June 24, 2007

Grassley Watch

Senators Baucus (D) and Grassley (R)

When I recently discussed Senator Grassley’ calling the tax credits to the oil companies a “pig in a poke” as reported on the CBS website the quote was not quite what it seemed. The AP reported:

The bill's prospects are uncertain in the Senate, where Democrats hold a narrow majority. The top Republican on the tax-writing Senate Finance Committee, Sen. Charles Grassley of Iowa, said the bill was "another pig in the poke" that targets incentives necessary to promote domestic drilling.[1]

If we go to the transcript of the senator’s statement on the senate floor, it would seem that he is against the rollback of oil company incentives. Or is he? From the Floor Statement of Senator Grassley:

Thursday, January 18, 2007
I rise to address an issue that has received much scrutiny during the past few months, and is currently being debated in the House of Representatives. The other body is debating a bill that will repeal the so-called sweet-heart tax deals for Big Oil that were included the Energy Policy Act of 2005….
During the campaign cycle, members on the other side sold the taxpayer a bill of goods. They committed to repealing all the “tax giveaways” to Big Oil that the Republican Congress included in the Energy Policy Act of 2005…. How much money are they going to take back from Big Oil to alleviate consumers’ pain at the pump?One provision. That’s right, Mr. President. After all the demagoguery against our party and ties to big oil, they’re going to repeal one single tax provision enacted in the Energy Policy Act. And that’s only half of the story. It turns out that this outrageous “tax giveaway” to Big Oil is scored by the Congressional Budget Office to save the U.S. treasury $104 million over ten years. Not $14 billion. Not $1.4 billion. A mere $104 million….
A word of caution to the voters across America – beware of the goods you were sold
by this new Democrat Majority. In the case of repealing the big oil “tax giveaways” from Energy Policy Act, it’s turned out to be another “pig in the poke.”[2]

It wasn’t that the majority planned to roll back $104 million in tax incentives but instead it seems that that sum was not enough for the good senator.
Fast forward to June 19 and it is reported that the bill would reduce incentives by $6 billion and raise a total of $15 billion through new taxes; it is here that the media portrays Grassley as being against the bill, the whole this being “a pig in a poke.”
Later that same day it was reported that the bill would raise $29 billion. But this time the AP reported:

Senators acknowledged that oil companies would howl over the new taxes. But Sen. Chuck Grassley of Iowa, the Finance Committee's top Republican, said, "We have entered a new era in energy markets ... (that) requires a dramatic shift away from tax incentives for oil and gas production" and toward support for other energy sources and efficiency. (3)

Suddenly the Senator from Iowa was firmly on board and joined at the hip with Senator Baucus chairman of the Finance Committee. In senate debates broadcast on CSPAN June 20th Grassley speaking from the majority side of the aisle, and arguing against an amendment by fellow republican Senator Kyl, Grassley stated that we now have sufficient offsets, ie. taxes, to make a serious contribution to developing alternative energy resources. Offsets, which by now had climbed to $31 million from the oil industry to pay for this new energy package.
To think that by supporting the socialist agenda of the democrats that he is doing the right thing for the people of Iowa is ludicrous. Surely the oil companies will do more than howl as Mr. Grassley stated. These actions will have an adverse affect on domestic oil drilling and refining and with the exception of Iowa farmers and the ethanol industry the rest of us will be paying for this fiasco every time we pull up to the pump.

[1] http://abcnews.go.com/Politics/WireStory?id=2805859&page=
[2] http://www.senate.gov/~finance/press/Gpress/2007/prg011807.pdf
[3] http://abcnews.go.com/Politics/wireStory?id=3294641

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