Bush Rejects Calls for Tax on Oil Profits

[RunByDesign]

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By JENNIFER LOVEN, Associated Press Writer
1 hour ago

WASHINGTON - President Bush said Friday that taxing enormous oil industry profits is not the way to calm Americans' anxieties about pain at the gas pump, and that his "inclination and instincts" are that major oil companies are not intentionally overcharging drivers.

Bush's remarks suggested the former Texas oilman is unlikely to take harsh action against oil companies despite public anger about the rising cost of fuel. Gasoline is averaging $2.92 a gallon across the country, up 69 cents from a year ago, according to AAA's daily fuel gauge report.

With politicians concerned the issue could tilt what are expected to be close midterm elections this fall, the president and many in Congress have been rushing to offer solutions, most of which would offer little immediate relief.

Some Democrats have viewed this week's announcement by major oil companies of huge first-quarter profits as a chance to renew their push for a windfall profits tax. But though a few Republicans, including Sen. Arlen Specter of Pennsylvania, have said the idea ought to be examined, Bush and most GOP lawmakers strongly oppose it.

"The temptation in Washington is to tax everything," the president said in a wide-ranging news conference.

Instead, Bush called on Congress to ease regulations that make it difficult to expand the nation's refining capacity. He also urged oil companies to plow their profits into finding and producing more energy, such as by building natural gas pipelines or pursuing renewable energy sources _ all ventures that could further boost the companies' bottom lines.

Three days ago, the president announced a series of steps, including calling on his administration to investigate possible price gouging. But he admitted Friday that he thinks it's probably not happening.

"I have no evidence that there's any rip-off taking place," Bush said. "It's the role of the Federal Trade Commission to assure me that my inclination and instincts is right."

The president has supported the rolling back of some oil industry tax breaks that were enacted with his support just eight months ago. That tax break recission is part of a broader gas price-relief plan offered by the Senate GOP leadership, but House Republicans signaled this week they won't go along.

Bush called reporters to the Rose Garden to trumpet recent positive economic reports. But, aware that high gas prices are one of the reasons that good news hasn't sunk in with much of the public, he acknowledged fuel costs threaten to derail economic progress _ and used a driving metaphor to make the point that tax cuts are the key to continued strength.

"With gas prices on the minds of Americans, we need to keep our foot on the pedal of this strong economy," the president said.

Iran's suspected desire to build nuclear weapons dominated the president's half-hour session with reporters, during which Bush and his two top economic advisers stood facing a blazing sun.

The International Atomic Energy Agency said Friday that Tehran had ignored the U.N. Security Council's deadline for it to stop all activities related to enriching uranium. But Iran pledged anew to continue with its nuclear program, which it insists is only for peaceful energy production, with Iranian President Mahmoud Ahmadinejad saying his nation "won't give a damn" about Security Council resolutions.

"Today's IAEA report should remind us all that the Iranian government's intransigence is not acceptable," Bush said.

The Bush administration wants the Council to impose economic or political sanctions on Iran for its defiance. But with Council members Russia and China opposing such a move, the president would not discuss sanctions.

He merely stressed that "the diplomatic process is just starting" on devising a strategy for dealing with Iran, and noted he talked earlier Friday with German Chancellor Angela Merkel, who is also due back at the White House next week. Undersecretary of State Nicholas Burns plans to meet in Paris next Tuesday with counterparts from Britain, France, Germany, China and Russia, while Secretary of State Condoleezza Rice is to confer at U.N. headquarters May 9 with those countries' foreign ministers.

Bush also declined an opportunity to be directly critical of Ahmadinejad's escalating rhetoric. Bush's aides believe Iran is digging an international hole for itself with such statements, and that it will help the U.S. case with its allies to let it do so without reciprocating.

Turning to problems at home, Bush promised his administration is using the lessons of Hurricane Katrina to prepare for June 1 start of the next hurricane season. "I feel pretty good about the coordination," he said.

