Finally the MSM Admits it: It’s the Republicans’ Fault

This is something of a remarkable development. Some key quotes: "In our past writings, we have criticized both parties when we believed it was warranted. Today, however, we have no choice but to acknowledge that the core of the problem lies with the Republican Party. The GOP has become an insurgent outlier in American politics.... 'Both sides do it' or 'There is plenty of blame to go around' are the traditional refuges for an American news media intent on proving its lack of bias, while political scientists prefer generality and neutrality when discussing partisan polarization. Many self-styled bipartisan groups, in their search for common ground, propose solutions that move both sides to the center, a strategy that is simply untenable when one side is so far out of reach." - promoted by david

A great Washington Post piece by Thomas Mann of the (left of center) Brookings Institute and Norman Ornstein of the (right of center) American Enterprise Institute explores how Republicans have intentionally thwarted bipartisan agreement and waged a scorched Earth policy against every Democratic President and majority they encountered when they were out of power, and have compromised with no minority when they are in power. This is the strategy, make Americans sick of government to the point that they elect Republicans when they are fed up who then feed the corporate trough until they are kicked out again. Unfortunately the authors provide us with no solutions, but they do admit who the culprit is and urge the MSM to start calling out these extremists for who they are. Objectivity requires agreeing to the same set of facts, when one side recklessly abuses, ignores, or even conceals these facts then its the responsibility of the objective press to report on that. Simply letting both sides have their say is inadequate and as these authors contend, legitimizes the strategy of obstruction and extremism.



Discuss

72 Comments . Leave a comment below.
  1. Meanwhile, back at the Globe,

    the editorial page continues to peddle its bipartisan bullsh!t every chance it gets, despite the realities that Mann and Ornstein so aptly point out. From today’s editorial on, of all things, the recent fixation on dog-related stories in the presidential race:

    Fixing the federal government’s troubled finances depends on Democrats’ willingness to challenge a base that’s fiercely protective of Social Security and Medicare, and on Republicans’ willingness to bend on their antitax orthodoxy. Instead, the candidates seem intent on throwing bones to their bases, in hope that they bite.

    Wrong. This kind of thing is exactly what Mann and Ornstein are talking about when they take on the media’s reflexive “there’s plenty of blame to go around” way of dealing with difficult problems. The fact that a problem is difficult doesn’t mean that both sides’ ideas for fixing it are equally valid, or equally problematic. Similarly, an idea’s validity has little if any correlation to the degree to which it attracts bipartisan support. As I’ve said before, bipartisanship for its own sake is little more than a fetish, but it’s one that unfortunately is practiced by a staggering percentage of the media elites in this country.

  2. This article will keep the

    mentally challenged who frequent this site happy today. Let’s all feel superior, now, a one, a two, a three…:)

  3. Coincidence?

    I find it interesting that this was posted today, the 3 year anniversary of the Democratic controlled U.S. Senate last passing a budget. How did we rascally Republicans obstruct that?

    • By EXPLODING the entire financial system

      Seriously, do think we have NO memory?

      Do you think that a President McCain would have proposed a balanced budget? The prior administration, with the full support of the GOP, destroyed the economy while simultaneously waging TWO major wars and slashing taxes.

      It is miraculous, and a testament to skill of freshman President Barack Obama, that the economy is as strong as it is — in spite of the relentless efforts of the GOP to destroy him regardless of the impact on America.

      • Hear Hear

        It is miraculous, and a testament to skill of freshman President Barack Obama, that the economy is as strong as it is — in spite of the relentless efforts of the GOP to destroy him regardless of the impact on America.

        Huzzah!

      • Who said anything about a balance budget.

        A budget. Just a budget. The last two Obama budgets were voted down unanimously in the Democratic controlled Senate and the current Senate refuses to even consider either the GOP House Budget or President Obama’s budget.

        It is difficult for me to support arguments I never made.

        As for your memory…

        Do you remember that the Community Reinvestment Act was originally signed into law by President Carter?

        Do you remember that the CRA was expanded by President Clinton?

        Do you remember that overturning Glass – Steagal which allowed the merger of banks, securities and insurance companies was signed by President Clinton?

        Do you remember that Sarbanes Oxley which created new and/or enhanced regulations on financial reporting was signed by President Bush?

