Blumenauer: Congress Must Seize the Moment

Posted July 22, 2010 at 4:01pm

In this time of unique political challenge and stress, we have a special moment for progress.

Even though Washington, D.C., appears to be deeply polarized on even the most basic elements — even those that in the past have been relatively noncontroversial and bipartisan — there is nonetheless some cause for hope that we can move forward.

“Green Scissors 2010” — a report highlighting government programs and subsidies that are wasteful to taxpayers, harmful to the environment and bad for consumers — covers a vast array of opportunities to cut spending and protect our limited resources. This is a path that is well-worn when it comes to the facts and is increasingly gaining credibility for the policy arguments. It is also supported by Members of Congress from the left and the right, along with a coalition of taxpayer, environmental and consumer groups.

The deficit has been growing exponentially for the past 10 years, and there is growing awareness that special federal benefits and tax subsidies to some of the largest corporations has outlived its usefulness. Now Members of Congress have a renewed impetus for environmentally oriented budget cuts.

Most important, these are areas where the factual consensus is reflected in public opinion.

Overwhelming majorities of people — regardless of political party or where they live — are skeptical and even hostile to unnecessary tax breaks for the largest oil corporations. In 2008, the top five oil companies made a combined profit of $100 billion. In 2009, ExxonMobil hit an all-time record $45.2 billion in profits, yet paid no U.S. federal income taxes. In fact, it got a $156 million tax refund.

Unlike the growing clean energy industries, oil companies have been drilling, exploring and researching for decades. Certainly they no longer need help from the American taxpayer. This is why I introduced legislation — the End Big Oil Tax Subsidies Act — to repeal $26 billion worth of tax credits, deductions and exemptions over the next five years.

These oil tax loopholes, which would provide billions of dollars for our nation’s other numerous priorities, are just one example of the outmoded, wasteful and in some cases destructive subsidies the government provides companies using federal land, oceans and resources.

Another, the 1872 Mining Law, was enacted under President Ulysses S. Grant and provides royalty-free extraction of valuable minerals from federal lands. Any cross-section of the public rejects the idea that taxpayers should continue to receive nothing in return for the $1 billion worth of minerals extracted annually from these lands, sometimes by foreign companies.

Additionally, it doesn’t take a Nobel Prize-winning economist to recognize that when we have a mandate to use ethanol in our gas formulation, we don’t need an extra tax incentive to make sure it happens and is profitable. In 2009, U.S. highway vehicles burned 139.5 billion gallons of fuel, including 10.6 billion gallons of ethanol. This ethanol displaced only 7.2 billion gallons of gasoline because of the lower energy yield from corn ethanol. We could have saved that amount of gasoline by increasing fleet fuel economy by just 1.1 miles per gallon, at no taxpayer cost. Instead, in 2010 taxpayers will pay $7.6 billion to subsidize ethanol.

Last but by no means least, 62 percent of farmers do not benefit from costly farm subsidies, which go mostly to large corporate farms that already are financially stable. This drains resources that could otherwise be used to help farmers conserve their land and protect their water. The reality is that 90 percent of government subsidies flow to only a handful of commodity crops, and ultimately these subsidies go mostly to corporate operations instead of small family farms that are facing new economic and environmental challenges. By simply reducing commodity crop subsidies by 50 percent, we could save taxpayers more than $26 billion over the next five years and actually increase help for the typical family farmer.

We have an opportunity right now for a grand bargain — one that includes not just the right and the left, but a wide array of the American public wanting to reform these outdated and harmful subsidies.

When we are working to protect the environment, revitalize the economy and help small businesses, stretch budget dollars, and reduce the federal deficit, now is the time for politicians to enact long-overdue reform. Our economy cannot afford delay, nor can our dwindling resources or ailing planet.

Rep. Earl Blumenauer (D-Ore.) is a member of the Energy Independence and Global Warming Committee.