Posted on 02/13/2011 10:27:30 PM PST by Libloather
Obama's budget to call for slashing oil tax breaks, boosting clean energy
By Andrew Restuccia - 02/13/11 02:48 PM ET
President Obama is expected to call on Congress Monday to eliminate billions of dollars in oil industry tax breaks, while setting aside money for his top clean-energy policy priorities.
Obama will send his fiscal year 2012 budget request to Congress on Monday. The budget comes as Republicans are calling for massive cuts in spending, unveiling a proposal this week to fund the government through the end of this fiscal year that would cut $100 billion in spending when compared to Obama’s 2011 budget request.
Obama’s 2012 budget request will also make major budget cuts. It will freeze domestic spending for he next five years and cut the deficit by $1.1 trillion over the next decade.
Obama’s budget request will call for eliminating a series of oil industry tax breaks. The Department of Energy estimates that such a repeal will save $3.6 billion in fiscal year 2012 and a total of $46.2 billion during the next decade.
But the proposal to eliminate oil tax breaks faces major opposition in Congress. Though Democrats have thrown their support behind the proposal, Republicans have said any attempt to revoke industry tax breaks could harm the economy and result in job losses. The president has long called for cutting the tax breaks, but Congress has not been able to muster the necessary support to pass such a proposal.
While Obama’s budget will be marked by major cuts, the administration will make a series of investments in clean energy. The budget request will include more than $8 billion for clean energy programs, including money for research and development.
Obama’s budget request will outline a plan to achieve two of his major clean energy policy goals: a plan to make commercial buildings 20 percent more energy efficiency by 2020 and a plan to put 1 million electric vehicles on the road by 2015.
As part of the plan to put more electric vehicles on the road, Obama’s budget will call for giving consumers a $7,500 rebate when they purchase an electric vehicle.
The electric vehicles rebate proposal is modeled after the successful “cash-for-clunkers” program, which gave consumers rebates for exchanging older vehicles for more fuel-efficient ones. Obama will propose turning a current $7,500 tax credit, which would be redeemed on consumers’ income taxes, into a rebate, which would be received at the point of sale.
In order to reach the energy efficiency goal, Obama’s budget request will outline a proposal to provide new tax credits for energy efficient buildings and to offer local and state government incentives to streamline their building codes.
Despite the administration’s commitment to key clean-energy programs, the budget will make significant cuts at the Department of Energy.
In an overview of the department’s budget Friday, Energy Secretary Steven Chu said the budget request will call for cutting $70 million in hydrogen energy research. That is about 40 percent of the research program. The budget for the department’s Office of Fossil Energy will be cut by 45 percent or about $418 million.
“Fiscal responsibility demands shared sacrifice – it means cutting programs we would not cut in better fiscal times," Chu wrote in a blog post on the Energy Department’s website.
Meanwhile, the budget request will call for cutting a program to clean up the Great Lakes by $125 million.
The administration will also propose major cuts to a program that provides financial assistance for low-income Americans who are having trouble paying their heating bills. The budget request will propose cutting the Low Income Home Energy Assistance Program by $2.5 billion.
News of the cut to the program brought a rebuke from lawmakers this week. Rep. Edward Markey (D-Mass.) and Sen. John Kerry (D-Mass.), citing this year’s harsh winter in the Northeast, called on Obama to fully fund the program.
Never happen. Seen any stats on electric car sales? People don't buy them.
Even though The Obammunist says the feds will buy 200K Volts and offer $7.5K rebates, that has to pass Congress.
Not going to happen.
yitbos
Tax breaksare not cuts, its money that the gov’t never had in the first place
I'm for that as long as they use them for federal 'company cars', and only north of the Mason/Dixon Line.
The reduction in Federal Employees should help balance the budget...especially come winter.
Oh, /sarc...(I'm not really for pi$$ing away a dime of our money).
They will end up selling them to the government. The only entity stupid enough to buy them. Meanwhile the unions get covered. At least the criminals will be happy they can outrun the cops easier.
How stupid does this man think that we are? Thanks to the printing of money, gas prices at the pump are at an unprecedented high and likely to go up.