        Oh. Just for efficiency I’ll leave my latest comment on Catch and Release here. Petroleum companies don’t get any subsidies.

        • No subsidies?

          Sure, Brad. Whatever you say.

          • Yes Tom. No subsidies.

            Farmers get subsidies…direct cash payments from the government.
            Ethanol manufacturers, electric car makers, solar panel makers, wind turbine makers get subsidies…direct cash payments and/or tax credits which are direct offsets to their tax liabilities.

            Petroleum companies do not.

            There are tax treatment rules that do benefit petroleum companies but those treatments are available to all other manufacturing and/or mining companies.

            Petroleum companies get no government subsidies.

    • Destroying the credit of the United States of America

      I just don’t understand what denial floats about in circles Republican but threatening not to raise the debt ceiling was as a reckless, unpatriotic, party-first action by the Republican maniacs in Congress. We are able to afford our debt — unlike Greece or Italy — precisely because the interest rate on it is so close to zero. Playing chicken with our credit is not what patriots or intelligent people do.

      In addition, the Republicans running for President, including Romney, said they would not have voted to raise the debt ceiling.

      These guys are clearly not qualified for the offices they even hold currently.

      • Without the typo

        threatening not to raise the debt ceiling was a reckless, unpatriotic, party-first action by the Republican maniacs in Congress

      • kbusch...yes and no

        In some ways we can afford our debt. One way we can afford our debt because foreign countries are willing to lend us the money we need to fund it. For years we were able to afford our debt because we borrowed the interest payments and more from Social Security.

        As for the Republican push to not approve a debt ceiling without significant spending cuts, it was not about defaulting on our debt. The Federal Government takes in more in taxes than it costs us to service our debt. (Those that say by not raising the debt limit Republicans were refuting debts the government already incurred are being disingenuous at best.)

        In 2011 the Federal Government took in $2.3 trillion in revenues and our interest expense was $454 billion. This would have left us with $1.75 Trillion to spend on government programs. The problem is that we spent $3.1 Trillion on non interest expense spending.

        So without raising the debt limit we could have afforded servicing our debt and another $1.75 trillion in spending. It was the other $1.3 trillion we had to borrow.

        I am making no value statement about what we did, didn’t or should spend money on. I am simply talking numbers and reminding people that not raising the debt limit would not have triggered a default on our debt. It would have triggered a lot of other bad things but not a default.

        I would suggest we have to make tough decisions now while they are still our decisions to make. That is the true difference between us, Greece and Italy. The decisions are no longer theirs.

        • "It was not about defaulting our debt"

          Really?

          The Republicans in the House used this threat to attempt to coerce changes. No responsible political party would ever do this. Full stop. End of story. Next question.

          • Really?

            As I showed above there was no threat of default…unless President Obama CHOSE to default.

            Yes. Republicans were trying to coerce change. The change was not burying our children and grandchildren in debt. Of course that is now called “extreme.”

            Would a responsible political party go three years without passing a budget? No. Full stop. End of story.

            No responsible party would. But the Democrats have.

            • And no....

              The Republicans never talked about defaulting on the debt.

              That was the meme that the Democrats and theor lapdogs in the MSM used.

    • The Filibuster Record

      We also have seen a number of cases in which Republicans have voted to filibuster proposals they have sponsored — or voted to filibuster a bill or appointee for which they later voted. Our own junior Senator voted to break a filibuster on a bill for which 12 Republicans later voted in favor.

      What qualified-for-office Senator votes to filibuster something he or she supports?

      None. This is partisan-driven incompetence.

    • Destruction as policy

      Former GOP operative Mike Lofgren

      A couple of years ago, a Republican committee staff director told me candidly (and proudly) what the method was to all this obstruction and disruption. Should Republicans succeed in obstructing the Senate from doing its job, it would further lower Congress’s generic favorability rating among the American people. By sabotaging the reputation of an institution of government, the party that is programmatically against government would come out the relative winner.

      Reread those lines: Should Republicans succeed in obstructing the Senate from doing its job. Success in preventing the Senate from doing its job is a Republican goal.

      Unpatriotic or incompetent, you decide.

