Mandate Watch: Obama Backs Off Promise to Pass Windfall Profits Tax on Big Oil

Good news and bad news in the last day. The good news: Barack Obama has appointed a NAFTA critic, Rep. Xavier Becerra, as the next U.S. Trade Representative (more on that here). The bad news is this just off the Reuters wire:

CHICAGO/WASHINGTON (Reuters) - President-elect Barack Obama is not planning to implement a windfall profit tax on oil companies because prices have dropped below $80 a barrel, an aide said on Tuesday...

Obama, who signaled early in his campaign for the White House that he would take an active approach to oil markets as president, had planned to use the revenue from a windfall profits tax to fund a tax rebate for low- and middle-income families struggling with high energy prices.

Between this move and the move to wait to repeal the Bush tax cuts for the wealthy, it seems like the Obama team is buying into the right-wing frame that raising any taxes - even those on the richest citizens and wealthiest corporations - is bad for the economy. Of course, that frame is debunked by history. And while sure, it's OK to rack up deficits so as to spend our way out of the economic crisis, it's sorta silly to ignore the tax moves that could be implemented to limit those deficits where possible.

Oh, and one last thing - if oil prices are down and oil industry profits are truly down, what's the harm in passing a windfall profits tax? Even if you buy the right-wing nonsense about a windfall profits tax "hurting the industry" or "hurting the economy" when it is applied, if there really are no windfall profits to tax, then it won't be applied.

That's what a windfall profits tax really is - a safety valve regulation against profiteering, and one that can raise needed revenues when profiteering occurs. If there is supposedly no profiteering occurring, then what's the supposed harm? There is none even if you ignore history and believe taxing the wealthy/big corporations automatically hurts an economy. That is, unless you are ready to go down another right-wing rathole and argue that a windfall profits tax will somehow prevent energy companies from more energy exploration. But, then, if you are that far out on the fringe, then I guess your not interested in any facts whatsoever...

Comments

[allonfla]

I want to know what's going on here? The same guy, Llyod Chapman that started this rumor on Nov. 24th on Huffington Post has now posted another article saying that Obama now drops campaign promise to end contracting abuses - using the same evidence as with the windfall profits tax - it wasn't listed on the website. Here is the link from Nov. 24th : http://www.huffingtonpost.com/lloyd-chapman/corporate-giants-force-ob_b_146214.html And here is the link to article about contracting abuse: http://www.huffingtonpost.com/lloyd-chapman/obama-drops-campaign-prom_b_148524.html

[bkbigfish]

What? Ol' hopeanchange said something that would get him elected? My God..... that would make him a POLITICIAN! The horror!..........

He's a man. Just a flawed man, like the rest of us.

Oh, and what is the definition of "windfall" anyway? Still haven't heard a number put on that. If I didn't know better, I would think that it is just an arbitrary number put out so that congress can grab some money into it's greedy, insatiable bosom....... nah, that couldn't be it.

[allonfla]

http://tpmelectioncentral.talkingpointsmemo.com/2008/12/obama_spokesperson_reaffirms_c.php

[Topsailsman]

Yes, fish, windfall is not a defined number, not like pi or Plank's constant. And the fact that YOU haven't heard a number yet is of great concern to no one but you. Since the number will ultimately be based upon a defined calculation and will be applied by law or regulation, it will meet none of the definitions for the word "arbitrary". Unless your definition of arbitrary is "anything not approved by bkbigfish".

[UncommonSenz]

OK... I'll try once more to interject some sanity into the discussion.

Obama is not president. He has not held office for one day. He has not made any official policy, and everything in the above article is speculation-- nothing more. Just a guess about what will happen.

He has made cabinet picks. Since they have not yet assumed their positions, NOBODY knows how they will perform. NOBODY. Now we can all guess how they will do, but again that is just speculation. He CANNOT have betrayed his promises yet, because all we have is speculation.

