Obama’s budget would cut subsidies to oil companies and change transport funding
With all the buzz last week about the climate plan and green spending incorporated into President Obama’s proposed budget, we almost missed a few other environmental aspects. The budget also kills funding for the Yucca Mountain nuclear waste dump, as David noted, and it cuts subsidies for Big Oil and changes how transportation funds are allocated.
Obama’s budget would raise $32 billion over 10 years by closing tax loopholes for oil companies. It would also impose a new fee on oil companies that hold non-producing leases — a so-called “use it or lose it” measure meant to push oil companies to either develop their leases or return them to the federal government. The Obama team estimates that the fee would raise $1.2 billion by 2019.
The budget also proposes a change to the way federal highway, transit, and airport improvement funds are distributed — and that’s upsetting the chairs and rankling members of congressional committees that deal with transportation.
Without wading too deep into wonk, the change would mean transportation money currently distributed through dedicated trusts would instead be allocated through the appropriations process as general revenue. These trust funds are traditionally drawn from so-called “user fees” like the gas tax and doled out specifically for maintenance of transportation infrastructure (although last year the Highway Trust went broke when people cut back on driving, and Congress had to lend it $8 billion to keep it alive).
Fourteen members of Congress — including Sens. Barbara Boxer (D-Calif.) and James Inhofe (R-Okla.), who are usually at loggerheads over environmental issues — think this could be detrimental to the funding system, possibly even leading to the loss of funds. The 14 sent a letter to Obama on Friday, urging him to change that provision.
“We have a longstanding commitment to ensuring that the user fees deposited into the Highway and Aviation Trust Funds are in fact used for their intended purposes — to rebuild our nation’s infrastructure,” wrote the members of Congress.