Dismissing the harsh reality that almost 8.4 million jobs have been lost during this recession (almost 5 million since January 2009) with unemployment still hovering at nearly 10 percent, the White House and congressional leaders have hit the campaign trail this summer for carefully choreographed "summer of recovery" campaign events, claiming that their government spending spree is finally leading to an economic recovery and the job creation that goes along with it.
Among these staged events, balloon drops and photo-ops, the president, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi will attempt to justify the billions of federal dollars wasted on "stimulus" and the increased government control of the health and financial sectors of the economy as the change needed to get Americans back to work.
Fortunately, despite the efforts of those in power, the United States still has an opportunity to get out of the economic doldrums - unless Democratic leadership in Washington returns from the campaign stage to enact a misguided energy agenda - increasing energy prices and killing hopes for job creation any time soon.
Prior to adjourning for the rest of the summer, Senate leaders tried and failed to marry the tragic BP oil spill to a "cap-and-trade" policy that is nothing more than a national energy tax. While they failed this time, Mr. Reid has kept the door open for a final push for carbon caps in the fall or during a postelection lame-duck session. In the meantime, Mr. Reid and the president are actively working behind the scenes to find additional ways to punish the domestic energy industry with new regulations, fees and an additional $15 billion in taxes on American oil and gas consumers to pay for yet another round of wasteful government spending.
The current Democratic approach would dramatically raise the per-barrel surcharge that oil companies contribute to the federal Oil Spill Liability Trust Fund, leading to a likely increase at the pump. Increasing taxes on Big Oil might sound like a good idea, but in the end, it will raise gasoline prices paid by consumers.
Additionally, the Democrats (led by the administration) want to change tax rules governing American oil companies that do business overseas - making them pay taxes twice on revenues from overseas operations. If these "dual capacity" tax rules are changed, they will hinder domestic energy production while providing significant advantages to foreign oil and gas companies (think China, Venezuela, BP) when competing with American energy companies. Such a change will almost certainly mean more imported oil, greater cost to energy consumers, and lower employment in the American energy industry.
Oil and gas companies directly employ roughly 2.1 million people and indirectly support more than 9 million jobs. Natural gas development alone supports nearly 3 million jobs in 49 states. That represents something in the neighborhood of $1 trillion to our national economy. Instead of imposing policies that reduce domestic energy production, the Obama administration and Congress should take steps to create more energy-related jobs. Before the Gulf spill, even the president was paying lip service to the notion of expanding access to our domestic energy resources. He would be wise to return to that path. The expansion of domestic energy exploration could create an estimated 160,000 jobs by 2030 and yield an additional $1.7 trillion in government revenues from royalties, taxes and fees. The energy agenda of the Democratic leadership would impose higher energy prices, reduce American jobs, further endanger our energy security, and hinder the ability of American oil and gas companies to effectively compete with their foreign competitors. We need a better plan.
Thomas Pyle is president of the Institute for Energy Research.
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