But there are people here who are confusing speculation with honest criticism. Those who are saying "just wait until he takes office before we rush to judgment" are NOT saying he is above criticism, and are not saying he will not make choices that turn out badly. What we are saying is that he has a clean slate UNTIL he takes office... and projecting all of your biases into his cabinet (good or bad) is pointless speculation at this point.

I honestly don't see why people can't get that through their heads. "I don't like his cabinet picks, but we'll have to wait and see I guess" is a lot different than "Obama has turned his back on progressives and is a closet corporatis­t/clintoni­te/right-w­ing/anti-l­abor/spine­less/wall streeter". Admit what you are engaging in is rank speculation-- and nothing more.

[FearlessFreep]

Should the people praising Obama's early decisions also be ignored?

[UncommonSenz]

Yup. Both sides are just guessing... betting on hunches.

I like what I have seen. I like his picks. I like his putting stuff on you tube, setting up change.gov, vetting the applicants for his administrative positions like they were a boy asking Malia out on a date, I like what he has said about the economy, gitmo, and other policies.

But does any of that mean I should say "We've already seen the change we were promised"? Absolutely not. It is just my biases and interpretations... the track record will prove me right or wrong. So say "i like this or don't like that", but don't pretend it is anything more than a hunch.

[WorkingClass]

Well David, the election is over (congrats to Obama) and progressives are now being sent to the back of the bus. Who could have seen THAT coming? Hahahaha. So now the fault lines within the party are being exposed. What will keep the progressives loyal now that there is nothing to fear from the Republicans? Do the corporatists even need progressive loyalty any more? Stay tuned.

[UncommonSenz]

Maybe you should allow him to actually do something before writing him off. It's an idea that is just crazy enough to work!

[scooperss]

obvama promised change and you got it. You have a different President and a different party in power.

That's change, why the griping?

[FearlessFreep]

If the different president and the different party in power don't make significant changes, is that change? Only in a superficial sense.

[Nonamnesiac]

It's obvious from Obama's appointments he believes he has a mandate to move to the right and intends to do so. He's going to back off repealing Bush's tax cuts to the rich too. I'll also be interested in how vigorously he fights for the Employee Free Trade Act. He may only go through the motions.

His appointments of warmongerers and voodoo economics practitioners who enriched themselves by moving voodoo economics/­Reaganomic­s/Rubinomi­cs (deregulation, privatization, unbridled free trade, etc.) to cause the greatest transfer of wealth from the poor and middle class to the extremely wealthy and themselves show the only change that happened is to Obama. He's morphed from what he never was (most liberal Congressperson) to a mix of Bill Clinton, HW and W with a strong genetic transfusion from Alan Greenspan before Greenspan renounced deregulation 20+ years too late. He has to do some Keysian infrastructure spending, but will probably be at levels much less than necessary.

Obama's despicable appointments in national security, international relations and economics profoundly reject his promises for change and the whole direction his campaign promised. Even Dr. Susan Rice supported the Iraq invasion according to the Nation, and she's supposed to be a progressive.

What a disappointment.

[UncommonSenz]

Yeah- let's not judge them on what they actually do... let's just pour all of our asinine talking point biases into them, not give them even one day in office to try anything and rush to judgment with nothing more than rank speculation and then just write them all off!!!!

It is so nice not to have to actually examine actual progress and see if it lives up to the promises or not. Hey, maybe we could do that with sports to. No need to actually play any of the games, just look at the rosters and project the winner. Maybe we could do that for trials as well... just convict someone because the case looks pretty good.

That will make things SO much easier- and require none of that pesky reason or logic that can trip us up!

[Nonamnesiac]

I'm disappointed too, but you're just making excuses. I am judging Obama by what he does. He has picked most of his front line team. They all have records and the signals are clear. It's not an accident that McCain's supporters are saying how relieved they are. You act as if appointing this team is not doing something. He has clearly given an insight into what he intends to do and how he intends to govern.