Then Mr. President wants to increase taxes on oil companies. Does he know what that does to the consumer at the gas station? Does he think that the oil companies will absorb the additional costs in taxes and take the increased cost out of their profits? This has never happened; profit margins are typically at 3%; no slack there.
Does he know what the increase of transportation costs will do to the economy?
Maybe $5/gallon is too low to satisfy the administration's lust to punish the citizens of the USA. Maybe they want to price of gas to go to $20/gallon.
Thanks for posting.
So, let’s connect some dots on potential scenarios:
1) Zero’s previous proposals have targeted removal of IDC credits (intangible drilling costs). This makes every well in the USA 30% less attractive in the first 3 years ... 3% less attractive over 10 years. It will have a massive impact on startup E&P companies, midsized exploration companies. Wells that are optional, based on the IRR, will be deferred until the oil and gas prices rise enough to get you past the IRR hurdle rate.
Source http://www.texasalliance.org/admin/assets/Tax_provisions_in_Obama_budget.pdf
Net on #1 => a lot less oil and gas will be drilled and produced in the US; we will import more from unstable countries who hate us.
2) Gasoline prices in Feb 2011 are the highest on record while oil is relatively flat and natural gas is declining. This does not bode well for the upcoming summer driving season. Any interruption in one of the seven critical “choke point” shipping channels could cause a severe price spike.
Sources http://www.businessinsider.com/oil-chokepoints-suez-canal-2011-1# and http://www.businessinsider.com/gas-pump-prices-have-hit-their-highest-level-ever-for-mid-february-2011-2
Net on #2 => national security issue and economic collapse issue; the US should be drilling for all it can and looking to be as self-sustaining as possible. We only keep roughly 20 days supply on hand in case oil imports are curtailed ... and the common man won’t see one drop of that.
Gas is already over $3 a gallon, <<<<<<<<<
Where I live It has reached $4 a gal - coming soon to a pump near you!!!
This would be the perfect time to increase the cost of energy.
The cost of living is much too low to please the ‘won’.
We must sacrifice even more to keep the price of arugula at a more reasonable level.
He is out to destroy our existing sources of energy and replace them with non existant sources.
The end result will be lots of people losing their jobs, energy costs riduculously high and productivity lowered.
It is intentional destruction.
His "move to the middle" is merely his repositioning the knife that he has stuck in the back of the American public. Some, mostly democrats but some republicans also, are too stupid to realize it. Or, they are in on the scam.
Obama’s estimate of saving $1.1 Trillion is total bunk. This is the guy who told us Obamacare would cut the deficit. The guy who told us that the stimulus would create 3 million new jobs and keep unemployment below 8%. This guy just lies and lies. And the media eats it up with no fact checking.
My two cents:
1. Get rid of the Department of Energy.
2. End the corporate income tax, rendering tax breaks a moot issue.
3. End corporate welfare.
4. Drill baby drill.
Revolutionary changes that end the economies of scale of oil production are fraught with unintended (?) consequences for everything from plastics and rubber to aircraft and national defense.
Attention Republicans: Gas prices are at an ALL TIME HIGH for the month of February.
Who the HELL is running your PR operation? How about getting your team out front and blasting this brain-dead economic communist for his sky-rocketing energy costs and his plans to INCREASE THEM FURTHER?!
Ya know, if Bush were in the White House, that cretin Nazi Pelozi would have already been on three networks and holding a news conference about the high price of gasoline.
I think you’re right about any Repub beating him then. But what kind of disaster will that Rep. president be facing?
Look at this:
http://republicans.appropriations.house.gov/_files/ProgramCutsFY2011ContinuingResolution.pdf
Are the Republicans in favor of cutting EPA funds?
“the feds will buy 200K Volts and offer $7.5K rebates, “
That might be the best thing Obummer could do for the economy. Imagine the Beltway traffic snarls that would materialize from this. Washington would grind to a halt.
So, ethanol subsidies are bad, but oil industry subsidies are good? Wouldn’t the correct policy be for the government not to pick winners and losers and let the marketplace sort it out?
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