The day after House Speaker John Boehner demanded trillions in budget cuts in exchange for raising the debt ceiling, Senate Democrats offered him a small down payment Tuesday: a plan to cut $21 billion in unneeded federal subsidies to the extraordinarily profitable oil industry.
Not surprisingly, Republicans quickly labeled the proposal a tax increase and declined to provide any support, probably dooming the idea. Nonetheless, this debate, along with one in the House over expanded oil drilling, tells us a lot about GOP leaders’ real priorities, as opposed to what they say is important.
In the first quarter of 2011, the five largest multinational oil companies made nearly $36 billion in profits; they need taxpayer support like Warren Buffett needs welfare. Subsidies of this magnitude should be reserved for industries that serve a compelling national interest but are not yet profitable.
And yet Senate Republicans who say debt and deficits are their top priority want to continue funneling taxpayer dollars to companies piling up massive profits, even as Congress cuts funding for food stamps and schools.
As Sen. Claire McCaskill, D-Missouri, put it: “If we cannot end subsidies to the five biggest, most profitable corporations in the history of the planet that come from the federal taxpayer, then I don’t think anyone should take us seriously about deficit reduction.”
She’s right. No one should take them seriously.
Far more important to the GOP is rewarding wealthy campaign contributors, and over in the House of Representatives, a plan to expand oil drilling provides further evidence of that.
Just over a year after the Deepwater Horizon explosion in the Gulf of Mexico killed 11 workers and left more than 200 million gallons of crude in the ocean, Congress has not done a single thing to improve oil rig safety. Yet last week, with the help of nearly three dozen Democrats, the GOP majority passed a bill requiring the Obama administration to speed the sale of oil leases in Virginia and the Gulf of Mexico ― a process that was slowed to allow for better safety and environmental analyses. Two similar bills are waiting in the wings, one to speed decision-making on all leases and another to open up vast new areas to drilling, including the California coast.
All of this before officials have completed their wide-ranging investigation into the cause of the Gulf disaster and what might have prevented it.
High gas prices give a convenient populist patina to these proposals; “Drill, Baby, Drill” packs more punch when gas costs $4 a gallon. And yet oil market experts ― even those who support more drilling ― say any effect on prices would be negligible in the long run, and certainly not felt this summer.
This isn’t about lowering gas prices. It’s about giving campaign donors a return on their investment. A recent report by the Center for Responsive Politics showed that the 67 cosponsors of the Restarting American Offshore Leasing Now Act, the bill that passed last week, have received nearly $9 million from the oil and gas industry in their careers.
If only taxpayers had that kind of sway in Washington.
(The San Jose Mercury News, May 11)