Although everyone from President Barack Obama to House Speaker John Boehner has lamented the negative impact of the $85 billion budget sequestration, at least two major Washington figures are thrilled about the severe cuts. For Charles and David Koch, the sequester accomplishes the goal that motivated the billionaire brothers to help launch the Tea Party movement in 2010: weakening the federal government. And now that the cuts have begun to take effect, the Koch brothers are reveling in their success.
Americans for Prosperity, the right-wing dark money group founded by the Koch brothers in 2004, sent out an email to supporters over the weekend claiming credit for sequestration. The email, from AFP President Tim Phillips, claims, “While Speaker Boehner and the GOP deserve credit and thanks for taking a gutsy stand, it’s important to realize what an incredible impact AFP activists like you” have had in convincing Congress to slash the federal budget across the board.
“These combined efforts helped spread a message across the country that enabled House Republicans to take heart and do the right thing knowing that conservatives had their back,” Phillips continues. His full letter, which also brags that USA Today “recognized the effectiveness of AFP activists and gave us the opportunity to articulate the importance of sequester cuts,” can be read here.
The Koch brothers are also taking to the airwaves to keep up the pressure for even more cuts. Public Notice, to which Charles and David Koch donated $8 million between 2009 and 2011, released a new ad Tuesday minimizing the impact of the sequester — and encouraging the government to make even deeper cuts.
“President Obama calls sequestration a ‘meat cleaver’ that will ‘eviscerate’ government services,” the ad’s narrator ominously charges. “What is sequestration? A three-percent cut in government spending. Three cents out of every dollar the government spends. We’re more than $16 trillion in debt, and the government wastes billions each year on duplicate programs.”
“Americans have made tough choices and cut back. Washington refuses,” the ad concludes. “Call Washington and ask them why it’s so hard to cut spending.”
The ad — which ignores the fact that government spending under President Barack Obama has grown at a slower rate than it did under any president since Dwight Eisenhower was president in the 1950s — will reportedly run until March 15.
Charles and David Koch’s enthusiasm for the sequester isn’t hard to understand. Although the cuts will have a devastating effect on society’s most vulnerable, they will likely boost Koch Industries’ bottom line. The budget sequester is expected to hamstring the Environmental Protection Agency’s regulatory efforts, and Energy Secretary Stephen Chu has warned that “under sequestration, funding reductions would decelerate the nation’s transition into a clean energy economy.” Both outcomes would seem to be very good news for the oil billionaires.
By: Henry Decker, The National Memo, March 5, 2013
Just when you think you’ve heard it all from the fossil fuel industry, along comes American Petroleum Institute (API) chief executive Jack Gerard actually claiming on Tuesday that “the oil and gas industry gets no subsidies, zero, nothing.”
Gerard went on to argue that “we get cost-recovery benefits, much like other industries. You can go down the road of allowing economic activity, generating hundreds of billions to the government, or you can take the alternative route by trying to extract new revenue from industry by increasing their cost to do business. We not only pay our fair share, we pay more than our fair share.”
President Obama has proposed eliminating the $4 billion a year in subsidies and tax breaks to an industry that exceeded $100 billion in profits last year. These tax breaks for the oil and gas industry go all the way back to the 1920s and many argue should not be given to such a mature industry, and instead should be redirected to clean energy technologies of the future.
In addition to the $4 billion annual tax breaks, ThinkProgress reports that ExxonMobil, Chevron, and ConocoPhillips pay well below the corporate tax rate of 35 percent, with ExxonMobil paying only a 13 percent tax rate in 2011.
Washington, D.C.-based API is the the largest U.S. trade association for the oil and gas industry and claims to represent 400 companies. API spent $8.6 million on lobbying in 2011 and in last year’s election cycle spent heavily on funding groups running political ads against Democrats and in support of Republicans.
Gerard, who is close to fellow Mormon Mitt Romney and would have wielded enormous influence in a Romney administration, epitomizes the Republican “drill, baby, drill” attitude that ignores the environmental, public health and climate consequences of pumping all that carbon into the atmosphere. With his latest comments, he is ignoring America’s long history of subsidizing Big Oil.
