Obama's Energy Policy Hurts the Middle Class

Obama's Energy Policy Hurts the Middle Class

Class warfare was a key campaign strategy employed by President Obama during his successful re-election.

Positioning himself as the hero of the middle class, Obama often repeated that his goal was to ensure that everyone in America would have a “level playing field” and have a “fair shot.”

Unfortunately, too many voters believed Obama’s misleading rhetoric. Ironically, Obama’s regulatory policies, especially his war on fossil fuels, are going to harm those he promised to help.

The foundation of Obama’s energy policy is to reduce our use of fossil fuels – coal, oil and natural gas – by making them more expensive.

Since fossil fuels power our economy – 79.8 percent[1] of our energy comes from these sources – the effect of rising prices will reverberate through our markets. Rising prices for energy and goods and services will impact all Americans but its adverse consequences will be felt most by those in middle- and lower-income households.

Exposing Obama’s deceit stemming from the negative economic consequences of his energy policy on the middle class and minority voters offers conservatives a great opportunity to recruit new demographic groups to the liberty agenda.

During his first term, Obama relentlessly pursued his agenda of increasing the cost of energy.

First, he supported cap-and-trade legislation and when that effort failed Obama followed with regulations from the Environmental Protection Agency (EPA).

During his first presidential campaign Obama explained the cost to consumers of his cap-and-trade plan to the San Francisco Chronicle.

Obama said, “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. . . . Because I’m capping greenhouse gases, coal power plants, natural gas—you name it—whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”

Congressman Charlie Rangel also recognized that consumers would pay the price for Obama’s cap-and-trade policy saying, “Whether you call it a tax, everyone agrees that it’s going to increase the cost to the consumer.”

Thankfully, cap-and-trade failed to become law but the policy loss did not deter the president.

Obama decided to use the power of the Executive Branch to wage his war on traditional forms of energy.

The EPA issued a number of rules under the Clean Air Act that specifically targets coal generated electricity.

The Utility MACT rule, for example, at a conservatively estimated cost of $11 billion a year[2] is one of the most expensive regulations issued by the EPA.

Responding to the Utility MACT rule and other regulations, utilities are closing 175[3] coal-fired power plants. The cost of adding new equipment for the remaining coal facilities to comply with the EPA mandates will be passed on to consumers.

The consequences of higher energy prices will not affect all Americans equally. Rising energy costs are regressive, harming those in lower-income brackets more than higher income brackets. The inequality occurs because lower-income households spend a greater percentage of their income on energy than higher income families.

Consequently, rising energy prices will preferentially harm lower- and fixed-income families.

A study by Eugene M. Trisko for American Coalition for Clean Coal Electricity reviewed the disproportionate impact of higher energy costs on differing income groups from 2001 to 2011.

The study found that the amount of money spent on energy for half of American households that make less than $50,000 almost doubled rising from 12 percent in 2001 to 20 percent in 2011.

Minorities with lower average incomes than white households are disproportionately harmed by rising energy prices.

For example, in 2009, 67 percent of black households and 62 percent of Hispanic households had average incomes below $50,000 in contrast with only 46 percent of white households.[4]

Since minority households have lower incomes than white households, rising energy prices will take a larger share of their family’s disposable income leaving fewer dollars for housing, medicine and clothes.

Obama’s refusal to approve the Keystone XL pipeline, new greenhouse gas regulations from the EPA and discussions of a carbon tax provides more evidence that Obama’s anti-fossil fuel agenda will force energy prices higher.

Communicating the cost of restricting fossil fuel use to hardworking Americans provides the best evidence, proving Obama’s energy policy harms the demographic groups he appealed to during his campaign.

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