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updated 7/7/2010 3:55:26 PM ET 2010-07-07T19:55:26

Congressional budget experts say a climate and energy bill now stalled in the Senate would reduce the federal deficit by about $19 billion over the next decade.

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The report by the nonpartisan Congressional Budget Office was the second positive analysis of the bill by a government agency in a month, but is likely to carry more weight than a similar report issued by the Environmental Protection Agency. The CBO is the entity responsible for providing Congress with nonpartisan analyses of economic and budget issues, and lawmakers rely on it for guidance.

The CBO report was immediately hailed by the bill's sponsors, who are struggling to move the climate measure through a divided Congress. Lawmakers have quietly begun considering a more modest approach that would target the electricity sector, in case the more sweeping measure fails.

"There is no more room for excuses — this must be our year to pass comprehensive climate and energy legislation and begin to send a price signal on carbon," said Sen. John Kerry, D-Mass., the bill's chief author.

Many senators have told him and Sen. Joe Lieberman, I-Conn., the bill's co-sponsor, that they flatly oppose legislation that adds even a penny to the federal deficit, Kerry said. "So we hope they look anew at this initiative which reduces it," he said.

In its report Wednesday, the CBO said the energy bill would increase federal revenues by about $751 billion from 2011 to 2020, mostly though the sale of carbon credits in so-called a cap-and-trade plan to be applied to utilities and other sectors of the economy.

The measure would increase spending by about nearly $732 billion, mostly from refunds to utility bills and tax credits, as well as investment in various energy provisions including research and development, the report said.

The Senate bill would tax carbon dioxide emissions produced by coal-fired power plants and other large polluters as a way to reduce pollution blamed for global warming. The legislation has been panned by many Republicans as a "national energy tax." No GOP senator has signed on as a co-sponsor.

An analysis by the EPA last month concluded that the Senate bill, dubbed the American Power Act, would cost households an average of $79 to $146 per year. Kerry and Lieberman said they believe Americans are willing to pay less than a dollar a day to curb global warming, reduce oil imports and create energy-related jobs.

The legislation aims to cut emissions of carbon dioxide and other heat-trapping greenhouse gases by 17 percent by 2020 and by more than 80 percent by 2050.

Even as the CBO was conducting its analysis, Kerry and other lawmakers have begun considering the more modest approach that would limit the carbon tax to the electricity sector.

Some White House officials have begun to speak favorably about such a "utility-only" approach, which they believe could be more attractive to Republicans. At a White House meeting last week, a bipartisan group of senators discussed an emissions cap that would be limited to stationary sources, which would primarily mean power plants and refineries.

No decisions have been reached, although Senate Majority Leader Harry Reid, D-Nev., is aiming to bring energy legislation to the Senate floor before the August recess.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Kerry: Bill doesn't concentrate solely on drilling

  1. Closed captioning of: Kerry: Bill doesn't concentrate solely on drilling

    >>> place today.

    >>> the new climate change bill unveiled yesterday in the senate would give states the power to veto offshore drilling plans drawn up by adjacent states. but at what cost? democratic senator, john kerry , is cosponsoring the bill. you have worked so long on this and obviously, there was some modifications to the bill made about offshore drilling . at what cost to the bill though with these changes which permits the veto, which permits under a ? very thin, very broad guidelines, there can be embargoes, we'll talk a bit about that bill suggested by senator boxer, but there are ways to stop offshore drilling . they can opt out. they can veto the plan.

    >> it's called the democratic process , andrea . there has to be a finding by the interior department , the epa and the commerce department , the noaa section of commerce, that there is a potential of some significant damage to one of those states. if there is that kind of a finding, it seems plausible that that state ought to have a say in what happens. they shouldn't just be made into victims or made to swallow a risk they don't want to take. i think the process says, look, if there's a recommendation to do this, then they have to be part of the process of deciding whether it happens. but remember, that most of the prospect for really future drilling is in the gulf of mexico and in alaska. nobody has high anticipations of some unfound oil supply in the atlantic that i know of. and many of those states have always simply never wanted it to take place off their coast. moreover, most people already understand that drilling, while it's important and we have to continue to do it in some places, it's not the solution to our energy crisis . the solution is to be finding alternatives to supply energy. what happened in the gulf of mexico should encourage people to embrace the urgency and get it done.

