Boone 
Pickens commercials saying the largest transfer of wealth in history 
was occurring. I believe the number was like $700 billion per year. And 
so when you see those things happening, it's hard not to get up here 
and speak out on that.
  I yield back to the gentleman.
  Mr. BOUSTANY. This administration doesn't understand the difference 
between our large multinational energy companies like ExxonMobil, 
Chevron that do most of their work overseas, and independently owned, 
American-owned energy companies working in the Gulf of Mexico who 
provide most of the oil and gas that this country utilizes. These are 
small companies operating in the Gulf of Mexico, predominantly, some in 
California and other areas around the country, but predominantly in the 
Gulf of Mexico. And this industry will be devastated by these tax 
proposals, and it's going to hurt our energy production, and it's going 
to make the price of oil and gas and gasoline and electricity go up 
significantly. It's absolutely the wrong policy at this time. We need a 
diversified energy policy, and we shouldn't punish those who are 
producing energy that Americans need desperately today.
  Mr. MANZULLO. Would the gentleman yield?
  Mr. BOUSTANY. I would be happy to yield.
  Mr. MANZULLO. I thank the gentleman.
  Perhaps the answer to the number of jobs that would be lost may be 
found in the draft of the American Clean Energy and Security Act. This 
is the Cap-and-Trade Act under title IV, if I'm reading this correctly, 
because it talks about worker transition. Now, that normally means 
somebody who's lost his job as a result of a government regulation and 
has to transition to something else. So they already are figuring that 
some people are going to be losing their jobs.
  My gosh, you take a look at the quote of the President. It's going to 
cost a tremendous amount of money, electricity rates will skyrocket in 
factories. When you look at the small margin of profit, for example, on 
castings--already under tremendous pressure from overseas--they won't 
be around.
  But something happened interestingly yesterday at the conference we 
had in Rockford, Illinois. Dr. Redmond Clark is a Ph.D. in 
environmental sciences. He's also an inventor and runs a business, and 
he said this astonishing statement: If American manufacturers, if all 
of America went to zero carbon emissions, within 7-10 years, the 
Chinese would more than compensate and put into the air all of the 
carbon emissions that the Americans had saved. Now, that is how flawed 
this plan is.
  Mr. BOUSTANY. I thank the gentleman.
  I would just add that really a productive way to reduce emissions 
would be to work out a cooperative agreement with China--which also has 
large amounts of emissions into the atmosphere--and let's use the 
technology that we have today to work with the Chinese to reduce 
emissions. But instead, with these tax proposals, they intend to 
destroy this industry. And I will tell you from my experience in 
Louisiana in the 1980s, once these jobs are gone, folks leave. They go 
off and do other things. That expertise is gone. You can't develop it 
overnight. And this is at a time when our energy needs are critical.
  So I have to say when the President talks about saving or creating 
3.5 million jobs, this policy is not the way to do it. It will kill 
jobs, and it will kill many jobs.
  Mr. LATTA. I would like to yield to the gentlelady from Oklahoma.
  Ms. FALLIN. I appreciate your comments.
  We're already seeing some of the effects in our oil and gas energy 
sector in the State of Oklahoma of job losses already just by talking 
about the cap-and-trade piece of legislation. And you were mentioning a 
few moments ago about the pollution of other countries and how if we 
have cap and trade here and we try to control our emissions--which we 
should, we should have reasonable policy on that--how China and India 
and some of those other growing economies will still keep polluting. In 
fact, a statistic that I saw said two-thirds of the world's population 
comes from countries other than the United States. So while we may put 
some heavy restrictions that could cost jobs and investment in the 
United States, these other countries will take those market shares from 
us and continue polluting.
  I was interested in your comments by Secretary Geithner who said we 
have an overproduction of our oil, which that is an unusual comment 
when our Nation is so dependent upon foreign energy. I think many of us 
in this body believe that our country is at risk in our national 
security and economic security by buying almost 70 percent--65, 70 
percent of our energy supplies from other foreign countries while 
spending around $700 billion buying that foreign energy. Just think 
what that $700 billion--if we produced our own energy--what that would 
do in our Nation as it relates to jobs and investment in our 
marketplace here in the United States.
  But yet we continue to send that money to foreign countries buying 
their energy versus encouraging innovation, free enterprise here in 
United States of all kinds of energy sources.
  And I just truly believe we have the knowledge, we have the capacity 
and the intellect in the United States to develop these alternative 
means of fuel and to reduce our carbon emissions. Look at natural gas. 
There is a proposal here in Congress to encourage more investment in 
C&G cars, more infrastructure investment in natural gas. And I hope 
that we continue to push