Though his advisers have rejected, at least for now, abolishing FEMA as a Senate panel proposes, Bush left the door open. Of the numerous recommendations from White House and congressional inquiries, Bush said "we ought to take them all seriously. The objective is to respond to these natural disasters as well as we possibly can. ... My attitude is, let's make it work."

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[L.A. BRONCOS FAN]

Bush Rejects Calls for Tax on Oil Profits

Now that's a surprise - the Oil Puppet refuses to tax Big Oil?

[L.A. BRONCOS FAN]

Even George Bush, as ardent a defender of the oil companies as ever set foot in the Oval Office, has begun to yelp about price gouging. With his popularity down at the freezing mark, he'll say just about anything.

But he won't say "windfall profits tax," even though 80 percent of Americans are in favor of it, including 76 percent of Republicans, according to one recent poll.

Bush ruled that out in his April 25 speech. "What can the government do?" he asked. "One of the past responses by government, particularly from the party of which I am not a member, has been to have--to propose--price fixing, or increase the taxes. Those plans haven't worked." (Sounds like he's channeling W*GS here, doesn't it?)

No, we can't have that, can we? Never mind that the windfall amounted to $36 billion last year in profits to the oil companies. ExxonMobil alone made $10 billion in the final quarter of 2005. In the first quarter of 2006, it made $8.4 billion, up from the same period a year ago.

Democratic Senators Byron Dorgan and Christopher Dodd have introduced legislation to impose a 50 percent excise tax on oil profits when it is selling for more than $50 a barrel. Representative Dennis Kucinich has proposed a 100 percent tax on windfall oil profits. But not only are Republican Congressional leaders opposed to these ideas, they don't even want to strip out some of the tax benefits the oil companies have been reaping already.

"While Republican leaders sharply criticize soaring gasoline prices and energy industry profits, GOP negotiators have decided to knock out provisions in a major tax bill that would force the oil companies to pay billions of dollars more in taxes," The Washington Post reported on April 26. No surprise there. Since 2001, the oil industry has gurgled up $55 million in campaign contributions, with 81 percent going to Republicans, according to Public Citizen.

Bush talked the talk. "These energy companies don't need unnecessary tax breaks," he said. But he didn't walk the walk. All he proposed was phasing out $2 billion in tax breaks over the next ten years. This, after giving the oil companies billions of dollars in tax breaks in last year's energy bill, along with a holiday on royalty payments on oil and gas they extract from public lands.

Bush proposed several other measures that won't solve the problem of high gas prices.

First, he offered to give bigger incentives to consumers who purchase hybrid or clean-diesel vehicles, and there's nothing wrong with that.

But it won't do anything in the short term. "There is already a long waiting list to buy certain hybrid cars," Slocum notes. And it's not aimed at the people who are being most disadvantaged by high oil prices.

Bill Wineke, a columnist for the Wisconsin State Journal, put it well. "Tax credits will help people like me, but they won't help people like my son, Andy," he writes. They both drive a fair distance to work. But "the difference between us, frankly, is that I have more money. . . . I can buy a new car. Andy can't. . . . If he could afford a new car, he could afford the gasoline for his current car."

Second, Bush said the U.S. government would stop purchasing oil for the Strategic Petroleum Reserve so as to increase supplies of oil on the market. But the problem right now is not one of supply. The Department of Energy in April revealed that oil inventories in the United States were at an eight-year high. And anyway, Bush's move would account for less than half of 1 percent of U.S. oil consumption. His new-found religion on this issue is interesting, to be sure. "We will not play politics with the Strategic Petroleum Reserve," Bush said on the 2004 campaign trail. Well, what's he doing now?

Bush also seized on high gas prices to advance his anti-environmental agenda. He proposed waiving clean air rules for gasoline blends, and he insisted that oil refinery construction permits be decided on within one year's time. This will greatly diminish the ability of consumers, environmentalists, cities, and states to properly investigate the risks that such construction could bring. To top that off, Bush once again put drilling in the Arctic National Wildlife Refuge on the table, even though oil supplies are plentiful right now.

"We can gut our environment to match that of Bangladesh, and all it'll accomplish is to make our air quality poorer and our people sicker," says Slocum.