      • Unpatriotic and frighteningly competent

        They are clearly and viscerally competent and this is the mistake Democrats make time and time again underestimating these guys. Their one goal is to wage and win partisan warfare. They have *zero* public policy goals. Their goal is to win power, use power to enrich their friends, and get power back when they are out of power. The vast majority of GOP operatives, including some I know personally, are pro-war libertarians. To a man (and its still almost all men), none of them care about social issues except as a wedge that can be used to cudgel working people into voting for far right economic and foreign policies. The goal is to almost complete privatization of government and what resources we cannot get here at home we can seize abroad. We must stop it and Americans Elect, David Brooks, Friedman, the centrist punditocracy, etc. are failing to do their jobs by enabling this bandit of thieves.

        • Superb politicians, incompetent statesmen

          I agree with you that we consistently underestimate Republican skill at politics. (“Har! har! har! He drives around in a truck like a fake everyman but he owns multiple homes! What an unelectable phoney! Har! har! har!”)

          Our language has also become degraded so that we refer to Senators as politicians rather than say officials or legislators.

          But a Senator or a Congressperson is an official, and, at that, Republicans now demonstrate willful, intentional incompetence. No matter how sharp it is politically, scoring political advantage is not their job under a republican form of government.

        • Really?

          Their one goal is to wage and win partisan warfare.

          Who is pitting the “rich” against the “poor”? Dems.

          Who is pitting the “men” against the “women”? Dems.

          Who is pitting the “latinos” against the “anglos”? Dems.

          Who is pitting the “workers” against the “owners/corporations”? Dems.

          Who was pitting the “Republican Presidential candidates against each other” ? Dems.

          The GOP is not interested pitting Americans against each other, Obama is.

          • Partisan warfare

            It is true that Democrats engage in partisan warfare. What? you expect us to roll over?

            The point is that partisan warfare is all Republicans seem interested in doing. The Ryan deficit reduction plan claims it will close the huge deficit it will create by closing tax loopholes. Two things:

            1. It doesn’t specify what those tax loopholes are.
            2. The Norquist pledge prevents Republicans from closing tax loopholes.

            This is not policy.

  4. I still haven't heard an answer to BradM's question about a budget.

    Why haven’t the Senate Democrats created a budget for 3 years and have no plans to until after the election? Why? Where’s the courage? Where’s the leadership? Where’s the criticism from everyone, including BMGers?

    Paul Ryan’s budget proposal is open for criticism for sure, but I have very little respect for people who criticize but offer no alternative of their own.

    • Hey!

      There was Simpsons-Bowles which was DOA on Congress, both times it was proposed, there was Obama’s budget, also DOA. The Democratic Senate is not going to be held hostage by a Republican House that is shouting “Ryancare or else!”. Ryancare is not meeting us half way, Simpsons Bowles was and every Republican Presidential candidate raised their hand in opposition during the debates and now they are blaming Obama for Simpsons Bowles failure when they have voted against it twice! The second time as recently as two weeks ago when some principled Republicans *you’d call them RINOs) co-sponsored it. I just saw the Crossroads ad in Illinois about the budget so its clear you got your talking points emailed to you from Rove, but this is not a new development and its almost entirely a Republican one.

      • You mean the Simpson-Bowles, bipartisan commission which Obama created...

        and then ran away from? That one?

        Obama’s budget which was defeated by the House 414-0, that was 0 (ZERO) meaning no Democrat voted for it.

        I get my talking points from talking to people. I think the Senate Dems have completely lost their courage and going three years without a budget is indefensible. Surely you have to admit that you would be having a field day of Republicans did this. Come on!

        You don’t like Ryan’s plan so where’s the Dem plan… chirp, chirp, chirp…

        • How about this budget, John?

          http://cpc.grijalva.house.gov/index.cfm?sectionid=70

          The People’s Budget eliminates the deficit in 10 years, puts Americans back to work and restores our economic competitiveness. The People’s Budget recognizes that in order to compete, our nation needs every American to be productive, and in order to be productive we need to raise our skills to meet modern needs.

          Our Budget Eliminates the Deficit and Raises a $31 Billion Surplus In Ten Years
          Our budget protects Social Security, Medicare and Medicaid and responsibly eliminates the deficit by targeting its main drivers: the Bush Tax Cuts, the wars overseas, and the causes and effects of the recent recession.

