In August, environmentalists Friends of the Earth and Public Citizen partnered with climate deniers at the Heritage Foundation to produce the non-partisan Green Scissors report which outlines wasteful government subsidies totaling $380 billion over the next five years.
Separately, in August, the twelve members of the Congressional "super committee" were announced. The super committee is charged with finding at least $1.2 trillion in deficit reduction measures over 10 years.
The super committee deadline: November 23rd.
Cutting $380 billion in permanent subsidies immediately for mature industries like coal, natural gas, oil, and ethanol -- immediately gets the super committee to 25 percent of its goal.
This past June, the Senate sent a strong signal to end the main corn ethanol tax credit, known as the VEETC, and the ethanol import tariff.
Subsidies are necessary in the incubation phase, but oil is a "mature" industry; and ethanol and solar are "proven and established" industries. As industries prove and establish themselves, and then mature, subsidies should be retired. So, now it is time to end permanent federal subsidies for oil drilling and phased out for solar and wind technologies.
Luckily Governor Rick Perry, and Congressman Ron Paul have stepped up to put the end of subsidies in the national conversation. Perry announced his energy plan on October 14, entitled: "Energizing American Jobs and Security." It called for an end to subsidies.
Perry's energy plan website states: "As part of a broader tax reform strategy, I will also ask Congress to eliminate direct subsidies and tax credits that distort the energy marketplace. My plan levels the playing field."
And, according to Ron Paul, "We should start by ending subsidies for oil companies. And we should never, ever go to war to protect our perceived oil interests. If oil were allowed to rise to its natural price, there would be tremendous market incentives to find alternate sources of energy. At the same time, I can't support government 'investment' in alternative sources either, for this is not investment at all."
And Mitt Romney agreed in the October 18 Republican debate that subsidies should be pulled back.
Newt Gingrich piled on in Iowa on October 24 saying, "I don't want to pick a fight with any of my good friends who are running, but I get a little weary of people who represent oil, which has consistently had tax subsidies for its entire history, explaining that they're really not sure about these subsidies. Notice it's always these subsidies. It's never the ones down there. I notice that when Senator [Tom] Coburn [R-OK] introduced a bill that was anti-ethanol, he didn't include subsidies for gas and oil, because as an Oklahoman, that would be suicidal. So I just think we ought to have a fair playing field."
Now, getting back to the Super Committee, I have taken a random sampling of votes over recent years of each committee member to see if each supports subsidies.
My scorecard revealed a random sampling of 34 votes, with 19 for subsidies. It means that much of the time, some interest group is pushing our government officials to underwrite an energy cost whether it is a fossil fuel, or renewable energy source.
But, the other point is that our legislators are spending thousands of hours debating whether to spend money to give an unfair advantage to one energy source over another. And the fight seems to be over renewable fuels versus fossil fuels.
Shouldn't scientists figure out which fuels are safest and then turn them over to the free marketplace to determine which ones are liked by consumers?
Now that Governor Perry has insisted on the end of energy subsidies, can he take the lead over the next few weeks to get the Super Committee to immediately extract $380 billion in wasteful permanent subsidies out of the budget? I hope so - and I am with him on that.
This is no longer a left wing, right wing argument. We don't need votes on issues that are on one side of the aisle or the other. We need votes like we had on ethanol subsidies in June. We want to ask -- "is this how we want to spend our tax dollars?"
The example is in fact, the Green Scissors report. It had groups that are polar opposites like Friends of The Earth, and the Heritage Foundation to come together to agree on the end of permanent subsidies.
Their interest is not in protecting interest groups -- rather it is protecting America's budget and environmental future. If you are a Tea Party fan, you should love the level playing field and reduced budget deficit. If you are an OccupyWallStreet person then you should be happy that the permanent subsidies set up for the 1 percent are going away so that the 99 percent can participate.
Plus, as Governor Perry and Newt Gingrich have said, we need to level the playing field. The right technologies and solutions to fuel our electricity and transportation needs will win a free market society.
So, it is my hope that Governor Perry, Governor Romney, Ron Paul and others who are pushing the debate to "end permanent subsidies" push it to the super committee now. It is $380 billion that can be put to better use.