I realize you don't want to believe that and want to rant at those who point this out. But don't personally attack us because we call a duck a duck. You may disagree with me but you needn't be sarcastic.

[godhelpusall]

The "WINDFALL PROFITS" tax should be more rightly and correctly labeled as the "GIVE BACK WHAT WAS LOOTED FROM THE POCKETS OF EVERY AMERICAN FOR THE PAST THREE YEARS" tax ---

Anybody with a bit of common sense knows that the secret agreements and plans, hatched during the early days of the Bushco coup behind closed doors by Dick Cheney and his private cartel of Big Oil CEOs, amounted to a coordinated conspiracy to manipulate and control the price of oil and gas, with a view to maximizing "profits" (aka PROFITEERING) ---

Big Oil's complicity in the manipulation and price gouging at the pumps is nothing less than a massive case of HIGHWAY ROBBERY and the American people deserve to have what was stolen from them returned, while the Bushco/Che­ney/Big-Oi­l cartel is held accountable for their greedy, illegal and unconscionable assault on the pocketbooks of millions of hardworking Americans ---

[mjt218]

Is there any existing evidence to back up any of your claims? How can it be common sense if it's all speculation and assignment of guilt by association?

[Sharke]

Big business does not pay taxes. Consumers pay their taxes for them.

To a business, taxes are just another cost of production. When production costs rise, businesses raise consumer prices in response. To anyone who doesn't believe this: what happened a few months ago when fuel prices went through the roof? Consumer prices rose. Everyday essentials like groceries went up in price. When the price of groceries goes up, the poor are hit the hardest.

Big business is responsible for a large part of our general prosperity. This is because large operations benefit from economies of scale. Even poor families in capitalist countries have things like TV's, DVD players, video games and microwaves in their homes. The relative cheapness of mass produced goods is largely what makes us so prosperous. If all of our goods were made by small businesses, we would be far less prosperous.

To "sting" big business for higher taxes is to evade reality and to view economics as a stage on which to perform morality plays about "greed" and "sharing." At the end of the day, it doesn't help the economy and it doesn't help the poor.

[ErikW65]

Why not push a tax on windfall profits even though those windfall profits no longer exist? Because every tax that is pushed through Congress expends some amount of limited political capital.

[bayside]

I wondered why gas prices came down all of a sudden when they had been sky high for 8 years. Could be , big oil heard what obama said, and lowered gas themselves. I say good for all of us, thats one less problem .. Obama can get to this later..

[vedder110]

You are clearly detached from reality. Every single President since Nixon has offered the exact same campaign rhetoric against oil dependency. If you believe what candidates say when they campaign, we would have been off oil twenty years ago.

Secondly, high oil prices were not caused by "greedy oil companies" looking to fleece the public. They were caused by basic economic factors: increased demand, inflationary US monetary policy, bubble economy, and speculation about peak oil. Decreasing oil prices are because of the deflationary effect of the bubble bursting and decreasing demand. Once we reach the bottom of this burst bubble the prices are going to skyrocket because of rampant inflation due to monetizing $8.5 trillion in bailout debt (and still growing). This whole process will not have a damn thing to due with Obama either way.

[richardmcnoggin]

I dont know what planet you were living on but gas prices only went sky high in the last two years; not eight. And isnt it interesting; Democrats have been in power the last two years. Speculators knew that Dems would push a no drill/ global warming hoax agenda thereby increasing oil price speculation. Once the high oil prices killed the economy of course everyone is dumping oil futures. ....

[UncommonSenz]

You have no idea of economics or politics.

"Democrats have been in power the last two years". No, they haven't. They did not have a filibuster-proof majority or a veto over-ride majority. So they were limited in what they could do.

And the price is not based on "speculation" of whether they would open up more leases (on top of the UNUSED ones which completely undercut your argument) that might (eventually) increase our supply by a whopping 3%. The price was based on demand and our refining capacity.

