Democrats’ Tax Hike Sideshow Running on Empty

May 12, 2011

The Dem Plan to Raise Taxes on Energy Producers is Political Theater That Will Increase Gas Prices and Destroy Jobs

Facing pressure from Americans clamoring for action to address high gas prices, Democrats are opting instead for political theater, pushing tax hikes instead of domestic energy production. Meanwhile, gas prices are projected to cross $4/gallon and near new records:


DNC CHAIR DEBBIE WASSERMAN SCHULTZ: “Bottom the line is that we are still giving ridiculous, unacceptable subsidies to oil companies. … That’s the first step that we need to take to start to try to bring our energy costs down.” (Remarks from Rep. Debbie Wasserman Schultz, Fox News’ “Fox & Friends,” 5/6/2011)


GAS PRICES PROJECTED TO NEAR NEW RECORDS: “U.S. gasoline prices next month will come close to breaking the all-time record high price of $4.11 a gallon set three years ago, the Energy Department’s forecasting arm said on Wednesday.” (Tom Doggett, “U.S. Gas Prices to Approach Record High,” Reuters, 5/11/2011)


Leading Democrats, however, have offered no evidence that their plan, which dovetails with broad Democrat opposition to increasing American-made energy, will actually lower gas prices. And some Congressional Democrats have had enough with their party’s gas price shenanigans:


SEN. MARK BEGICH (D-AK): DEMOCRAT PLAN IS A “GIMMICK” AND DEMS NEED TO “GET SERIOUS”: ” ‘Instead of addressing the problem with specific solutions, they are going for headlines by dragging energy company executives before committees or proposing roadblock incentives for increased domestic energy consumption, some of which have been on the books for decades. Let’s stop the headline-grabbing and get serious about energy security,’ railed Begich.


” ‘This is a piece of legislation they put down without a committee process. It is a gimmick, a gimmick to get through the next week of activity, get some press out there,’ he said later, arguing that Democratic leaders were only pushing the bill for a ‘good political score’ and ‘good fodder for the newsprint.'” (Matthew Jaffe, “The Skunks at the Garden Party”: Dissenting Senate Dems Denounce Their Party’s Big Oil Bill As “a Gimmick” and “Laughable,” ABC News’ The Note, 5/11/2011)


MORE BEGICH: OBAMA IS “NOT LISTENING,” “TOSSING UP BARRIERS” INSTEAD: “It won’t decrease prices at the pump. There is a lot of talk right now about ending tax incentives for oil and gas industry, but the high profits right now of these companies are easy targets. But one thing Alaskans know, just because you have an easy target doesn’t mean it is the right thing to shoot. It won’t decrease prices at the pump for our families and small businesses. It will discourage companies, especially the independents, from domestic investment and job creation.The bureaucrats in [the Obama] administration are not listening. They are not — they are tossing up barriers in additional Alaskan oil and gas production every chance they get. Sadly, some of my colleagues in this body are not much better.” (Sen. Begich, Floor Remarks, 5/11/2011)


SEN. MARY LANDRIEU (D-LA): “IT”S LAUGHABLE”: ” ‘You ask me, ‘Can I vote for a bill like this?’ No. Not only can I not vote for it, it’s laughable,’ added Landrieu. ‘And I mean, I know we’re going to be the skunks at the garden party because for Democrats to be against this bill it’s because we coddle this industry. I don’t coddle this industry.'” (Matthew Jaffe, “The Skunks at the Garden Party”: Dissenting Senate Dems Denounce Their Party’s Big Oil Bill As “a Gimmick” and “Laughable,” ABC News’ The Note, 5/11/2011)
MORE LANDRIEU: DEM PLAN WILL DESTROY JOBS. It will not reduce gasoline prices by one penny.  I would just like to add my strong voice to urging my colleagues to read this bill, to look at it and understand the inherent unfairness in it, the lack of significant deficit reduction, and the fact that it will not, although it is being touted as, it will not reduce gasoline prices by one penny. … Will it create jobs? No. It will actually hurt job production in the United States. … Why are we singling out one sector of one energy – you know, one part of the energy industry to repeal the subsidies when it will in fact have the opposite effect of reducing gasoline prices, which even its sponsors, one of its cosponsors said publicly for us not to be fooled. This will not reduce gasoline prices. So why are we doing it? Will it create jobs? No. It will actually hurt job production in the United States.” (Sen. Landrieu, Floor Remarks, 5/11/2011)


These comments follow extensive fact-checks from independent observers that the Democrat plan to raise energy taxes will not only fail to address rising gas prices, it will destroy jobs and cause gas prices to increase even further:


CNN’s “THE SITUATION ROOM”: DEMOCRATS’ “STANDARD GAS CRISIS FARE” WOULD “NOT AFFECT GAS PRICES”: VOICE OVER: “As for the Democrats’ playbook, they want to end subsidies for oil companies. … Again, an oldie. Democrats slapping oil companies is standard gas crisis fare. … But experts say it would not affect gas prices short term.” (CNN’s “The Situation Room,” 5/9/2011)


