Seriously, I’m not really sure how it’s even possible for Congress to make their bad energy policies worse, but they are. And it’s coming from all angles.
On the Senate side, the Gang of 10 energy bill includes only a very modest expansion in drilling while mandating alternative fuels and paying for it by taxing big oil.
Sure, taxing big oil companies at time when energy prices are high and their banking record profits has a fashionable appeal to it, but it actually made the situation worse in the past. Generally, when people are taxed more, they spend less. The same goes for oil companies; in the past it discouraged expansion of domestic energy supplies and led to increased oil imports. Heritage analysts also graded the Gang of 10’s nuclear proposal and it doesn’t quite pass the test.
A similar disaster is going over on the House side. A number of news headlines today read, “House Energy Bill Passes, Lifts Offshore Drilling Ban.” It sounds great, but that’s like reading a headline that says, “McDonald’s Cheeseburgers have More Protein.” There’s a lot more to it and it’s mostly all bad. As for the offshore drilling, the amount opened by this bill is extremely modest. Dan Kish, Vice President of Policy with the Institute for Energy Research said:
At best, this bill opens up 10 percent of the nation’s offshore energy potential.”
As I wrote yesterday, The House introduced new energy legislation late Monday night, and voted on the 290-page bill, which can be found here, to the floor yesterday. You think the 435 Members in the House of Representatives meticulously read all 290 pages? A bill that makes fundamental changes to thousands of pages of earlier energy bills as well as the tax code.
Pelosi’s bill also includes new tax credits and government subsidies for unproven and unsuccessful renewable energy sources. The Administration strongly opposes the bill and says that if it were presented to the President, he would readily veto it.
Speaking of new tax credits and subsidies, let’s jump back to the Senate side. Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Chuck Grassley (R-Iowa) unveiled their own egregious plan that includes:
Clean energy tax incentives totaling approximately $17 billion, paid for by freezing the tax deduction for the domestic manufacturing activities of American oil and gas companies, by tightening the rules by which oil and gas companies pay taxes on income earned overseas, by freeing general fund monies with increased payments into the oil spill liability trust fund as new drilling is considered […].”
They’re just not getting it. Taxing big oil isn’t the solution and neither is having the government pick winners and losers among alternative sources of energy. It’s up to the market to figure that out. Senior Policy Analyst Ben Lieberman says it best:
The problem with too many of Washington’s energy bills is that the only energy they contain is in the title. Fortunately, there are much better energy bills out there – ones that provide access to significant offshore oil supplies as well as incentives for states to be on board.”