A report released by the Congressional Budget Office and the Joint Committee on Taxation found that the American Power Act would reduce U.S. deficits by about $19 billion from 2011 to 2020

. While the legislation would direct spending by $732 billion over the 10 years, it would increase revenues by about $751 billion, the report found.

The American Power Act, introduced by Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.), would establish a hard price collar on carbon emissions credits that operators would have to purchase. The initial floor rate would be at $12 a ton, increasing at 3 percent over inflation annually. The ceiling would be at $25 a ton, increasing at 5 percent over inflation each year.

The legislation also includes $7 billion a year to improve the transportation infrastructure and efficiency. To address dependence on foreign oil, the bill would provide tax incentives to truck buyers and fleets for conversion to clean natural gas vehicles. The legislation would also support "efforts to create strong federal standards for greenhouse gas emissions and efficiency improvements in our vehicle fleet."

Other provisions of the bill include investments in clean coal, nuclear, and renewable energy technologies.

"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 Sens. Kerry and Lieberman. "Many of our colleagues have said they flatly oppose anything that adds a penny to the deficit, so we hope they look anew at this initiative which reduces it."

The CBO report also found that the legislation would not increase the deficit in any of the four 10-year periods following 2010 because additional revenues would outweigh direct spending.

However, if the legislation were implemented, CBO estimates it would boost discretionary spending by about $48 billion in the 10-year period. Most of this would stem from the spending of revenues from the auction of greenhouse gas and HFC allowances. Other spending would go to support federal agencies' cost to administer programs established under the bill.

The Small Business & Entrepreneurship Council, an advocacy organization, issued a release, speaking out against the proposed bill.

"As our economy continues to inch toward recovery, the last thing cash-strapped small businesses and start-up companies need is additional taxes and regulation in the form of a massive climate bill," said Karen Kerrigan, president of SBE. "What's more, the bill currently in front of this divided Senate will actually do very little to reduce greenhouse gas emissions.

"Regardless of how much money CBO says Kerry-Lieberman may save the federal government, it will end up hurting small businesses and contributing little to environmental preservation."

For a copy of the CBO's analysis, click here.