White House spill plan would subject BP to increased liability

Legislation proposed by the Obama administration in response to the Gulf oil spill would raise the liability cap on economic damages for companies responsible for offshore disasters, and apply the new cap retroactively to BP. 

"We will aggressively pursue full compensation for damages from BP and other responsible parties," President Barack Obama's energy czar, Carol Browner, told reporters on a conference call. "We are updating the statute to address all situations and, yes, we are lifting the cap retroactively."

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Current law limits the liability of responsible companies to $75 million, but some lawmakers on Capitol Hill want to raise the ceiling to $10 billion - or perhaps more.

White House officials refused to say whether they think that level is appropriate, saying they will work with Congress to determine an acceptable cap.

Some have suggested that raising the cap retroactively to BP, which was leasing the rig, could violate a prohibition on applying laws after the fact. But Browner said the administration does not believe the measure conflicts with the Constitution. 

The rollout comes a day after executives from BP, Transocean, which owns the rig, and Halliburton, which manufactured part of the rig that failed, testified before two Senate panels probing the cause of the April 20 explosion on the Deepwater Horizon. A House panel is hearing from the same executives Wednesday. 

The $118 million measure provides immediate economic assistance to those affected by the spill and would allow the Coast Guard and other relevant federal agencies quicker access to funding. It implements beefed-up inspections for oil rigs and seafood products that come from the Gulf of Mexico, and raises by 1 cent per barrel the tax companies pay for producing oil in the U.S. 

Workers left jobless as a result of the spill and who are not typically eligible for normal unemployment benefits could receive up to 26 weeks of unemployment assistance. 

Those in affected states would also become eligible for additional nutrition assistance. The measure also provides states with resources to help provide "one-stop services" for those affected by the spill, including filing claims against BP. 

"Of primary concern to the president is the necessary assistance to the residents and individuals who have been affected by the oil spill," White House domestic policy adviser Melody Barnes said. 

The plan gives the Interior Department $29 million for stepped-up inspections of other oil rigs and would expand the time the Minerals Management Service can take to review and approve new drilling sites.

The Food and Drug Administration would receive $2 million for increased food safety inspection for seafood taken from the Gulf. The Environmental Protection Agency and the National Oceanic and Atmospheric Administration would receive $7 million combined for impact studies. 

Officials said much of the $118 million could be reimbursed by BP. 

Jeff Liebman, a top official at the Office of Management and Budget, said the White House hopes to get the measure passed in the next few weeks.

This post also appears in the Blog Briefing Room.