While Gerard, whose salary was $6.4 million in 2010, disengenously states that Big Oil doesn’t receive subsidies, API actually ran ads two years ago against the Obama administration’s proposal to end tax subsidies for the oil and gas industry.
By: Josh Marks, The National Memo, January 10, 2013
“Not So Hidden”: As If Republicans Didn’t Know, President Obama’s Second-Term Agenda Is Pretty Clear
Everywhere you turn, President Obama is accused of not offering a clear second-term agenda. It’s not surprising that Republicans say it, but you also hear it from quarters sympathetic to the president.
But how true is the charge?
The president does lack a crisp, here’s-my-plan set of sound bites. What’s less obvious is whether this should matter to anyone. Mitt Romney’s five-point plan sounds good but is quite vague and, upon inspection, looks rather like five-point plans issued by earlier Republican presidential candidates. Moreover, Romney has been resolutely unspecific about his tax plans, leading to the understandable suspicion that he’s hiding something politically unsavory, either in the popular deductions he’d have to slash or in the programs he’d have to get rid of.
Obama, by contrast, has been far more straightforward about what he would do about the deficit: He wants a budget deal that includes both spending cuts and tax increases. He has put forward rather detailed deficit-reduction proposals. The centerpiece is a plan that, when combined with cuts made in 2011, would reduce the deficit by $3.8 trillion over a decade, according to the Center on Budget and Policy Priorities. Obama keeps insisting (rightly) that no deal can work without new revenue, and he is upfront that he’d begin by raising taxes on Americans earning over $250,000 a year.
Some deficit hawks argue that Obama’s tax increases are not broad enough. Others are looking for steeper Medicare and Social Security cuts than Obama is willing to endorse. Many progressives, in turn, want fewer cuts and favor additional tax increases on the very wealthy. Before signing off on deeper program reductions, progressives should consider the efforts of Rep. Jan Schakowsky, D-Ill., to counter all the proposals to cut tax rates. She has suggested five new, higher rates on incomes ranging from $1 million to $1 billion or more a year. The capital gains tax also needs to rise. Low levies on capital gains, the reason Romney paid so little tax on his $20.9 million income, raise problems for both fiscal balance and equity.
But these are responses to what Obama has proposed. To disagree with some of Obama’s specifics is to acknowledge that the specifics exist.
Some dismiss what an Obama second term might achieve by claiming that it will be mainly concerned with consolidating his first-term accomplishments. If these had been trivial, that might be a legitimate criticism. But does anyone seriously believe that implementing a massive new health insurance program that will cover an additional 30 million Americans is unimportant? Can anyone argue that translating the Dodd-Frank Wall Street reforms into workable regulations is a minor undertaking?
The president has also been clear that he wants to take on immigration reform. The question always asked is: Why should we think he’ll do it in a second term when he didn’t do it in the first? The answer is that if Obama is reelected, it will be in no small part because he overwhelms Romney among Latino voters who have stoutly rejected the Republican’s “self-deportation” ideas. It’s possible that Republicans will cooperate on immigration reform simply because they don’t want to keep losing elections by getting clobbered in Latino precincts. And Obama will know that he has an electoral debt to pay.
Republicans have been relentless in attacking the clean-energy projects Obama has financed. If Obama wins, the president will have reason to say that clean energy won, too, and push ahead. And in one of the best articles on what Obama might do in a second term, the New Yorker’s Ryan Lizza observed in June that Obama’s campaign statements — to that point, at least — suggested he would like to take another shot at legislation to address climate change.
Obama speaks incessantly about upgrading the country’s infrastructure. He also stresses the urgency of retooling both our education system and the way we train people for well-paying jobs. One can imagine a comprehensive education, jobs and investment program being a high priority in a second Obama term. And you can bet he will join efforts to create a new campaign financing system to check the power billionaires and corporations exercise in the world after Citizens United.
