Climate Change Bill Will Crush Recovery for Small Businesses

Up and down the streets of Richmond, the struggle of small-business owners is apparent. Too many storefronts have closed their doors, leaving too many business owners unable to fulfill the American Dream. But with each passing day, consumers are spending more dollars on goods and services, reviving the hopes of small business. However, a climate bill under review in Congress may harm the economic recovery that millions of entrepreneurs are counting on to help their firms not only survive but grow.

The legislation, known as Waxman-Markey, would add to the cost of already expensive energy bills. According to one study, Waxman-Markey would cause gas prices to rise 58 percent. At today's rates, that would nudge gasoline back toward the $4-a-gallon mark. The trickle-down effect of this proposal would result in higher energy bills and increased operating costs for all Virginia businesses.

Similar price increases for other fuels, including diesel, would follow as well. This is bad news for a state consistently ranked by Forbes magazine as one of the tops in the nation for business. My organization also ranks Virginia in the top 10 most policy-friendly states for small business.

The cost of fuel -- whether it's natural gas, propane, gasoline, or diesel -- ranks as the second-largest financial challenge that small-business owners face. Higher energy costs translate into higher costs for doing business. Small businesses are especially sensitive to price increases, as it becomes more difficult for them remain competitive.

As small businesses across the nation struggle to keep the lights on, the federal government must find ways to lower external costs for business owners -- not heap additional burdens upon them.

Unfortunately, the pain from this misguided climate legislation doesn't end at the pump. The bill also kills jobs. One independent analysis predicts our nation would lose 2 million jobs if the House plan is enacted. In Virginia, an estimated 15,500 jobs would be wiped out by 2015, and 72,000 jobs would be lost by 2030 under Waxman-Markey.

With national unemployment looming near 10 percent, the nation's legislative efforts should be focused on job creation, not job destruction. Those efforts need to include small business. After all, it is small businesses that will lead us out of our current economic challenges.

Even the Government Accountability Office (GAO) warned that a cap-and-trade climate bill could result in great economic pain for little environmental gain. The GAO noted that climate legislation could make American companies less able to compete internationally and drive American jobs overseas to nations that do not limit greenhouse gas emissions. This would increase international emissions enough to offset or overwhelm any reductions made by the United States.

So not only does this bill hike energy prices, it kills jobs and fails to deliver major environmental improvements. It's not the type of reform we need when our economy is struggling to recover from a deep recession.

Families across Virginia who patronize local shops and markets will also feel the pain of this legislation.

Assuming a household uses 20 gallons of gasoline per week, the Congressional Budget Office estimates this climate change proposal will eat $800 away from the family budget. Under Waxman-Markey, the average Virginia household would see income fall by $640 a year in 2015, and by $1,070 a year by 2030. These are not the legislative "solutions" Virginia needs, no matter the economic climate.

If Congress fails to achieve a more balanced approach, it will put American businesses -- and American families -- closer to the edge. We need realistic thinking from our lawmakers, not ill-conceived legislation that kills jobs, hikes energy prices, and hurts small businesses across the nation.

Karen Kerrigan is president and CEO of the Small Business & Entrepreneurship Council. Contact her at kkerrigan@sbecouncil.org.