by | ARTICLES, ECONOMY, FREEDOM, HYPOCRISY, OBAMA
This little gem came out today during the daily White House press briefing. Real Clear Politics is reporting that Ed Henry pressed Jay Carney about Obama’s vote in 2005 where he supported a bill which contained more than $2 billion in oil subsidies. This is one for which he didn’t vote “present”; he voted “yes”. Click here for the amusing video exchange.
Henry: Why did the President vote for the energy bill in 2005 as a Senator that had over $2 billion in tax breaks for the oil industry? They were making a lot of money then too.
Carney: What I can tell you Ed is that the oil and gas companies in this country are making record profits, now, in 2012. The price at the pump is very high and that is plenty of incentive for these companies to continue drill, to continue to explore, to continue to develop energy sources here in the United States and abroad. There is no reason for the American taxpayer to subsidize that activity.
Henry: So why’d he vote for it?
Carney: I haven’t examined the vote, or what the prices were at the time, or the whole bill it was attached to. What I know and what the President knows is that this year, 2012, when we are seeing high prices at the pump, high prices in the international oil markets and high profits for the oil and gas companies, there is no reason to continue these kinds of subsidies. Take that argument to the people, I don’t think they’ll go along with it.
In previous writings, I’ve noted how politicians decry oil’s “record-profits” — but coincidentally forget to mention how much money the oil companies have invested just to earn said profits.
Interestingly, just today, the Senate only reached 51 (out of 60) votes on a measure that would have ended the subsidies. The vote was 51-47. Even the Democrats don’t want to end them. They’d rather to pander to their base by “regulating” oil profits (H.R. 3784) by imposing a profit “windfall tax”.
I can’t wait (and wait and wait) to hear President Obama’s explanation on his 2005 vote….
by | ARTICLES, ECONOMY, OBAMA, POLITICS
Today, just like he stated in 2008, Energy Secretary Chu
admitted to a House committee that the administration is not interested in lowering gas prices.
Chu, along with the Obama administration, regards the spike in gas prices as a feature rather than a bug. High gas prices provide an incentive for alternate energy technology, a priority for the White House, and a decrease in reliance on oil for energy.
David Harsayni wrote about this very conundrum five days ago. Now we better understand why Obama nixed the Keystone Pipeline project. As I mentioned earlier, a project of this magnitude moving forward has an immediate effect on the markets by changing the traders’ expectations of future supply. Having more oil available in the marketplace contributes to lower prices for consumers. So when the project was tabled, the markets reacted accordingly.
I guess the White House knows what’s best for us better than we do.
by | ARTICLES, BUSINESS, ECONOMY, HYPOCRISY
This is straight out of Ron Klain’s opinion piece on Bloomberg entitled “How to Defuse Political Peril of Surging Gas Prices”:
One idea might be a “pocketbook protection” plan, which would work as follows: If the average price of gas exceeds $4 a gallon, an additional, automatic payroll tax cut of 1 percent would kick in, as much as $50 per month, per person. The cut would stay in place for at least 90 days; it would disappear when the price fell below $4.00 per gallon.
There are three advantages to this approach. First, because the plan is of limited duration and is capped at $50 a month, its cost is relatively modest — about $5 billion a month, or $20 billion total, assuming the usual four-month gas-price surge. Second, because it isn’t a reduction in gas taxes, it doesn’t weaken any incentives for fuel conservation or efficiency: All workers get $50 to soften the blow of higher gas prices, but the less fuel they use, the more money they save. And third, the relief provides the greatest relative help to lower-income workers who need gas to commute and feel the price pinch the hardest.
Ripple Effect
Admittedly, by decoupling the tax relief from gas-tax collections, the pocketbook protection plan does give some benefit to workers who don’t drive. But any such windfall is modest, and even these non-drivers will need help dealing with the ripple effect of rising gas prices on the costs of other goods and services that are transportation-dependent.