CONGRESSIONAL RESEARCH SERVICE: DEM PLAN WOULD “MAKE OIL AND NATURAL GAS MORE EXPENSIVE,” “INCREASE FOREIGN DEPENDENCE”:“These changes, if enacted by Congress, also would reduce the tax advantage enjoyed by independent oil and natural gas companies over the major oil companies. On what would likely be a small scale, the proposals also would make oil and natural gas more expensive for U.S. consumers and likely increase foreign dependence.” (Robert Pirog, “Oil And Natural Gas Industry Tax Issues In The FY2012 Budget Proposal,” Congressional Research Service, 3/3/11)


Meanwhile, top Democrats behind the current effort claimed that they “never intended to talk about lowering prices.” What is their latest tax hike about, then? According to former Rep. Harold Ford, Jr., it’s all about “scor[ing] political points”:


SEN. CHUCK SCHUMER (D-NY): “This was never intended to talk about lowering prices.” (Remarks from Sen. Chuck Schumer, CNN, 5/11/2011)


SEN. MAX BAUCUS (D-MT): “You know, this is not going to change the price at the gasoline pump. That’s not the issue.  I don’t see that as an issue at all.”(Remarks from Sen. Max Baucus, U.S. Senate Finance Committee Hearing, 5/12/11)

SEN. MENENDEZ (D-NJ): “The bill, Democrats stressed, is not meant to reduce gas prices. ‘Nobody has made the claim that this bill is about reducing gas prices,’ Sen. Robert Menendez (D-N.J.) said.” (Andrew Restuccia, “McCaskill: Savings From Cutting Oil Tax Breaks Should Be For Deficit Reduction,” The Hill’s “E2 Wire” Blog, 5/10/2011)

DSCC FUNDRAISING OFF TAX HIKE SIDESHOW: “The Democratic Senatorial Campaign Committee is sending out a fund-raising appeal blasting GOP support for ‘corporate welfare.’ … This is a coordinated one-two punch by Senate Democrats, who control the chamber. The Senate hearing sets up the problem–and gets publicity at a time gas prices are near highs–while the small dollar donor is getting a pitch to throw in some cash–to help keep the Senate majority–at least sign an e-mail petition–bolstering the DSCC mailing list.” (Lynn Sweet, “Senate Democrats Fund-raising Off of Big Oil Tax Breaks,” Chicago Sun-Times, 5/12/2011)


FORMER REP. HAROLD FORD JR.: DEMOCRATS ARE “DEMONIZING BIG OIL TO SCORE POLITICAL POINTS”: “In the year since the Deepwater Horizon spill,the Obama administration has put in place what is effectively a permanent moratorium on deep water drilling. It stretched out the approval process for some Gulf-region drilling permits to more than nine months, lengths that former President Bill Clinton has called ‘ridiculous.’


“Then there’s tax policy. Why, when gas prices are climbing, would any elected official call for new taxes on energy? And characterizing legitimate tax credits as ‘subsidies’ or ‘loopholes’ only distracts from substantive treatment of these issues. Lawmakers misrepresent the facts when they call the manufacturing deduction known as Section 199—passed by Congress in 2004 to spur domestic job growth—a ‘subsidy’ for oil and gas firms. The truth is that all U.S. manufacturers, from software producers to filmmakers and coffee roasters, are eligible for this deduction. …


[L]et’s stop demonizing Big Oil to score political points. It does nothing to encourage the new talent, new ideas, and new entrepreneurs who are most likely to make breakthroughs in new sources of energy.” (Harold Ford, Jr., “Washington vs. Energy Security,” The Wall Street Journal, 5/11/2011)


Democrats’ continued inaction to address gas prices suggests that their public outrage is artificial. Just look to previous remarks from President Obama himself:


OBAMA IN 2008: UNDER MY PLAN…ENERGY RATES WILL NECESSARILY SKYROCKET.” “When I was asked earlier about the issue of coal, you know,under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it, whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.” (Remarks from then-Sen. Barack Obama, San Francisco Chronicle, Jan. 2008)


OBAMA: HIGH GAS PRICES NOT A PROBLEM IF “GRADUAL ADJUSTMENT”:“I think that I would have preferred a gradual adjustment. The fact that this is such a shock to American pocketbooks is not a good thing. But if we take some steps right now to help people make the adjustment, first of all by putting more money into their pockets, but also by encouraging the market to adapt to these new circumstances more quickly, particularly US automakers, then I think ultimately, we can come out of this stronger and have a more efficient energy policy than we do right now.” (Jim Geraghty, “Obama: On Gas Prices, ‘I would Have Preferred a Gradual Adjustment,'” National Review, 6/11/2008)