By Zack Colman - 10/01/12 05:06 PM EDT
The oil-and-gas industry would endure the largest decreases under the group’s recommendations, with coal, nuclear energy, biofuels and biomass and research and development also taking hits.
“We believe the programs listed here – whether funded through appropriations or the tax code – can be safely eliminated from the budget because they are an inefficient, ineffective, or wasteful use of taxpayer dollars,” the group said of its overall approach.
It will likely be difficult to win political support for the $2-trillion plan, which is divided equally between proposed spending cuts and tax hikes that would be tough for Republicans to swallow.
It also has $673 billion in cuts to national security, much greater than the $550 billion in cuts triggered under current law by the August 2011 debt ceiling deal. Defense hawks from both parties may find this laughable.
The group wants to eliminate various preferential tax provisions for the oil-and-gas industry, including a manufacturing tax deduction that could yield $17.2 billion in additional revenue over 10 years.
Senate Democrats, urged by President Obama, tried to kill that incentive and others in a bill that would have terminated several tax breaks for the oil-and-gas industry. That bill failed in March by a 51-47 vote, as it needed 60 to advance.
“There are a couple of basic truths about oil and gas companies today: they are highly profitable, heavily subsidized, and well‐connected in Washington,” the group said in its report. “While this scenario makes for a very lucrative business model, it continues to needlessly cost taxpayers billions.”
Advanced coal technologies should also get the budget axe, the group said. It suggested ending an industrial carbon capture and sequestration tax credit, a credit for investing in clean coal facilities and payments for the Department of Energy-sponsored FutureGen 2.0 project to retain $4 billion in revenues over a decade.
Taxpayers for Common Sense also put tax credits for biodiesel on the chopping block, which it estimated would retain $16.2 billion in revenues over 10 years.
Those credits, which are included in a Senate Finance Committee-approved $205 billion tax extenders package, give $1.01 per gallon for cellulosic biofuel production and $1 per gallon for biodiesel production.
Cellulosic biofuels are “advanced” renewable fuels made from non-edible feedstocks. They are just now starting to come online in commercial volumes, though development has taken longer than expected.
The group also said the nuclear energy industry is ready to shirk Washington’s “cradle-to-grave support.” It highlighted about $14.7 billion in potential government revenues over a 10-year period from ending tax provisions and subsidies for the industry.
— Erik Wasson contributed.