Bush and conservatives love to harp on the fact that refinery capacity is way down in this country, and they blame that on environmentalists.

But as Slocum notes, a small oil company, Arizona Clean Fuels, has managed to navigate the bureaucracy and get all the permits it needs.

If it can do this, asks Slocum, "why can't the world's most powerful corporation?" He offers an answer: "ExxonMobil has no interest in creating additional refineries because it will drive prices down."

Finally, Bush ordered the Federal Trade Commission, the Department of Justice, and the Energy Department to investigate whether the price of gas has been "unfairly manipulated." The tip-off here is the word unfairly. Because, like the Ayn Rand Institute, the Bush Administration doesn't believe there is such a thing, short of outright collusion. We should all live to see the day when the Bush-Cheney Administration hauls ExxonMobil and the other big oil companies into court. But Bush will never do it. Besides which, going after the oil companies would be hazardous to Cheney's health: He'd have his final, fatal heart attack if Bush brought indictments against them.

What Bush didn't propose is as telling as what he did. He failed to require the automakers to increase the fuel efficiency of their vehicles. The average car and truck on the road today gets only twenty-one miles to the gallon. In 1987, the average was twenty-two.

We've been going backwards. And in last year's energy bill, Bush, the Republicans, and many Democrats, too, blocked an amendment to boost fuel efficiency standards.

"President Bush continues to ignore the most obvious and practical solutions," the Sierra Club says. "The biggest single step we can take toward saving money at the gas pump, curbing global warming, and cutting America's oil dependence is to make our cars, trucks, and SUVs go farther on a gallon of gas."

We already have the technology, says the Sierra Club, "to make all new cars, SUVs, and other light trucks average forty miles per gallon within the next ten years." According to the Sierra Club, this would "save more oil than the United States currently imports from the entire Persian Gulf and could ever get out of the Arctic Refuge, combined."

Or, as Daniel A. Lahsof, science director of the Natural Resources Defense Council, puts it, "We cannot drill our way out of this crisis."

The only solution, he says, "is to use less oil. Period."

But that goes against the entire ethos of the Bush-Cheney policy, which is: Consume until we drop. Bush after 9/11 told us to go shopping. And Cheney derided conservation as a mere lifestyle choice. His energy report in the spring of 2001, where he was counseled by other energy executives, took as a given that the United States would be as dependent on foreign oil in twenty years as it was then. The Cheney solution was to make sure the United States had better relations with foreign oil producing nations, and to have the oil companies essentially act as U.S. ambassadors.

Since then, Cheney and Bush have wheeled out another tactic: war. They invaded Iraq, with the second biggest oil supplies, and now they're threatening Iran, another top ten oil supplier.

In fact, the instability of Iraq and the belligerent threats toward Iran have done a lot in themselves to push oil prices up.

"The Iranian situation obviously causes markets to--creates angst in the marketplace, and the result of which is higher prices," said Al Hubbard, Bush's director of the National Economic Council, on April 25.

What we're seeing at the pumps is part of the bill for Bush's reckless militarism.

Ultimately, to solve the problem of oil we need to solve the problem of empire.

We cannot keep consuming 25 percent of world's oil when we have 2 percent of the world's oil supply and 5 percent of its population.

We cannot keep invading and bombing countries that have the oil we're addicted to. (Bush, in his April 25 speech, acknowledged that "some of the nations we rely on for oil have unstable governments, or agendas that are hostile to the United States.")

We cannot keep imposing an economic policy on the rest of the world that is designed for the oil industry and other private companies.

They are the ones that benefit the most from the empire.

They are the ones that now, more than ever, run the empire.

We need to get over the illusion of the self-regulating market and the sovereign consumer.

We need to bring the giant corporations to heel.

Otherwise, they'll keep gouging us. And not just at the pumps.

http://progressive.org/mag_wx042706

[W*GS]

Now that's a surprise - the Oil Puppet refuses to tax Big Oil?

Right up there with the Democratic Party refusing to allow school choice for poor inner-city families, due to their teacher's union masters.