          Our Budget Puts America Back to Work & Restores America’s Competitiveness
          • Trains teachers and restores schools; rebuilds roads and bridges and ensures that users help pay for them
          • Invests in job creation, clean energy and broadband infrastructure, housing and R&D programs

          Our Budget Creates a Fairer Tax System
          • Ends the recently passed upper-income tax cuts and lets Bush-era tax cuts expire at the end of 2012
          • Extends tax credits for the middle class, families, and students
          • Creates new tax brackets that range from 45% starting at $1 million to 49% for $1 billion or more
          • Implements a progressive estate tax
          • Eliminates corporate welfare for oil, gas, and coal companies; closes loopholes for multinational corporations
          • Enacts a financial crisis responsibility fee and a financial speculation tax on derivatives and foreign exchange

          Our Budget Protects Health
          • Enacts a health care public option and negotiates prescription payments with pharmaceutical companies
          • Prevents any cuts to Medicare physician payments for a decade

          Our Budget Safeguards Social Security for the Next 75 Years
          • Eliminates the individual Social Security payroll cap to make sure upper income earners pay their fair share
          • Increases benefits based on higher contributions on the employee side

          Our Budget Brings Our Troops Home
          • Responsibly ends our wars in Iraq and Afghanistan to leave America more secure both home and abroad
          • Cuts defense spending by reducing conventional forces, procurement, and costly R&D programs

          Our Budget’s Bottom Line
          • Deficit reduction of $5.6 trillion
          • Spending cuts of $1.7 trillion
          • Revenue increase of $3.9 trillion
          • Public investment $1.7 trillion

          Voted down in the house – every Republican voted against it, and too many chicken shit Dems voted against it too, all because the progressives had the nerve to raise taxes. That’s why I’m working to reform my party from within – more and better Democrats, in that order.

        • False facts.

          Obama didn’t ‘run away’ from Simpson-Bowles.

          The rest of the paper is an extremely detailed comparison between the president’s budget and Ryan’s plan, as well as between both plans and Simpson-Bowles. This last bit is important to the White House’s psychology on this issue: They find it shocking — and Sperling in particular finds it frustrating — that they are constantly criticized for not embracing Simpson-Bowles when their budget looks fairly similar to that proposal and the Republican budget violates the commission’s basic principles of balancing revenues with spending cuts and protecting programs for the poor.

          • So why doesn't Obama BOLDLY come out and say it?

            Why can’t he have his mouthpieces on Meet the Press and other shows and say “I support the Simpson-Bowles Commission’s recommendations and we should proceed with it immediately!”? Why?

            Your points are well taken but I still haven’t heard the answer as to why the Senate hasn’t put together their vision of our budget. All I’m hearing is lame excuses.

            • Politics and Taxes

              I agree with leading commentators on this that Obama’s tepid embrace of Simpson-Bowles is mostly politics.

              On the one hand, embracing Simpson-Bowles wholeheartedly would likely have doomed the subsequent high-profile deficit reduction negotiations right from the start. House Republicans simply will not support anything that seems like something the President might get some credit for (see e.g.: http://www.washingtonpost.com/blogs/ezra-klein/post/the-reason-the-white-house-didnt-embrace-simpson-bowles/2011/08/25/gIQAq1j2dR_blog.html?wprss=ezra-klein)

              On the other hand, Simpson-Bowles goes too far for the left wing of the Democratic party. (see: http://www.forbes.com/sites/joshbarro/2012/02/27/the-real-reason-obama-wouldnt-embrace-simpson-bowles/ )

              We liberals, rightfully I would argue, are pushing hard for Obama to make up for 2009-2011 capitulations in Health Care, foreign policy (e.g. Gitmo and Afghanistan) and immigration reform. Deficit reduction is really much bigger than all these three combined. Maintaining a real safety net (especially Social Security and Medicare) and government investments in our economy require new revenues. Preferably, we progressives hope, without imposing too much of an additional burden on the non-wealthy (consistent with Obama’s pledge on not raising income taxes for those making under $250,000). We expect a Democratic President to make a bold stand here and Simpson-Bowels goes a little too far with broad-based tax increases and a little too far with cutting Social Security/Medicare.

              I’m happy to see that the Obama budget proposal is “fairly similar” to Simpson-Bowles but thrilled to see where it differs.

