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Commentary: Regressive Energy Taxes Hit Poor and Lower-Income Families, Creates More Inflation

Commentary by Derrick Hollie originally published at RealClearEnergy.

It’s hard to believe that the U.S. economy doesn’t have enough money, when the simplest definition of inflation – now at a 30-year high – is too much money chasing too few goods.

President Biden has convinced himself that the way to increase the number of goods is to inject even more money into the economy. But if we could spend our way out of our inflationary problem, we would not be in one to begin with.

According to budget expert Brian Riedl, over the past two years Washington has added $6 trillion in new deficit spending to combat Covid-19 and support the economy. That doesn’t even count the $550 billion for the infrastructure bill that Congress just passed or the sharp spike in discretionary spending that would increase the budget baseline by $1 trillion over the next decade.

On top of that, the Federal Reserve has been buying up $120 billion worth of Treasury and housing-backed securities every month. Initially, Biden and his team insisted that the inflation Americans were experiencing was “transitory,” but they have since changed their tune as it has become obvious that inflation is here to stay.

Biden is blaming inflation on the standard left-wing bogeyman – the energy sector.

“The largest share of the increase in prices in this [inflation] report is due to rising energy costs,” the president recently told Americans, adding that he had asked the Federal Trade Commission to deal with “market manipulation or price gouging in this sector.”

This move attempts to deflect attention from the administration’s responsibility for higher oil and gas prices. It has purposely looked to cripple the domestic fossil fuel industry through policies like killing the Keystone XL pipeline and (illegally) banning oil and gas development on federal lands. These policies have worked to chill investment and development. With demand rising, output of oil and gas should be booming, but it’s still well below pre-pandemic levels.

Just two years ago, the U.S. Energy Information Administration reported that the United States had become the world’s top producer of oil and natural gas. Now, having hamstrung the domestic oil and gas industry, the administration has been reduced to pleading with OPEC+ (which includes adversaries such as Russia, Iran, and Venezuela) to increase oil production.

OPEC+ refused, an embarrassing setback that puts the lie to the administration’s claim that “America is respected around the world again.”

A gallon of gasoline costs $1.29 more today than it did this time last year. The U.S. Energy Information Administration forecasts that this winter Americans will be paying 30% more for natural gas, 43% more for heating oil, 6% more for electricity, and 54% more for propane to heat their homes than they did last winter – and even more if the weather is colder than normal. Higher energy costs have a disproportionate impact on vulnerable populations, including minority and low- and fixed-income households. These costs are essentially a regressive tax on the poor.

When Secretary of Energy Jennifer Granholm was asked what her plan was to increase domestic oil and gas production and lower prices, she responded, “That is hilarious. Would that I had the magic wand on this. But as you know, of course, oil is a global market. It is controlled by a cartel. That cartel is called OPEC.”

If OPEC’s decision not to increase production is the culprit, then why is the administration threatening to go after gas stations instead of finding ways to increase domestic output?

Meantime, the president’s Build Back Better plan is chock-full of Green New Deal-type energy policies that would result in even higher energy costs to American families. Make no mistake, for the Left, higher energy prices are a feature, not a bug. White House spokesperson Jen Psaki recently gave the game away when she said, “Our view is that the rise in gas prices over the long term makes an even stronger case for doubling down our investment and focus on clean energy options.”

The administration sees higher energy costs not as a problem but as an opportunity. Since it cannot bring down the price of renewables to compete with oil and gas, it needs higher oil and gas prices. But when that happens, as it has, the administration wrings its hands and complains, or tries to sic the FTC on “price gougers.”

The United States has enjoyed a competitive advantage because of its lower energy costs. American industries pay anywhere from two to four times less for energy than industries in Europe. The Biden administration is pursuing policies that would surrender that advantage by saddling energy producers and consumers alike with more regulations and taxes.

President Biden is sure that spending trillions more taxpayer dollars on his Build Back Better plan is the way to fix the mounting inflation problem. He’s wrong: it will only make things worse. Congress should reject his plan.

Derrick Hollie is president of Reaching America, an education organization he founded to addresses complex social issues affecting black communities.

Deneen Borelli

Deneen Borelli is the author of Blacklash: How Obama and the Left are Driving Americans to the Government Plantation. Deneen is a contributor with Newsmax Broadcasting. She is a former Fox News contributor and has appeared regularly on “Hannity,” “Fox & Friends,” “Your World with Neil Cavuto,” and “America’s Newsroom.” She has also appeared on Fox Business Network programs “Making Money with Charles Payne,” “The Evening Edit with Liz MacDonald,” and “Cavuto: Coast to Coast.” Previously, Deneen appeared on MSNBC, CNN, the BBC and C-SPAN. In addition to television, Deneen co-hosted radio programs on the SiriusXM Patriot channel with her husband Tom. Recently, Deneen co-hosted the Reigniting Liberty podcast with Tom. Deneen is a frequent speaker at political events, including the FreedomWorks 9.12.2009 March on D.C. which drew a crowd estimated at over 800,000 people. Deneen is also an Ambassador with, a social media platform that promotes free speech, and with the America First Policy Institute (AFPI) which advances policies that put Americans first. Deneen testified before the U.S. House of Representatives Committee on Natural Resources in May 2011 and before the Ohio House Public Utilities Committee in December 2011. Previously, Deneen was a host, Outreach Director with overseeing its outreach program, a Project 21 Senior Fellow, and Manager of Media Relations with the Congress of Racial Equality (CORE). Prior to joining CORE, Deneen worked at Philip Morris USA for 20 years. During her corporate career at Philip Morris she worked in various positions, her last as Project Management Coordinator in the Information Management department where she was responsible for the department’s mandated quality processes, communications, sales information and database management. Deneen began her Philip Morris career as a secretary and advanced to positions of increasing responsibilities. Deneen worked full-time and attended classes at night for 11 years to earn her B.A. in Managerial Marketing from Pace University, New York City. Deneen served on the Board of Trustees with The Opportunity Charter School in Harlem, New York. She appeared in educational videos for children, worked as a runway fashion model, and auditioned for television commercials. Her interests include ancient history, pistol target shooting, photography, and volunteering at her church. Deneen currently resides in Connecticut with her husband Tom.

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