House Passes Offshore Drilling Bills
The House of Representatives this week and last passed three bills to force the Obama Administration to increase offshore oil and gas production. H. R. 1229 passed by a vote of 263 to 163, with 28 Democrats voting Yes. H. R. 1230 passed last week by 266 to 149, with 33 Democrats in favor. And H. R. 1231 passed the House 243 to 179, with the support of 21 Democrats.
All three bills were sponsored by Rep. Doc Hastings (R-Wash.), Chairman of the House Natural Resources Committee. You can read brief committee summaries of what is in the bills here, here, and here.
Naturally, the White House opposes all three bills. President Obama and his top energy and environmental officials support policies to raise gasoline and electricity prices for consumers.
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Representative Steve Pearce (R-New Mexico) yesterday removed his name as a co-sponsor of H. R. 1380, which I have dubbed the T. Boone Pickens Earmark Bill. Rep. Pearce is an outstanding conservative Member of Congress, who is policy oriented and held in high regard by his colleagues, so his defection from the Boonedoggle Bandwagon is an important sign that House conservatives may be starting to rethink their support. Pearce deserves special credit because the oil and gas industry, which would benefit from the Pickens-Your-Pocket Plan, is the largest industry in his southern New Mexico district.
In response to my criticism of conservative Members of Congress for supporting H. R. 1380, which I have nicknamed the T. Boone Pickens Earmark Bill, some conservatives (in which broad category I include libertarians and advocates of free markets) have defended tax credits, even those that benefit only narrow interests. They do, after all, reduce some people’s taxes, and reducing taxes is a good thing. Some even go further and define ending tax credits as raising taxes. Some anti-tax groups thus demand that elimination of any tax credits be matched with tax cuts somewhere else.
The conservatives who make these arguments do so because they have unknowingly accepted the world view of the left. They have forgotten that the Constitution was designed to maintain a nation of citizens rather than to create a government with subjects. They ignore the essential role that the equal protection of the laws fulfils in maintaining the rights of citizens against the encroachments of government.
Tax credits (also known as “tax expenditures”) for buying or producing certain goods and services rather than other goods and services are a species of wealth re-distribution. Tax credits are a particularly obnoxious type of wealth re-distribution because the re-distribution generally flows from the politically less powerful to the politically more powerful.
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Lame Duck Session a Big Success So Far
The first week of Congress’s lame duck session has been a big success. They haven’t done anything. Senate Majority Leader Harry Reid (D-Nev.) pulled a scheduled vote to invoke cloture and proceed to S. 3815, the “Promoting Natural Gas and Electric Vehicles Act of 2010,” because he did not have the 60 votes required.
S. 3815 is known around town as the Boone Pickens Payoff Bill. Pickens told Bloomberg News this week that he thought there was a better than 50-50 chance that the bill would be enacted, so we can’t celebrate yet.
The bill would provide $4.5 billion in subsidies for natural gas vehicles and $3.5 billion in subsidies for electric vehicles plus $2 billion in loans to manufacturers of natural gas vehicles. The subsidies to purchasers would range from $8,000 to $64,000. The larger payments would be for purchasers of heavy trucks that run on natural gas.
But the Lame Ducks Will Be Back after Thanksgiving
Congress will be in recess next week for Thanksgiving and will return on November 29th. There are enough big must-do items that it still seems unlikely to me that the Senate will be able to take up Pickens’s bill or the Renewable Electricity Standard (or RES) bill, S. 3813. The RES bill is sponsored by Senator Jeff Bingaman (D-NM), the Chairman of the Energy and Natural Resources Committee, and retiring Senator Sam Brownback (R-Ks.), who has just been elected Governor of Kansas. It now has 31 co-sponsors, including three other Republicans.
The RES bill would raise electric rates in those States that haven’t yet followed the failed California model of raising rates to impoverish consumers and drive out energy-intensive industries. My guess is that it will be blocked in the Senate by Republican and Democratic Senators from those States in the Mideast and Southeast that still depend on low-cost coal and therefore still have manufacturing. On the other hand, there is an incentive for Senators from States that have already enacted their own renewable requirements to support a national standard in order to lower the competitiveness of the States that have not adopted renewable requirements.
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