        • Remember

          YOUR House voted against the Presidents budget AND Simpson Bowles. Karl Rove is cynical enough to assume most Americans don’t read the Constitution and realize it takes BOTH houses to pass a budget. If Grover Norquist did not hold the GOP hostage we would have passed a budget by now. The Senate would have loved to pass Simpson Bowles which Kent Cobrad and Tom Coburn embraced but Tom backed out when Grover called him over and over and he pulled out. It’s just laughable for Romney and the GOP leadership to lament Simpsons Bowles failure today when they voted against it two weeks ago and punished the 30 Republicans who co sponsored it with threats from Grover. A truly viable proposal spreads pain around with cuts AND taxes. One side refuses to raise ANY taxes and is ideologically holding this debate hostage and waiting to replace the President instead of negotiating and compromising in good faith. As Grover said recently “I don’t want Romney to be a leader I just need his pen to sign Ryan’s laws”. The GOP has no incentive to pass anything and are in a holding pattern until Obama loses. As one of their leaders said two years ago their only policy goal is to make him a one term President. In that they may be successful but the country will suffer.

  5. When a party controls the presidency...

    …the President is usually defered to be fellow partisans in Congress. Of course, anything regarding the Senate has to take into account the now-routine filibuster, so maybe Senate Dems just decided to pick other fights. Your “Really?” comment upthread is hogwash even by your standards JohnD. Dems are trying to make things fair for both sides of all those equations (except for the last which the GOP does just fine on its own) whereas the GOP has at both state and federal levels enacted or proposed legislation to stick it to the traditionally less powerful side.

  6. An aside...

    Watching Chris Hayes this morning on MSNBC, the topic was Britain’s descent into recession under Cameron’s austerity plan. In a clip from PM Questions, Miliband blasted Cameron for the austerity policies to which Cameron responded, “let us not forget whose policies of high taxes and spending got us into this mess to begin with.”

    No one challenged it.

    Taxes and spending did not cause the worst economic mess since the Great Depression. It’s that simple.

  7. Johnd...I can guess what the d is for

    Their one goal is to wage and win partisan warfare.

    Who is pitting the “rich” against the “poor”? Dems.
    WRONG-DEMS ARE JUST POINTING IT OUT> WHICH DRIES REB’s CRAZY
    Who is pitting the “men” against the “women”? Dems.
    WRONG AGAIN-WE JUST POINT OUT THE FACTS
    Who is pitting the “latinos” against the “anglos”? Dems.
    SAME AS ABOVE
    Who is pitting the “workers” against the “owners/corporations”? Dems.
    THE SO_CALLED JOB CREATORS ARE DOING A GOOD JOB OF IT WITHOUT OUR HELP
    Who was pitting the “Republican Presidential candidates against each other” ? Dems.
    ARE YOU EMBARRASSED BY YOUR PARTY’S ANTICS OR JUST DILUSIONAL? WOW
    The GOP is not interested pitting Americans against each other, Obama is.
    IF THAT IS TRUE WHY ARE REPUBLICANS TAKING EVERY OPPORTUNITY TO INCREASE ECONOMIC, LEGAL, SOCIAL, CULTURAL INEQUALITY IN THIS COUNTRY? WHY DO YOU HATE MERIKA?
    johnd @ Sun 29 Apr 5:22 PM

