Friday, September 19, 2008


Many members of Congress spent a great deal of their five-week vacation twiddling their thumbs while Americans’ calls for greater domestic energy production grew to a deafening roar. As a response, the House has passed a sham bill that won’t quiet public concerns. Now, it’s the Senate’s turn, where some lawmakers have crafted a bipartisan solution called the “Gang of 10.” Unfortunately, this too contains far more bad than good policies. Like shady used-car salesmen, the Gang is attempting to use extremely limited drilling as the bait for enactment of an enormous package of ever-higher taxes and subsidies.

Though it seems to promise some additional domestic production, the Gang’s energy scheme (which now has 20 cosponsors, 10 Democrats and 10 Republicans) fails miserably to deliver on the will of two-thirds of Americans who want more petroleum exploration. Instead, it pays mere lip service to offshore drilling while rehashing the counterproductive policies of subsidizing politically favored industries and punishing others with tax hikes - ultimately raising prices for consumers.

The centerpiece of the proposal is an expansion of off-shore oil and gas drilling. That looks good on its face, but the reality doesn’t live up to the hype. First, the bill only allows four states - Georgia, North Carolina, South Carolina, and Virginia - to opt in to greater energy exploration. For the rest of the country, it cements the now-temporary offshore drilling ban into statutory law. American energy resources in waters near states like California would be under permanent lock and key.

The plan also would open up additional areas of the eastern Gulf of Mexico for energy development, but nothing within a 50-mile “buffer zone” off the four states’ shores, thereby blocking the cultivation of substantial resources. For example, the Minerals Management Service estimates that roughly 90 percent of California’s offshore resources exist within that arbitrary 50-mile limit. When you add the numbers up, it’s clear that the Gang’s proposal is not even a half-hearted attempt at more drilling - it’s a quarter-hearted attempt.

Behind the veil of token drilling, the Gang of 10 proposes piles of subsidies for so-called “alternative energy” programs, such as biofuels, further mandates for the use of “cleaner-burning vehicles” and punitive tax increases on domestic oil and gas companies precisely when America needs more production - not less.

The bill would cost an estimated $84 billion, $30 billion of which would be offset by tax increases on the oil and gas industry. A recent study by Fiscal Economics calculated that just one portion of those tax increases, repeal of a manufacturing deduction, could cost 637,000 Americans their jobs in the coming years. Meanwhile, the source of funding for the remaining $54 billion has yet to be determined, but will likely take the form of tax increases elsewhere that will only further harm the American economy and family budgets.

The last thing Americans need in today’s difficult economy is to suffer the burden of higher taxes. On closer examination, it becomes clear that the Gang of 10 proposal is merely a rehash of the same policies that have failed us so completely over the last 30 years - all with a little bit of window dressing in the form of drilling. To use a suddenly popular saying, it is an attempt to put lipstick on a pig and pass the result off as a beauty queen.

Instead of concocting ineffective political “compromises,” a better course would be to repeal the domestic exploration ban now, in its entirety, and speed leasing efforts both on- and offshore. This method would actually promise substantial supplies down the road and would not perpetuate any of the tax-and-spend proposals that have wasted so many taxpayer dollars over the past several decades.

The consensus is growing across the country: Let’s release our American energy resources from the shackles placed on them by Congress. Citizens and lawmakers alike should recognize this “compromise” for what it really is: the same old broken package wrapped up with a bipartisan bow.

Andrew Moylan is government affairs manager for the National Taxpayers Union.

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