updated 6/8/2009 3:40:23 PM ET 2009-06-08T19:40:23

Low-income families will receive hundreds of dollars a year to help pay higher energy bills if Congress enacts the first-ever limits on the gases blamed for global warming, according to a new analysis.

But it is unclear just how much more those families will have to pay for energy.

A Congressional Budget Office analysis of the cost of global warming legislation working its way through the House estimates that low-income families could initially receive $161-$359 in credits or rebates, if the bill becomes law. That amount could rise to $282-$628 by 2019, depending on the family's size.

The money would come from the government auctioning off pollution permits to companies that release climate-altering gases. The amount of permits that will be sold will increase over time and they will become more expensive, generating $846 billion from 2010-2019, the analysis says.

The bulk of that money — $693 billion — would be given away as free permits to companies and states to ease costs. The remainder will pay for research, the energy tax credits and rebates, and a worker assistance program that will provide benefits including lost wages and health insurance to people who lose their jobs because of the limits placed on global warming pollution.

Rep. Ed Markey, D-Mass., who is sponsoring the bill along with Rep. Henry Waxman, D-Calif., called it a win-win Monday, pointing out that it could actually reduce the federal deficit by a total of $24 billion over the next 10 years. Over that decade, however, the deficit is expected to total $9.3 trillion.

"The Waxman-Markey bill will get our planet out of the red, while helping to put our budget back in black," Markey said in a statement.

President Barack Obama has repeatedly said that any effort to control the gases blamed for global warming should provide relief to lower-income households. His budget proposal called for the auctioning of 100 percent of the permits to companies, with most of the money going to poor and middle-class families to ease higher energy prices.

The bill before Congress would only return revenues directly to families from the sale of 15 percent of the permits. It is unclear just how much of the additional cost in energy and other goods the resulting rebate or credit will cover.

Various studies by the federal government, universities, and think tanks have found that the average household could pay an extra $98 to $1,600 a year for electricity, gas and other goods that need energy to be produced if the government requires mandatory reductions in heat-trapping gases. Lower-income households are likely to feel the burden more because they spend a greater percentage of their income on energy.

The price increases are expected to come as companies pass on the cost of buying permits and reducing the emissions linked to global warming.

The legislation calls for a 17 percent reduction in greenhouse gases by 2020, and an 83 percent cut by mid-century.

It will achieve that reduction by giving away and selling pollution permits to companies operating 7,400 facilities nationwide, including power plants, refineries and factories. Those companies can then reduce pollution to meet limits, or purchase excess permits from companies that have already met the threshold.

Republicans immediately said the analysis confirmed that energy prices would rise as a result of the legislation. They also said the tax credit — which would only apply to individuals making less than $23,000 and families earning less than $42,000 — means some working-class families will be left out.

"Increasing Americans' fuel and utility bills in this recession is not only bad policy, but it completely ignores the hardships millions of Americans are already facing," said Rep. Dave Camp, R-Mich., the top Republican on the House Ways and Means Committee, which plans to take up the bill this month. "This is dangerous legislation in desperate need of closer review."

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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