Obama’s Ship of State is sailing on a non-existent revenue stream:  Obama counting on cap-and-trade

President Obama is banking on $300 billion to come in by 2022 from a cap-and-trade plan to reduce greenhouse gases, according to a source with knowledge of the president’s proposed budget.

Mr. Obama expects money from the climate-change proposal to start rolling in by 2012, and that amount would come in over the subsequent 10 years as companies purchase carbon offsets, according to the source.

Rolling in from where?

The budget’s assumption of money from a revenue stream that does not yet exist provides a concrete indication that Mr. Obama expects a cap-and-trade system to be in place soon although Congress still must shape, write, debate and decide on a timetable for legislation that likely will be divisive even among Democrats.

“As someone who is very involved in the legislative debates on this, it’s just very premature to be having any number like that,” said Jeff Holmstead, Environmental Protection Agency assistant administrator during the Bush administration.

It’s not just about saving the planet, it’s a stealth revenue-enhancement scheme in the form of higher energy prices, since energy producers will pass the costs of those permits on to consumers:

“I do think it will be eye-opening to a lot of people to find out that cap-and-trade is really about raising taxes,” said Mr. Holmstead, who now works with the energy lobbying firm of Bracewell and Giuliani.

Cap-and-trade plans work by having the government sell to private enterprises the right to emit a certain amount of carbon dioxide or other gases. Those emission rights can then be bought by companies that wish to emit more from companies that can emit less than their targets.

But don’t worry, there’s something in it for everyone, unless you’re in the top tax bracket.  The President plans to use some of that money to fund his plan to extend tax cuts to low and middle-income families to help compensate for those higher energy prices, and to facilitate the government’s ability to pick and choose which energy producers hit the taxpayer-funded jackpot.

Much of the groundwork for the President’s budget plan has already been laid in the recently-passed $787 billion economic recovery plan: the “Making Work Pay” tax credit, and a multibillion-dollar down payment to develop a national electricity grid to harness and distribute energy from alternative energy sources, including wind farms.  That was the bill that Congress didn’t have an opportunity to read before they passed it.

Does that make the President’s plan for cap and trade too big to fail?  If we take that attitude, we’re all sunk.