[[Page 12809]]

those kinds of policies rather than massive tax increases and standards 
that will actually hurt our national economy and hurt our jobs.
  Mr. MANZULLO. Will the gentlelady yield?
  Another shocker that we found out is built into this proposed bill, 
there is a threshold limit so that the smaller manufacturers--and you 
don't even have to have a smokestack to be covered by this because 
buildings naturally emit a carbon dioxide going out through the 
windows--but the smaller manufacturers would be exempt from cap-and-
trade. However, the EPA has now empowered itself to control carbon for 
greenhouse emissions. So they will be coming in with another layer of 
regulations even for the smaller ones.
  And--and this is almost certain--the EPA, in the past several months, 
had this proposed standard to tax cows. Any farmer that has a herd in 
excess of 25 cows--because cows are big methane emitters--$125 per head 
per year. I don't make that much profit when I sell my beef cattle, 
even though we haven't done it in the past couple of years.
  Washington, D.C. must be its own planet, how people can come up with 
these absurd ideas. And back home, we have two methane digesters. Some 
farmers got a little grant from the government to help out, and that's 
fine, and all of the waste from 300 dairy cattle near Pearl City, 
Illinois, go into this methane digester, and the methane is recaptured, 
goes back on the grid. It's enough to run a city of 500 homes. It's 
amazing.
  How is it that people that know so little about manufacturing can, 
overnight, come up with the idea that they are the experts on green 
manufacturing as if American manufacturers were doing nothing to 
increase productivity?
  Mr. BOUSTANY. If the gentleman would yield,
  You know, U.S. companies in the oil and gas industry do the safest 
and most environmentally friendly work of any of the companies around 
the world. We've got Louisiana and Texas expertise disbursed all over 
the globe as a result of what happened back in the 1980s with the 
windfall profits tax. I run into workers all the time who are coming 
back to Louisiana to visit family. And they have been away, and they 
wish they could work in the Gulf of Mexico around this country doing 
work in this country to produce energy for our country. Yet, they were 
pushed out. We lost those jobs. And as the energy industry has started 
to come back, now we're seeing the specter of these increased taxes, 
which will be devastating.
  And, in fact, I have a friend of mine--he and I finished college 
together--he's a petroleum engineer, and he's lived his entire 
professional life overseas because he went out into the work world at 
the time that this tax took place and devastated the domestic energy.
  With that, I yield back to my friend.
  Mr. LATTA. I recognize the gentlelady from Oklahoma.

                              {time}  1630

  Ms. FALLIN. I thank the Congressman. I have one thing I just wanted 
to add. President Obama has talked about how the United States can 
achieve a new long-term subsidization of green jobs like similar to 
what Spain has done, and I have a report from the Institute For Energy 
Research, which talks about other countries.
  And what has happened is they have spent billions of dollars of 
taxpayer resources to subsidize renewable energy programs and to add 
more greening within their societies. And as they passed some carbon 
tax-type legislation, it was showing that, according to their results, 
compared to what the United States could expect, that the U.S. can 
expect 2.2 jobs destroyed for every one renewable job that is financed 
by government-based bond, what has happened in Spain. Only one of 10 
jobs actually creating a green investment would be permanent. They'd be 
temporary jobs.
  Mr. LATTA. I thank the gentlelady.

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