The plan could be almost entirely paid for with a modest, no-loopholes surcharge on corporate taxes on profit derived from the higher gas prices. The administration would be able to avoid pejorative terms such as “windfall” or “excess” profit tax, because the tax is neither confiscatory nor punitive. With higher gas prices, oil companies will make record profit — and a partial surcharge will still leave that profit at record high levels. In other words, the plan isn’t vulnerable to suggestions of creeping, soak-the-rich redistribution. It would leave in place all incentives for oil companies to increase production, do more research and development, and explore alternative fuels. But a modest surcharge would help fund at least a partial pocketbook protection program to make sure the cost of the oil companies’ gain isn’t excessive pain for the rest of us.
So, instead of helping to lower gas prices via domestic oil projects like the Keystone Pipeline (which would also give jobs to Americans), one suggestion is to cut the payroll tax when gas prices are high (underfunding Social Security), and pay for it by a surcharge on corporate taxes. All in the name of “political peril”. Not economic peril — Obama’s political peril.
by | ARTICLES, ECONOMY, OBAMA
Gas prices are the highest they’ve ever been so early in the year.
There are plenty of reasons for the high prices, and lots of reasons to expect a big price surge in the spring, said Tom Kloza, chief oil analyst for Oil Price Information Service.
“Early February crude oil prices are higher than they’ve ever been on similar calendar dates through the years, and the price of crude sets the standard for gasoline prices,” Kloza said.
In addition, several refineries have been mothballed in recent months, he said, and some of those refineries “represented the key to a smooth spring transition from winter-to-spring gasoline.” The annual change in gasoline formulas is mandated by pollution-fighting regulations.
However, one overlooked fact regarding the Keystone XL Pipeline is that its rejection by President Obama has directly affected rise of gas prices in recent weeks. Although the pipeline (and ANWR, and other major oil projects) have multi-year lead times, the very fact of a project of this magnitude moving ahead has an immediate effect on the markets by changing the traders’ expectations of future supply. Having more oil available in the marketplace contributes to lower prices for consumers. So when the project was tabled, the markets reacted accordingly.
This administration has once again shown to its hostility toward domestic oil while pandering to the environmentalist electorate. The rejection of such an important project — with the capacity to offer significant work for Americans — only hurts our economy further.
Update: This video today from the WH Press Secretary regarding Keystone is pathological
Update x2: (Feb 29th) Bill Clinton says to “embrace” the Keystone Pipeline
by | ARTICLES, GOVERNMENT
It’s another egregious example of the Democrats wanting to overreach boundaries in an effort to appeal to voters:
The Democrats, worried about higher gas prices, want to set up a board that would apply a “windfall profit tax” as high as 100 percent on the sale of oil and gas, according to their legislation. The bill provides no specific guidance for how the board would determine what constitutes a reasonable profit.
The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale of oil and gas that ranges from 50 percent to 100 percent on all surplus earnings exceeding “a reasonable profit.” It would set up a Reasonable Profits Board made up of three presidential nominees that will serve three-year terms. Unlike other bills setting up advisory boards, the Reasonable Profits Board would not be made up of any nominees from Congress.
According to the bill, a windfall tax of 50 percent would be applied when the sale of oil or gas leads to a profit of between 100 percent and 102 percent of a reasonable profit. The windfall tax would jump to 75 percent when the profit is between 102 and 105 percent of a reasonable profit, and above that, the windfall tax would be 100 percent. The bill also specifies that the oil-and-gas companies, as the seller, would have to pay this tax.
Let’s go after the greedy oil companies as a cash cow to fund our politically motivated government projects:
Kucinich said these tax revenues would be used to fund alternative transportation programs when oil-and-gas prices spike
Of course, when the Left hyperventilates over the (seemingly) huge profit numbers of the oil/gas industry, they always choose not to mention the enormous amounts of monies this industry needs to invest just to produce a profit. I’ve written about this concept before when I discussed free will and capitalism.
How delicious is it that our government — unable to even produce a working budget or spend within its limits — is deemed fit to determine what a reasonable profit is.
What happened to free markets in America?
Update: Mr. Ed Morrissey adds to the discussion by explaining to folks, like I stated above, how the oil/gas industry really doesn’t make that much in profits compared to other industry giants