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Obama's Support For Unlimited Oil Spill Liability May Not Include BP: Congressman

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Congressional officials are worried that despite the White House's endorsement of unlimited liability for oil companies involved in damaging spills, a new statement of presidential policy may not actually cover the current crisis in the Gulf.

Rep. Rush Holt's (D-N.J.) office began airing concerns on Tuesday that the president's support for dropping numerical limits on the amount of economic damages paid by an oil company would not apply retroactively to BP.

The New Jersey Democrat sent a statement to the Huffington Post arguing that the government couldn't "simply take BP and other companies at their word when they say they'll cover all 'legitimate claims." Holt is introducing legislation that would codify the retroactivity of BP's unlimited liability for the current spill.

"To ensure that BP legally is responsible for every last cent of the economic damage they've caused, the Administration should support and Congress should pass liability legislation applied retroactively to the Gulf spill," he said in his statement. "Small businesses, fisheries, the tourism industry, and taxpayers deserve no less."

The White House has not actually introduced legislative language. On Monday, spokesman Ben LaBolt offered a more detailed and aggressive statement on the president's preference for oil spill liability, telling the Huffington Post that: "The president supports removing caps on liability for oil companies engaged in offshore drilling. Oil companies should have every incentive to maximize safety and arbitrary caps on liability create a disincentive to achieve that goal."

Holt, who is testifying on this issue on Wednesday before the House Committee on Transportation and Infrastructure, contends that the White House statement of policy would not legally affect BP. But in an email to the Huffington Post, LaBolt stressed that the administration would use "all means possible" to hold BP to its "commitments."

"BP has recognized its obligations to fully compensate all those bearing damages in the current oil spill," LaBolt said. "The proposed law will support that effort."

The debate, it seems, comes down to the intricacies of the actual legislative language. Holt as well as Democrats in the Senate -- specifically Byron Dorgan (D-N.D.) -- wants an absolutely airtight bill that would ensure BP's current spill is held to the new standards for economic damages liability. The White House seems to be at the same place philosophically. How that translates legislatively is unknown, in part because the president and his team aren't introducing a bill (as of yet), in part because they seem likely to support Holt's offering should it pass.

It's an interesting legal and technical debate but one that, in the end, could be moot. As the New York Times noted on Tuesday: "[I]f BP is found to have violated safety regulations, which seems likely, that cap becomes irrelevant."

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