China and India have a HUGE growing middle class and are now consuming MUCH more than they did before. This has helped fuel a global demand. The oil companies refused to build any more refineries, so we can only convert so much oil into gasoline. Since demand grew, and supply was capped, prices soared.

They came down after the CREDIT CRISIS brought down global economies... one that was caused by the republican mantra of deregulation.

[enochsmoky]

Obama is a pragmatist and he is going to do what will work and what is possible. He fully understands, however much woolly headed progressives do not, that the business community is the driving force in the economy and in job creation. Expanded government is a drain on the productive side of the economy. A windfall profit tax penalizes companies that are usually in a temporary, shortage driven market that will eventually fall hard. How about a windfall profits tax on tort attorneys who have reaped billions in punitive damages for claims of debatable value?

[mostest]

Wow, Wow, if Obama said the sky was purple would you believe him? Obama is president, Yeah, Hooray! but he is a politican. He said what he had to say to get you young, emotionally and politically immature (but able to vote) voters to vote for him. It worked he is president. The article is correct Obama could still impose a windfall profit, the only thing stopping him is he won. Maybe as 2012 gets closer he will "reconsider."

BTW, the gas prices are down because the demand is down because the economies around the world are slowing down and in recession. Less people working less goods being produced less people buying less transportation costs--not necessarily in that order.

I am happy Obama win. We have a black/white president and the Clinton people are running the govt the best of both worlds.

[UncommonSenz]

"We have a black/white president and the Clinton people are running the govt the best of both worlds."

perhaps the dumbest comment on the board... and THAT is saying something.

"The article is correct Obama could still impose a windfall profit" [tax]

Yes... AFTER he became president, he could.

[allonfla]

The same guy, Llyod Chapman that started this rumor on Nov. 24th on Huffington Post has now posted another article saying that Obama now drops campaign promise to end contracting abuses - using the same evidence as with the windfall profits tax - it wasn't listed on the website. Here is the link from Nov. 24th : http://www.huffingtonpost.com/lloyd-chapman/corporate-giants-force-ob_b_146214.html And here is the link to article about contracting abuse: http://www.huffingtonpost.com/lloyd-chapman/obama-drops-campaign-prom_b_148524.html

[luvangelHussein330]

PSS
It does look to me like there are alot of people posting here so stuck in thier ideologies that they can't see reality and what is going oright now as well as how governing and politicing works....so much so that the minute you hear from something diffrent then what you had planned you hit the roof.

[UncommonSenz]

" ProudLiberalDan" and others...

I will put this as simply as I can. HE has not taken office. Every criticism you have is based on what YOU THINK he will do... it is all crafted in your head, and there is nothing to base it on yet. Maybe you will be right and he will do badly. Maybe my hunch is right and he will do admirably. But both cases are SPECULATION, and nothing more. and speculation is not criticism. You criticize on facts.

And to clarify, what I did was say that claiming it is patriotic to speculate was stupid. I did not say it was unpatriotic- like Rove does... I said blind speculation was not patriotic. A fish is also not patriotic (but I wouldn't say a fish is "unpatriotic" as you implied I said about speculation- just that neither is necessarily patriotic). Criticism... you remember, actually judging someone's ACTIONS, of public officials is very patriotic. Trying to claim i did not say that (or do not believe that) is a lie.

The bottom line is that there will be those who condemn him before he sets foot in the office, and those who have the reason to wait and see what happens BEFORE we criticize.

That's it. Not a real complex point, but so many posters here (and the author) just can't do that. Make of that whatever you will.

[luvangelHussein330]

*sigh*
AMEN!!!
no matter what side your on there will be people who see what they want to see...let them be fools and set thier hair on fire over hear-say. I myself will wait until he is in office and has actually announced his policies before there is anything to harp over if at all which I'm sure when he does there won't be much.

[ProudLiberalDan]

Keep saying that until you are blue in the face, but it doesn't make it any more true. Whether Obama is in office yet or not does not mean he isn't already making decisions and taking actions about his Presidency.

