AND THE WINNER IS....BIG BUSINESS!

On Thursday the U.S. House of Representatives easily approved an energy bill by a vote of 275 to 156. The bill, which is loaded with $14.5 billion in tax breaks and incentives, was hailed by Republicans as a major change in U.S. energy policy.

With crude oil prices near $60 a barrel, environmental and consumer groups criticized the legislation as nothing more than a giveaway to an industry enjoying record profits, while doing little to curb demand or encourage renewable energy.

Of the bill's $14.5 billion in tax breaks and incentives over 10 years, almost $9 billion is exclusively for oil and gas, electricity and coal companies. Less than $5 billion will be spent on energy efficiency and renewable energy programs.

Democrats rightly claimed that U.S. energy companies generous profits should allow them to fund new projects on their own without subsidies funded by taxpayers. On Thursday, Exxon Mobil Corp. reported a 32 percent jump in its quarterly profits to $7.64 billion.

The final version of the House bill dropped some pro-environment measures, such as the Senate's requirement that the federal government find ways to cut U.S. oil demand and improve fuel mileage for autos, trucks and SUVs.

"As long as we're consuming 21 million barrels (a day) and we're only producing 8 million, we're going to be importing oil," said Texas Republican Joe Barton. Which is exactly why finding ways to cut demand and increase car mileage would be such a wise idea.

Republicans admitted the bill won't cut oil imports in the near term, which total about 60 percent of the U.S. supply. In truth, it's hard to say if it will cut demand in the long term either.

The Senate is expected to approve the bill on Friday, just before Congress goes on its summer recess. President Bush will sign the energy bill, which he called one of his top priorities, next week.

"This legislation will help us reduce our dependence on foreign sources of energy. It will help address the root causes that have led to high energy prices," said White House spokesman Scott McClellan. Of course he didn't say just how it would reduce our dependence without reducing our demand.

The next major energy concern that Congress will debate is a Republican plan to open Alaska's Arctic National Wildlife Refuge to oil drilling. Republicans were crafty enough to separate that controversial plan from the energy bill and instead make it part of an enormous budget bill to fund the government. That bill cannot be filibustered.

Just another example of Big Industry first, the American people second.


Copyright © 2005 The Independent Report. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.

THE PRESIDENT'S TAX REFORM AGENDA

After winning a second term last year, President Bush announced that the focus of his domestic agenda would be "reforming" both Social Security and the federal tax code. With his Social Security plan stalled due to strong public opposition, the focus now turns to tax reform. This might be a better bet for a president looking to shift the focus from the mess in Iraq.

Last year, the President convened a panel of tax experts to give him recommendations on how to simplify the Federal tax code while also making it more equitable and efficient. The President's only demand; neither raise nor lower the amount of revenue collected by the Treasury.

On Wednesday, the panel made its first recommendation - eliminate the Alternative Minimum Tax (AMT). The AMT has become a regressive tax. It was originally implemented by Congress in the late 60's as a measure to prevent millionaires from avoiding taxes. In recent years, the AMT has become cumbersome middle class tax squeeze, with more and more people affected each tax season. At present, the Treasury Department says that 4 million Americans fall under the burden of the AMT, but next year the number will jump to 21 million, and then to 51 million in just ten years. That will not be politically popular in an election year.

It's possible, if not likely, that the AMT will remain in effect for the wealthiest Americans. But if the AMT is repealed for middle class tax payers, the Treasury would need to make up for the $1.2 trillion loss that would be realized over the next decade.

The panel is divided into four working groups that are sorting through numerous tax problems and various proposals for change. The groups are working on ways of simplifying tax laws, and replacing the tax system in whole or in part. Former IRS Commissioner Charles Rossotti said one group is addressing changes that might help the most taxpayers, like streamlining family deductions and credits and savings incentives. That group is also investigating the numerous thresholds at which taxpayers of differing income levels qualify for various tax breaks.

The commission will make its final recommendations this fall, and for the president it probably can't come soon enough. Simplifying the tax code and making it more fair is an everyman proposal that is likely to garner widespread support. Try and find someone who favors the current system, or who thinks the system is fair. Everyone thinks that someone else isn't paying enough, or paying their "fair share." The President could use a populist reform agenda to bolster his sagging poll numbers, and to give Republicans something to campaign on next year.

And really, who wants to oppose the notion of simplifying the tax code and making it more requitable to everyone? Not too many Democrats, I suspect.


Copyright © 2005 The Independent Report. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without the author's consent.