    >> what happened is shocking a lot of people, the fact bp didn't seem to have a game plan and whether or not they did what they should have done protectively. they didn't have a plan for this kind of eventuality. normal corporate management would indicate there should have been better emergency procedures. they're hoping this top hat deal works. are you shocked this company didn't have something better and that federal regulators have not required better protections?

    >> i think that's why president obama appropriately and our legislation also, joins to say that we need to make certain that we're not going to drill a new well in some place without a clarity to all those kinds of issues. we need to understand what happened, how it happened, why it happened and what we can do to prevent that from happening again before we drill a new well. i think the oil companies accept that. everybody wants to know how do we do this in a way that's safer. that's going to happen. but let me emphasize something, andrea . drilling is not what this bill is really all about. except to the degree we get additional supplies. this bill is a comprehensive approach that has the broadest base of support, a coalition of business people who say this is good for america's jobs. it's good for american energy and independence. good for reducing pollution. they believe this is good for american consumers because this bill particularly cushions the consumer against any negative impact from an increase in price is.

    >> some of the business supporters bailed pretty much at the last minute because of the amendment on offshore drilling . at least some less optimistic about the bill in the wake of the bp. i wanted to ask you about --

    >> what it is, it's not a veto, per se , it is an opportunity for a state to weigh in on what's going to happen to them. and if anybody believes you can just jam something down somebody's throat that can wipe out their fishing industry , without them having any say in it, that's really not thoughtful and how we work in this county tr.

    >> going back to the bush years and cheney task force , the papers went all the way to the supreme court , back to appeals court , but bottom line , the papers of that task force were never released. do you have any concerns that the last regulation or the light hand of regulation or something perhaps even more concerning took place during those years and that is one reason why there hasn't been better demands on the industry by halleburton, transocean?

    >> yes. the answer the plain and simply obviously yes. everybody -- i objected to the secret cheney meetings and secret cheney task force . they came up ? with a policy written by exclusively those people who are interested in the outcome. that's not the way it should work. we said so at the time and i think we paid the price for it. i want to fair here. the oil companies have stepped up on this legislation in a very responsible way and they have come to the table and negotiated in a fair and responsible way. i think the important thing here is not to spend all our time slitting throats and going backwards. it's to be as constructive as possible about how we're going to put a good energy policy in place for our countri. as i stand here today, the united states of america is giving $100 million to ahminedjad and iran in order to pay for oil. that's absurd. it doesn't make sense. and so if people want to get out from under the ahminedjad tax, the iran tax, the way to do it is by embracing the legislation and developing our energy producing ability in the united states . jobs created in the united states that stay in the united states . that's what we need.

    >> and we interviewed the general on that very subject yesterday, that it is a national security issue, would you have made it front and center. in speaking of national security , you just came from the senate floor where you escorted hamid karzai to the floor. that's unusual. we've had foreign leaders addressing joint sessions, but he's getting the red carpet . in recent months, had to go to kabul because the vice president couldn't breakthrough to him. the ambassador. ranking general.

    >> i don't think that's fair, andrea .

    >> but you as a peacemaker, you tried to bring him back in and we're seeing that the administration is trying to smooth over past disagreements with karzai, having discovered they think they can get farther with him by not embarrassing him. what have you learned in your meetings with him and in this rather interesting demonstration on the senate floor, what are the chances he can really do something about corruption and the kandahar operation with our troops there is capable of working?

    >> well, he is the president of the country and we have troops in the country putting their lives on the line. we have huge national security interests in that part of the world. it iq? vital this relationship work and that we do our best to makt work. i think the administration has done a terrific job in these last days and before, of trying to put the real issues on the table in a way that allows us to have a good conversation. we had that kind of conversation with the president today. we don't agree on everything. thr some things we're going to think can be done better, but there are a lot of things we could do better right here in washington, too. what we need to be doing is working on the ways to have the process that's going to be put in place in kandahar . i wouldn't call that specifically an operation. i think it's an ongoing process over the next months that's more than an operation, during which time we're going to work very hard to meet the target date next year where we can begin to draw troops down and transfer more responsibleties to the afghans. remember, there is a very important event coming in a few weeks called the jurga, which is where parties are going to come together and plot their own future and it's done in a very open, democratic way. i think it's going to be intriguing to see what impact that has on negotiations with the taliban and also how it might affect what happens and unfolds in kandahar .

    >> the chairman of the foreign relations committee , john kerry , in the middle of a lot of intersecting issues today. thank you. good to see you,

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