However, I am not even putting Obama down. All I have said is that he the person he said he was in the campaign, picking the kind of people he said he would pick, and pursuing the style and substance he said he would pursue. How is that a criticism? It wasn't what I was hoping for as a lefty, but I'm feeling betrayed because I didn't expect more.

The only ones I have criticized are fellow lefties who projected qualities onto Obama's blank slate just because his name wasn't Clinton and he is a good orator. His weak, non-universal health care policy should have told progressives everything they needed to know. Whatever. Nany on the left went with their heart and not with their head. There was no candidate of the left past the New Hampshire primary. Contrary to GOP fear-mongering, the Democratic primary race was between two DLC Democrats with different styles.

Some Obama worshipers will try to shout down any independent thought or critical thinking, but if they cannot even handle my non-criticism of Obama, they are in for a LONG, emotionally unstable 8 years.

Please take a deep breath. I'm the calm and rational one here.

[UncommonSenz]

Calm yes.. rational no.

"Some Obama worshipers will try to shout down any independent thought or critical thinking"

No, asking you to wait to have a track record before you judge is rational.

Declaring that his administration is already a "DLC democrat" or that he "betrayed" anything is nothing more than idle speculation. Just your projection of what you want to see. And trying to say it is "critical thinking" is loopy.

[WorkingClass]

Guess what. Everybody already knows that Obama has not yet taken office. Every other post points this out very clearly.

[luvangelHussein330]

PS I'm soooo sick and tired of the moaning and groaning and Obama has yet to even step into office and right now cannot even make policy for any of you to moan and complain about. Right now the most important thing Obama is doing is building bridges and alliences and being oepn to ideas so that right on day one he can hit the ground running. He isn't going to be successful by being partisan and making enemies. The state that our nation is in we cannot afford to have people bickering and fighting.
Progressives and Liberals on the far right (including me) are thier own worst enemies. You can't expect him to go in like gangbusters...let Obama do what he needs to do to get us where we need to go. there have been plenty of desicons Obama has made that those of us on the right moaned and groaned about that turned out to be genious.

[luvangelHussein330]

Pathetic...everyone is getting thier hair caught on fire over hear-say from some unnamed "Aide". The smart thing to do would be to wait until Obama is in office and is able to make policy and it's coming from his mouth not some random unnamed person before we need to get up set or try to hold Obama to task, tear him apart or claim betrayal...phleeze. If you want to look like a fool and cream and hollar based off of nothing set in stone and hear-say then look like a fool on your own. I'm going to sit back wait for the words to come from the President himself when he is actualy the President.
i think the author of this post would better serve readers by looking into what Bush is actualy doing now (not speculation) that would hender our next administration from doing what it needed to do to get us back on track.

[Yermammy]

I tell you what. I'll be reasonable when I see that everything he SAID he will do he WILL do. It seems people are getting pretty "used to" (ie. brainwashed) thinking that campaign promises can be "walked back" on, or "nuanced". I don't hanker to being flat out lied to, and I'm not accepting that lying during the campaign is somehow du rigeur. I voted for this man. I believed in him before a lot of these johnny come lately's did, but you best believe I'm not taking any backtracking on crucial reasons I voted for him in the first place. I aim to put this liar sitting in the White House, right now, in the hoosegow and I won't hesitate to do the same to the one coming in, either. Seems to me, maybe, pulling the civics classes was a planned move, because nobody, now, seems to be outraged about anything. HERE, anyway. We'll see how Barack handles the truth. We'll just see.

[scooperss]

Do I ever agree with you on the "I don't hanker to being flat out lied to, and I'm not accepting that lying during the campaign is somehow du rigeur. "

When you start expecting lies as part of a campaign and to be expected, who do you end up with in the end?

A liar that's who.

And that isn't why I vote. I vote for the most honest, not the best liar.

[allonfla]

When will you guys learn? http://tpmelectioncentral.talkingpointsmemo.com/2008/12/obama_spokesperson_reaffirms_c.php