Obama erases oil tax breaks in deficit plan

President Obama is reviving his battle to kill oil-and-gas industry tax breaks and seeking billions of dollars in other energy-related revenues as part of his wider deficit-cutting and jobs proposals.

The White House on Monday sent Congress a plan to pay for Obama’s $447 billion “American Jobs Act” and also cut the deficit by more than $3 trillion in 10 years.

Several of Obama’s energy tax proposals have sputtered in the past amid resistance from Republicans and oil-state Democrats. But they are part of a White House effort to sharpen the contrast between the president and Republicans over raising new revenues to curb the deficit.

The plan proposes raising $41 billion during the next 10 years by cutting several oil-and-gas industry deductions, such as the industry’s ability to claim the lucrative domestic manufacturing deduction, write-offs of certain drilling costs and other tax breaks.

Oil-and-gas taxes have been a political battleground on Capitol Hill, with liberal Democrats calling for the speedy elimination of the tax breaks, and Republicans and oil-state Democrats blasting the effort.
The proposal faces an uphill battle on the supercommittee, which is charged with finding between $1.2 trillion and $1.5 trillion in deficit cuts by Thanksgiving. House Speaker John BoehnerJohn Andrew Boehner4 reasons Mike Pompeo will succeed at Foggy Bottom The misunderstood reason Congress can’t get its job done GOP sees McCarthy moving up — if GOP loses the House MORE (R-Ohio) said last week that the supercommittee should not endorse proposals that result in tax increases.
“Tax increases, however, are not a viable option for the joint committee,” BoehnerJohn Andrew Boehner4 reasons Mike Pompeo will succeed at Foggy Bottom The misunderstood reason Congress can’t get its job done GOP sees McCarthy moving up — if GOP loses the House MORE said during  speech at the Economic Club of Washington. “It’s a very simple equation. Tax increases destroy jobs. And the joint committee is a jobs committee. Its mission is to reduce the deficit that is threatening job creation in our country.”
The plan also targets tax credits and deductions for the coal industry, a proposal the White House said would save $2 billion over the next decade.
In addition, Obama’s plan outlines proposals that would result in $1.6 billion in savings over the next decade at the Interior Department, according to the White House.
These proposals include imposing a $4-per-acre fee on all non-producing onshore and offshore federal oil and gas leases. The administration has advocated for the proposal, often called “use it or lose it,” for months.

Obama’s plan drew immediate attacks from the Institute for Energy Research, an industry-backed group, which criticized “discriminatory” taxes on oil-and-gas companies.

“After looking at the President’s relentless attacks on domestic energy production, it’s easy to see why the economy continues to struggle,” said Tom Pyle, the group’s president.

The plan would also reinstate lapsed taxes that fund the Superfund hazardous waste cleanup program, raising an estimated $18.7 billion over a decade.

This would include a tax of 9.7 cents per barrel on crude oil and petroleum product imports; and an excise tax on hazardous chemicals, among other provisions.

Another oil-related measure: The plan calls for eliminating ultra-deepwater oil-and-gas research and development program established by a 2005 energy law.
“These R&D activities have historically funded development of technologies that can be commercialized quickly, and are thus activities which should instead be funded by the companies that benefit from the projects,” the plan says.

Elsewhere, it would reauthorize fees on utilities to pay for the cleaning and remediation of federal uranium enrichment plants, raise $740 million by increasing fees on pesticide manufacturers and raise more money from the mining industry for cleaning abandoned mine lands, among other proposals.