Covering the Front and Back Pages of the Newspaper
June 17, 2010
POLITICS: Piggy Bank
Democrats are seeking to increase taxes on oil companies as part of their vaunted "tax extenders" legislation. The new revenue would flow into the federal government’s Oil Spill Liability Trust Fund, which was created following the 1989 Exxon Valdez crash. But the trust fund is not a "lock-box," and Democrats are effectively double-counting the revenue as (1) a source of money for the Gulf cleanup effort and (2) an offset for separate spending provisions in the tax bill. This makes the deficit impact of the legislation appear significantly smaller than it actually is.
Vitter wanted to bar the federal government from raiding the new spill-cleanup fund for other purposes, but Senate Democrats voted down his amendment. The same theme repeats withn the $20 billion that British Petroleum would have given directly to individuals and companies damaged by the Gulf oil spill, but which BP - colluding, under pressure, with the Obama Aadministration - instead handed over to the Obama White House without any safeguards to prevent it from being paid out for other purposes:
[A] government-administered fund more or less guarantees a more politicized payment process. The escrow administrator will be chosen by the White House, and as such would be influenced by the Administration's political goals. Those goals would include payments to those harmed by the Administration's own six-month deep water drilling ban. That reckless policy will soon put thousands of Gulf Coast residents out of work, but the White House knows that BP isn't liable under current law for those claims. The escrow account is an attempt to tap BP's funds by other means to pay the costs of Mr. Obama's own policy blunder.
This has been a common theme throughout this Administration: when there are pots of money to be handled - even, as in BP's case, money the company concedes should legitimately be paid out to people damaged by its actions - Obama's people want that pot under their control to hand out to those who find favor with the government. Former Obama car czar Steve Rattner is the first Obama Administration official to be sanctioned by the federal government for his involvement in trading official favors for a piece of the action, and he likely won't be the last. If you take as an article of faith that money changing hands must pass through the approval of a government functionary, you are necessarily encouraging the further corruption of government and business alike.