Dean Baker: Supercommittee of the One Percent Won't Even Think of Taxing Wall Street
Ethanol is the largest single recipient of federal subsidies and it is a tax incentive, not R&D.
Renewables also receive production tax credits and loan guarantees¬. On tax subsidies, in 2010, renewables received over $8.2B, coal, oil gas, nuclear combined received $4.1B, efficiency $4 B. Of the $8B for renewables¬, $5.7 B went to ethanol, only $1.5B to a production tax credit. Over the history of the DOE, nuclear is the largest recipient of R&D funds BY FAR, followed by coal and efficiency¬, renewables then oil and gas at a very distant last.
Federal subsidies per unit of energy produced ($ per megawatt hour):
Gas $0.64
Coal $0.64
Nuclear $3.14
Geothermal $12.85
Wind $56.29
Solar $775.64
http://www.nytimes.com/gwire/2011/08/01/01greenwire-energy-subsidy-battle-reignites-as-debt-deal-p-79083.html
The only thing in the story that raises an issue about the integrity of the information other than some quotes from advocates and implied bias because of the party if the requesters of the EIA analysis (these types of requests routinely come to EIA from both parties in Congress), is this unsupported sentence -- "But the terms of that report and the current GOP-requested sequel included only energy-specific benefits with a measurable budget impact, which excludes many of the oil and gas tax benefits unsuccessfully targeted this year by President Obama and many in his party."
The NYT does not provide supporting information for that claim, does not source the claim, does not interview anyone at EIA, and offers no evidence that the reporter actually read the study.
I, unlike the Times' reporter, have actually read the EIA report and you might benefit from doing so yourself, rather than relying on news stories as your source of information -- a highly questionable avenue for someone who claims to be a visionary.
CONTINUED ON NEXT POST
http://greenscissors.com/news/green-scissors-2011/
The domestic manufacturing deduction applies to all manufacturing companies domestic operations - this deduction was added during the bush administration shortly after 9/11 to help spur the economy. This has the effect of simply lowering the corporate tax rate from 35% to approx 33%.
The percentage depletion in excess of basis for non-integrated oil companies is a non cash expense that probably should be eliminated.
However, all other expenses listed in the schedule related to the oil and gas industry are normal operating costs and should be deductible. To claim that a tax deduction for operating costs - out of pocket expenditures are a subsidy is quite a misrepresentation of the facts.
Get rid of all agriculture subsidies.
Transfer Food and Food Safety programs from the Dept. of Agriculture to the Dept. of HHS and abolish the Dept. of Agriculture.
Transfer the Student Loan Program to the Dept. of Labor and abolish the Dept. of Education.
Sell the TVA and the 4 Power Administrations.
Turn over all National Forests and BLM lands to the states where they are located.
Turn over all Indian Reservations to the Native Tribes and abolish the Bureau of Indian Affairs.
Close down all our bases overseas except for a few weather stations and refueling stations for ships and planes. Bring home all our troops from Afghanistan, Germany, Italy, Japan, Korea and the more than 100 other countries where they are stationed.
Cut the Pentagon budget by 10% a year until it reaches $360 billion and cap it at that amount.
Rick Perry is a puppet to the Koch Brothers. Texans love their oil companies, even though fracking is sucking up their limited water supply. So asking Rick Perry to end subsidies to oil companies is to say the least rather naïve.
But the federal govt does a lot of good research...the DoD does amazing research. Basic scientific research (finding new markers, new and better understanding of mechanisms of disease processes) conducted at Universities is funded by the federal govt.
Pharmaceutical companies take that knowledge and screen a bunch compounds they made to determine if it may be effective in treating a condition. To get a drug to market takes at least 10 years and God knows how many dollars to bring a drug to market and 1 out 10 never see the light of day. The FDA also ensures that the drug is actually safe and better than older treatments if there is a comparison. Nothing is perfect I believe that research is very important and we all have a stake in finding treatments and cures for diseases because they can strike anyone at any time.
But the Koch brothers should lead the way in the true "unfettered capitalism" the they are asking for in society. It would be painful but would accelerate the increase in demand for renewable energy. Oil is our insulin and we are all Type I diabetics who have to have it.
I know we all have to keep DuPont and Alcoa in business....but it's time to get rid of the poison factor in our food chain.
Buy local or grow your own.