We’ve been talking about climate change legislation on our blog for some time. Now we are seeing real movement on this issue at the federal level. The American Clean Energy and Security Act (H.R. 2454) took a huge step forward on June 26th when it passed the U.S. House of Representatives. This important climate legislation impacts low-income households in many ways, but perhaps most significantly in that it provides a starting point for addressing serious climate change issues – like pollution and extreme weather – that disproportionately effect vulnerable, low-income communities.
A major element of the legislation is that it institutes a cap-and-trade system which will set a limit on the amount of greenhouse gases that businesses are allowed to emit, creating emissions allowances. The bill uses revenues from the sale of 15 percent of the emissions allowances to directly reimburse lowest-income households for their increased expenses as prices for energy and energy-intensive goods are expected to rise.
This relief would be provided on a monthly basis to the lowest-income 20 percent of the population, or roughly those below 150 percent of the poverty line, through an existing mechanism known as an Electronic Benefit Transfer (EBT). A small amount of additional relief is provided through an expansion of the Earned Income Tax Credit (EITC) for low-income workers without children, a group that is difficult to reach through the EBT system. You can learn more about how low-income households would benefit from the bill in a new report from the Center for Budget and Policy Priorities, “How Low-Income Consumers Fare in the House Climate Bill.”
There are many elements of the current legislation that are strong positives for low-income communities. This act will make strides in cleaning up the air to create healthier low-income communities, and it will do so without harm to the budgets of the lowest-income households. It also provides for new economic opportunities such as green jobs and increased funds for weatherization programs.
There are many vocal opponents of this legislation, so it is important that the Minnesota members of Congress that voted for H.R. 2454 (Reps. Ellison, McCollum, Oberstar, Peterson and Walz) hear from low-income advocates thanking them for their support. Find out more about how to contact your representative and please call today.
However, as action on the bill shifts to the U.S. Senate, there are some elements of the bill that we believe can be improved:
- Consumer relief in the House bill phases out completely at 160 percent of the poverty line (about $35,000 for a family of four). We urge the Senate to extend relief to all moderate-income families.
- In the House bill, relief is provided based on what the Energy Department calculates as a household’s average reduction in purchasing power. Given the high heating costs in our state, some Minnesota families will face higher than average reduction in purchasing power if energy costs increase. Funds should be allocated to the existing Low-Income Home Energy Assistance Program (LIHEAP) which provides assistance to low-income consumers who face utility shut-offs or other hardships.
You can learn more about our position on how to improve the bill in the Senate by reading “American Clean Energy and Security Act: Impact on Low- and Moderate-Income Minnesotans.” The Senate is expected to take action on this bill in September.