Dems' tax extenders deal boosts oil spill trust fund

deal struck between House and Senate Democrats on a wide-ranging tax package would make more money available from a federal oil-spill trust fund and increase an oil industry tax that feeds the fund.

The oil deal, which embraces the thrust of a White House proposal, would raise the cap on expenditures from the Oil Spill Liability Trust Fund above the current $1 billion level. The fund is used for cleanup costs and damages.

A summary circulated by the House Ways and Means Committee Thursday says the bill would either increase or eliminate the $1 billion cap.

In addition, the Democrats’ plan would increase — by an as-yet-unstated amount — the 8 cents-per-barrel tax on the oil industry that finances the fund. The increase is aimed at ensuring the continued solvency of the fund, the summary notes.

The White House has called for increasing the tax to 9 cents this year and 10 cents beginning in 2017.

Democrats hope to steer the tax package through Congress by Memorial Day.

The effort to boost the fund is one of several Capitol Hill responses to the ongoing release of oil into the Gulf of Mexico from a damaged BP well. 

Elsewhere, Democrats are pushing to raise the cap on oil companies’ liability for offshore spill economic damages from $75 million to $10 billion. But Republicans have twice blocked those plans on the Senate floor.

BP has repeatedly said the cap will not limit its payments for the spill damages, and the company is vowing to pay all “legitimate” claims.

Cross-posted from E2-Wire.