There is every reason to wish that Obama would pull all this together in a more inspiring way. Some of us would like him to be much bolder in addressing income inequality, the huge roadblocks to upward mobility, and the persistence of poverty. But is there is an Obama second-term agenda? Yes, there is.
By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, October 21, 2012
What happens when the preferences of the economic base meet the preferences of the ideological base?
Mitt Romney was in Colorado yesterday, where some people aren’t too pleased with him. This week he came out in opposition to an extension of the wind-power production tax credit (PTC), which is set to expire at the end of the year. The tax credit helps make wind power competitive and is credited with enabling the creation of thousands of jobs in manufacturing and construction. This is almost certainly not going to be a huge issue in the campaign, but it does reveal some interesting things about where Romney is vis-a-vis the Republican Party. On one side, you have the parochial economic interests of many Republican members of Congress and some very well-heeled Republican economic constituency. On the other, you have the purely knee-jerk reaction of Tea Party types to anything hippies might like. Guess where Mitt comes down?
Yesterday, the Senate Finance Committee passed an extension of the credit with bipartisan support. The PTC has support from members of Congress from both parties who have wind projects in their states, and a number of prominent Republicans like Chuck Grassley have urged Romney to change his position. There are thousands of jobs at stake; as Phyllis Cuttino of the Pew Clean Energey Program writes, “This uncertainty has put off investors and led to boom-and-bust cycles in the industry: Wind installations have declined by 73 to 93 percent in years without a PTC. Because of the long timelines (wind projects can take nine to 16 months from groundbreaking to power generation), investors seeking new wind projects must look two to three years into the future to decide whether the costs and benefits warrant investment. As we’ve seen in the past, investors are wary of supporting new projects if the availability of the tax credit is uncertain.” That brings up a peculiar footnote to this issue: Some of the biggest beneficiaries of this tax break are banks like Goldman Sachs, which is investing heavily in clean energy and so has a substantial stake in the PTC being renewed.
But when the issue came up, Mitt Romney’s spidey-sense, with which he tunes into every whim and grunt from Republican-base voters, began to tingle. Let’s dispense with the idea that anyone on either side has a principled position on these kind of tax credits that they hold to irrespective of the activity that the tax credit supports. In the case of liberals, there’s no hypocrisy involved: We’ll freely admit that there are some things government should support, and in a case like renewable energy, some of these industries need a boost in their early stages in order to become competitive. Part of government’s job is to create the conditions where the market can operate freely, efficiently, and justly. All of us (well, most of us) would agree that if we got all our energy from renewables and that energy was affordable, that would be better than our current situation, in which most of our energy comes from sources that have substantial environmental costs in both their extraction and their use. The question is what we’re willing to do in order to approach that better world, and liberals believe that some tax credits for renewables are a perfectly reasonable part of the price. We also assume that these tax credits are finite and that as the industry matures they can be phased out.
Conservatives, on the other hand, claim that they believe in the free market and that industries should rise or fall on their own merits without any help from government. But in practice, their opinions on particular cases show no adherence to this principle they allegedly hold. Instead, they favor tax credits for industries they like for one reason or another and oppose them for industries they don’t like. In the past few years, opinions on energy have become one more culture-war marker for conservatives, with people gleefully chanting “Drill baby drill!” at Republican rallies and leaders like Rush Limbaugh waging holy war against electric cars, for no particular reason other than liberals like renewable energy, and they hate liberals. So Mitt Romney is perfectly happy to maintain subsidies for the oil industry but opposes subsidies for the wind-power industry. There isn’t some fundamental principle about the relationship of industry and government at work here. He’s just channeling the opinions of his party, as always.
For a long time, it seemed that whenever there was a direct conflict between the preferences of the GOP’s economic base and its grassroots ideological base, preference went to the economic base. Those conflicts were rare—part of the great trick the economic base pulled was convincing the grassroots base that if Jesus returned tomorrow, he’d favor cutting the capital gains tax. I doubt Romney feels particularly strongly about this. But his default impulse, at least for the moment, is to do whatever he thinks the most extreme Tea Partier would prefer. As I said yesterday, it’s almost as though he doesn’t realize the primaries are over.
