Here's a new item to add to the long list of expenses that are putting our country into deficit spending: cleaning up oil spills. While we keep hearing that companies like BP are on the hook for the costs of cleanup, in truth, much of the cleanup will be paid for by the U.S. Treasury itself. As it turns out, BP and other oil companies can write off the costs of cleanup, forcing about a third of the billion dollar cleanup tab to come out of the Treasury. So, besides the normal billions of dollars that we already forego each year by giving tax breaks to some of the richest companies in the world, now we have billions more that those who spill oil into our oceans can get from our bank account even after committing one of the most heinous environmental crimes imaginable.
Thankfully, Congress is taking notice, but will it have the political will to end this ridiculous giveaway? So far, Big Oil and its allies have been all too effective at preventing any legislation whatsoever from passing in the wake of the Deepwater Horizon Spill. Today, Congressman Alcee Hastings (D-FL) introduced the "Oil Spill Tax Fairness Act" to end the practice of allowing oil companies to take tax breaks after they've caused an oil spill. The Joint Committee on Taxation estimates that the bill could save the Treasury more than a billion dollars a year by placing cleanup costs squarely on the laps of those that made the mess.
Remember, these are companies making record profits. Today, Exxon announced that it earned $41 billion in 2011, up 35% from 2010. Yet there seems to be no end in sight for the broader slate of tax gimmicks that result in billions of dollars lost to the Treasury each year. At the very least, these bad actors should pay to clean up their own messes. I have nothing against writing off business expenses, but a major oil spill is not, and never has been considered a normal "cost of doing business." Nor should it be. Killing workers, devastating marine life, including dolphins, corals and endangered sea turtles, shutting down fisheries, making people sick, and destroying the cultural fabric of coastal communities should never be considered just a cost of doing business. And companies like BP that take tremendous risks with our resources certainly should not be rewarded for doing so.
Congress and the Administration should be doing much more in response to the Gulf Spill, like imposing real safety requirements, lifting the horrendously low liability cap, ending tax handouts to oil companies, and ultimately moving us away from offshore drilling. But at the very least passing the "Oil Spill Tax Fairness Act" would be a good first step.
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