Oil Lobby Concerned Over Democratic Budget
The Senate has failed to pass a budget for four years. Many contend a budget doesn’t amount to more than a political document. And all voting on one does is get Senators on the record about what types of programs they’re willing to pay for.
But Representative Mike Simpson said it’s a bit more than that. The Idaho Republican is a leader on the House Appropriations Committee.
“Partly their message documents, but their also documents by which we set the appropriations bills,” he said outside the House chamber Tuesday afternoon. “If one gets passed the House and it can’t get past the Senate, as the last four years have indicated, we use that as our budgeting document on what we can put in the appropriations bills.”
After years of chiding, Republicans will get their wish to see a Democratic produced budget. That’s set to come out car insurance quotes online next week.
It’s widely expected to include tax cuts to the profitable oil and gas industry.
Jack Gerard,CEO of the American Petroleum Institute, said tax revenue from the industry is more beneficial to the government – some $86 million each day – than ending any tax breaks.
“Do you want real revenue from economic activity, or do you want to be punitive with small provisions? ” he rhetorically asked reporters on a conference call.
Gerard says the tax credits he’s looking to protect don’t cost taxpayers much – about two to four billion dollars per year.
He labeled any effort to end the industry’s tax breaks political posturing, not any real attempt to off-set spending.
“The provisions they’re talking about are designed in essence to be punitive measures against the industry,” he complained.
Eric Toder, a former deputy assistant secretary of the Treasury during the Clinton presidency, disagreed,
Toder said the industry enjoys unique tax carve outs, like one that allows large and small oil companies to expense exploration and development.
Now at the Tax Policy Center, Toder said that benefit is especially beneficial, because companies can expense initial costs over the lifetime of a well.
“Operating costs are always deductible. It’s the expensing and the development, which should be a capital expenditure,” he said.
Both of Alaska’s senators have said they do not want to single out the oil industry; they prefer comprehensive tax reform.
Senator Lisa Murkowski said tax reform is just one piece of an overall deficit reduction package.
“It looks pretty gloomy right now,” she said. “But if we’re going to be honest with how we’re dealing with our fiscal issues and the reforms that are necessary, it’s got to be reductions in spending on the discretionary, but also on the mandatory side, but also, tax reform has got to be a piece of it.”
But most in Washington seem to think, the further into this Congressional term we get, the less likely we are to see any real tax reform.