Right now a massive $70 billion tax-cut bill is working its way through the Senate.
(You will recall that Congressional Republicans split the budget bill in two, so the first bill would be pure spending cuts — thus getting them coverage in the press for "courageously" cutting spending to rein in the deficit — and the second pure tax cuts, to please all their normal constituencies. The latter being much larger than the former, the net result is a massive expansion of the deficit.)
Energy prices being what they are, Congresscritters feel pressured to Do Something. Rather than any substantive changes in energy policy — kind of blew that chance with the grotesque energy bill — they’re settling for symbolic smacks to the wrist of Big Oil.
I won’t get too far into the weeds of various proposals, since none of them will survive House-Senate conference committee and none would make a very big difference if it did. I’ll just do the bloggy thing and extract a few absurdities from the press coverage.
Here’s one from The Wall Street Journal:
[Sen. Byron] Dorgan [D-ND] acknowledged that he faces an uphill fight [on behalf of his proposed windfall tax on oil companies]. He said the debate itself would provide Democrats an opportunity to use the energy-price issue against a majority party that typically champions free-market forces.
I don’t know if these are Dorgan’s words (if so, terrible framing) or the WSJ’s, but … WTF? It is simply absurd at this stage in the game to characterize Republicans as "champions of the free market." After all, in the context of this debate, Republicans are working their tails off to protect the tax breaks and subsidies they’ve already offered the oil companies. Tax breaks and subsidies do not a free market make.
The reason they’re offering subsidies is to bribe Big Oil into investing in more refineries, to juice supply and bring prices down. Of course, Big Oil has shown no inclination to do so, and why would they? Restricted supply is part of what’s keeping prices so high and making them rich as Croesus. They’ve already more or less told Congress that the tax breaks and subsidies aren’t going to change the way they do business one whit.
So if you really think greater refinery capacity is the problem, you might think the thing to do is force oil companies to invest in them. That’s what Dorgan’s windfall tax is intended to do.
Companies could escape the proposed windfall profits tax by reinvesting their profits in expanding refinery capacity, investing in renewable energy or making other efforts to increase domestic oil and gas supplies.
Sounds like just what the Republicans want, right? Apparently not:
The idea drew immediate opposition.
“It’s wonderful to get out here and beat up on the big old oil companies,” said Sen. Orrin Hatch, R-Utah. “This populist talk is not what’s going to get us oil and gas, nor is it going to bring prices down.”
Uh, sure, the talk won’t get us that, but the tax will, right? By increasing refinery capacity? Isn’t that the whole point? But we can’t have a T-A-X, oh no.
The one thing that’s actually made it into the Senate’s version of the bill is, in effect, the repeal of a previous tax break.
But of course most Republican oppose that, too.
Cause of the free market, don’t you know.