I am sure many of you have been paying attention to the debate (or lack thereof) on energy in Congress.  Well now the majority has decided to take up a bill after months of pleas from Republican members of the House.  However, this bill is designed to fail, and worse yet it increases spending and taxes.  Don’t believe it?  Here are some of the details.

Lack of Incentive: The bill allows offshore drilling, only for States that choose it, no closer than 50 miles from the coast, however it also prohibits revenue sharing of new oil and gas proceeds, thereby removing any incentive for States to “opt in” and allow drilling off their coasts. Nor does the bill offer any lawsuit protection, so companies that do search for oil will continue to be hampered with limitless litigation by environmental groups.

This bill will raise taxes: This bill raises taxes on large oil and gas companies engaged in domestic energy production by nearly $13.9 billion over 10 years, all to provide tax breaks to favored energy projects and products. The bill also limits the use of foreign tax credits on the international operations of oil and gas companies, which pushes the overall tax hike in the bill up to $17.7 billion.

Reduces revenue: The Congressional Budget Office [CBO] has estimated the government could initially receive $5 billion in additional revenue without raising taxes by opening the OCS and allowing drilling in the Arctic National Wildlife Refuge [ANWR]. Yet this bill continues to limit drilling in the OCS.  According to CBO, it reduces revenue to the Treasury by $1 billion,

New Fees for Energy Companies: The bill raises $5.8 billion by imposing new fees on certain leases that currently pay no royalties. It also imposes $1.8 billion of new fees on non-producing Gulf of Mexico leases, and requires retroactive lease payments back to 1 October 2007 on certain leases.

Higher Spending, No Deficit Reduction: The bill increases the top line for appropriated spending by $6.6 billion, so that total 2009 nonemergency discretionary spending increases by 9.3 percent over 2008. All new revenue in the bill is set aside in a reserve fund to offset future appropriated spending increases. There is no guarantee this funding will be used to reduce U.S. dependence on foreign oil.

More Earmarked Spending: The bill restructures the New York Liberty Zone Program, making it a $2-billion earmark that can be used for any transportation infrastructure project in New York City. The measure also earmarks $25 million to establish a so-called “National Energy Center of Excellence.”

New Spending for Energy Block Grants: The bill also authorizes $2.5 billion in new spending for energy related block grants, and $3.4 billion to States for transportation grants.

Exploiting the Fannie-Freddie Bailout: The bill seeks to make Fannie Mae and Freddie Mac green when the problem is they are insolvent. It directs the two financially ailing firms to develop loan products and flexible underwriting guidelines to facilitate a secondary market for energy- and location-efficient mortgages on low- and moderate-income housing. The bill also calls for Fannie and Freddie to facilitate second and junior mortgages for energy-efficiency and renewable energy improvements.

This past week in Congress, we considered a bill that that would try to sue our way to lower gas prices as well as another bill to create subsidies for only federal employees to take public transportation to work.

All I can say is are you kidding me? 

The cartoon below has a greater meaning after this week.

Today the House passed HR 2419, the Food, Conservation, and Energy Act of 2008, better known as the Farm Bill.  I was one of 106 who voted against the bill, I want to take a moment to let you know exactly what this bill does….all 673 pages of it.

Since 1933, Congress has passed some version of a Farm Bill every couple of years.  Unfortunately, all too often U.S. Farm Bills fail to consider the real needs of a responsible Agriculture policy.  The real problem impacting farmers is not persistent poverty, but rather normal yearly income fluctuations.  Below you will find several reasons why this is the wrong direction for Farm policy in America.

• This bill continues to subsidize wealthy farmers.  All farmer income tests are rejected by this farm bill and affluent will still remain eligible for permanent subsidies.  Most of these subsidies will go into large agribusiness interests.
• This Farm Bill waives the Democrat PAYGO rule, which requires any bill affecting mandatory spending or revenue to be deficit neutral. This conference agreement increases spending by $10 billion over the next decade, and $10 billion in gimmicks are also included.  Not to mention, this Farm Bill uses the spending from 2007, which allows for more spending than that of the 2008.
• The measure ignores the plight of consumers facing skyrocketing food prices by making a bad sugar program worse. Due to the current policy, sugar prices in the U.S. are twice the worldwide average and cost consumers nearly $1.8 billion last year, according to the GAO]. This Farm Bill will worsen this situation by increasing the sugar loan rate, and by creating a new sugar-to-ethanol mandate that will purchase sugar at inflated prices and sell it to ethanol producers at a substantial discount. This sweet deal for sugar producers will leave a sour taste in the mouths of American taxpayers.
• This Farm Bill creates a new, $3.8-billion Permanent Disaster Relief Program that disproportionately assists those with political clout, not real needs. This duplicates at least three existing crop insurance programs, along with other subsidy programs. This new program also creates incentives for the use of marginal lands that would otherwise not be farmed. To make matters worse, the cost of the program is likely to be double this amount due to a funding cliff that makes a “permanent” program disappear after only 5 years.
• The Farm Bill contains numerous wasteful earmarks. These include a $250-million earmark for land in Montana, an earmark that requires the USDA Forest Service to sell land to a ski resort, and a $170-million earmark for the salmon industry in San Francisco.
• The true cost of the Farm Bill is much higher than the advertised by the conferees. PAYGO gimmickry and special interest tax breaks and earmarks not contemplated within the advertized $10-billion framework push the overall cost to $23 billion over what the current Farm Bill pays for.