By: Paul Waldman, Contributing Editor, The American Prospect, August 3, 2012
As they ruminate at the pump, Americans may have finally figured out the new global deal on gasoline: there’s no magic bullet to bring prices down as long as the United States remains hooked on oil.
No matter how many billions of dollars oil companies rake in, the world market, not individual oil producers, sets the price of oil. Likewise, there is little, if anything, U.S. presidents—or their political opponents—can do to ward off $4 per gallon gasoline.
The reality is that oil supply concerns in Iran, Nigeria, and other trouble spots married with heightened oil demand in China, India, and other burgeoning nations will largely determine what Americans pay for gasoline. We can drill doggedly in our own backyards, but the price of gasoline will remain more a matter of speculation over externally-driven factors than tapping new sources of oil at home.
America is at an oil crossroads, emotionally and financially. We can continue griping about gasoline and maintain false hopes of controlling crude oil prices. Or we can face the truth, stop subsidizing oil with hard-earned taxpayer dollars, and abandon extreme efforts in search of new oil supplies. Surviving $4 gasoline depends on sipping oil and providing fuel substitutes, not subsidizing and promoting petroleum production.
As the world’s largest oil consumer, home to a transportation system that is a whopping 94 percent dependent on oil, the United States is precariously positioned. Conventional thinking—the more we drill at home, the better off we’ll be—is dangerously misguided. No matter where in the world oil is found, the price is tied to the global market.
Moreover, much of the heavier new oil supplies found in the western hemisphere yield diesel and fuel oil that is destined primarily for export markets. New heavier oils are not well suited for consumption by American cars and jets. So drilling closer to home will do much more to pad the oil industry’s deep pockets than bring down prices at the pump.
Since business-as-usual isn’t likely the answer, and may make matters worse, it’s time for unconventional thinking.
America is desperately in need of an oil policy that reduces dependence on petroleum, regardless of the source. The more fuel efficient our cars become and the faster we diversify into new transportation fuels, the brighter our energy and economic future will be.
President Obama already set in motion the first part of the solution. Tomorrow’s cars and trucks will consume less fuel than those they replace. And despite rising gas prices—or perhaps because of it—automakers’ new vehicle line-ups contain some of the most fuel-efficient vehicles in industry history.
In the next five years, new cars and trucks will use 20 percent less fuel per mile driven. And by 2025, new cars will average about 50 miles per gallon, nearly double levels initially mandated for 1985. Sticking to the president’s plan, or even accelerating it, will be key.
But there is much more to be done. America can no longer rely on oil alone to fuel mobility. We need to step up the transition to oil alternatives by moving to hybrid-electric and electric vehicles, and using advanced biofuels.
Electricity can be generated by a diverse array of clean energy sources, leaving oil out of the power mix. And biofuels can be made from many different nonoil sources, including algae, grasses, woody crops, wastes, and various other nonfood feed stocks.
High gasoline prices help motivate the shift away from oil. But a market transformation will take direct policy action, for example, through a price stabilizing oil security fee or other fiscal measures. Oil is entrenched in America. Moving away from perpetual oil dependence to a robust, diversified fuel system will take clear, enduring policy action.
Americans are justifiably anxious about what the future holds when it comes to gasoline prices. But many motorists are beginning to appreciate that anger over pump prices will not relieve pain at the pump. Nor will political promises.
Oil markets have globalized to the point where prices are beyond our control. Given oil’s dangerous monopoly power over our mobility, it’s time to entirely reinvent our habits, innovate technologically, and adopt bold new policies aimed at reducing the use of oil and substituting instead of subsidizing and searching for oil. This is how America will ultimately survive $4 gasoline.
By: Deborah Gordon, U. S. News and World Report, March 22, 2012