  8. And BradM is just a liar

    MEMORANDUM May 11, 2011
    To: Honorable Harry M. Reid
    Subject: Tax Policy and Gasoline Prices
    This memorandum is written in response to your request for an analysis of the extent to which proposed
    tax changes on the oil industry are likely to affect domestic gasoline prices. The specific tax proposals
    that you requested be considered are the Section 199 deduction for domestic production, the repeal of the
    current expensing of intangible drilling costs provision, revision of the dual capacity taxpayer rules,
    percentage depletion, and the tertiary injectants deduction.
    Background
    The oil and natural gas industries benefit from existing tax policies. These provisions of the tax code,
    which many identify as tax subsidies, reduce the tax liability of the industries, and/or result in tax
    treatment that differs from that applied to other industries. As a result, these tax provisions encourage
    related activities to a greater extent than under a more neutral tax system, possibly altering the decisions
    made by affected firms with respect to investment, output, and pricing. If these provisions are repealed, it
    is likely that the economic behavior of the industries might be altered to an extent related to the size of the
    tax changes.
    The economic theory of taxation takes the point of view that corporations do not have an independent
    capability to pay taxes, only people can pay taxes. The implication of this viewpoint is that corporate
    income tax payments will ultimately be shifted to shareholders, owners of the factors of production, or
    consumers.1 Using this framework, the question of whether the tax provisions identified in your request
    will affect gasoline prices is one of whether the nature of the tax provision is such that forward shifting of
    the burden of the tax to consumers is likely, or whether the tax burden will fall on the shareholders in the
    form of reduced profit.
    The price of gasoline is composed of four components. The largest component of the price is crude oil,
    67%, followed by federal, state, and local excise and sales taxes on gasoline sales, 13%, refining
    expenses, 11%, and distribution and marketing expenses, 9%.2 If the proposed changes in tax policy result
    1 Harvey S. Rosen, Public Finance, 7th ed. McGraw Hill Irwin, New York, 2005, p.274.
    2 Energy Information Administration, Gasoline and Diesel Fuel Update, available at http://www.eia.doe.gov. Percentages are current
    for January 2011, and based on the price of a gallon of regular gas at $3.10 per gallon.
    Congressional Research Service 2
    in increases in the price of gasoline, it would generally be through an increase in the price of oil.
    However, the price of oil is determined on world markets and tends not to be sensitive to small cost
    variations experienced in regional production areas. In the recent market environment, with the price of
    oil averaging approximately $90 per barrel over the period December 2010 through February 2011, and
    the current price over $100 per barrel, prices are well in excess of costs and a small increase in taxes
    would be less likely to reduce oil output, and hence increase petroleum product (gasoline) prices.3
    Section 199
    The Section 199 deduction for the oil industry is a 6% deduction from net income, capped by limitations
    of payroll size. For the purpose of economic analysis, the repeal of the Section 199 deduction is
    equivalent to an increase in the tax on corporate profit. It is widely accepted that a proportional change in
    taxes on profit affects neither the firm’s incremental costs or revenues, and therefore does not change its
    behavior with respect to output. Since output does not change, there is little reason to believe that the
    price of oil, or gasoline, consumers face will increase.4
    Because Section 199 provides an incentive for domestic production compared to foreign production, some
    have claimed that the result of repeal would be greater dependence on foreign sourced oil and natural gas.
    In the short-run it is unlikely that this would occur due to the nature of oil and natural gas production.
    Once a well is in the producing phase, production tends to be maximized, within the limits of sound oil
    field management techniques. With current oil prices at, or near, $100 per barrel in the United States, it is
    unlikely that firms will slow production, or close wells as the result of the loss of the Section 199
    deduction.
    Intangible Drilling Costs
    Repeal of the immediate expensing of intangible drilling costs provision and replacement with a form of
    cost amortization more consistent with depreciation methods common in other industries likely will have
    no effect on current U.S. oil production, and hence no effect on current gasoline prices. The purpose of
    the expensing provision is to enhance the investment returns for investors in what has historically been a
    risky activity: exploring for, and developing hydrocarbon resources. Since the provision has little effect
    on wells already in production, available output and prices should be unaffected if the provision is
    repealed and replaced with less favorable amortization procedures.
    Wood MacKenzie, a consultancy, determined that the sum effect of eliminating the Section 199 deduction
    and the repeal of the expensing of intangible drilling expenses would have an effect on the rate of return
    to exploration, lowering the return of marginal projects, and reducing over-all domestic exploration and
    development activity by U.S. firms. However, the conclusion is sensitive to the level of oil and natural
    gas prices. High prices can raise rates of return substantially. Natural gas projects are more likely than oil
    projects to be affected by the tax changes because they are experiencing low market prices due to the
    volume of non-conventional gas production that has entered the market in the past several years. The
    Wood MacKenzie study did not conclude that U.S. gasoline prices would be affected by the tax changes.5
    3 Energy Information Administration, WTI Spot Price, available at http://www.eia.doe.gov.
    4 Harvey S. Rosen, Public Finance, 7th ed., McGraw Hill Irwin, New York, 2005, p.290.
    5 Wood MacKenzie, Evaluation of Proposed Tax Changes on the U.S. Oil & Gas Industries, August 2010.
    Congressional Research Service 3
    Dual Capacity Rules
    The oil industry has benefited from the ability to deduct very broadly defined foreign income tax
    payments from their U.S. tax liability since the 1950s. If the definition of what constituted an actual
    income tax payment were tightened and foreign governments did not reduce their charges
    correspondingly, the industries’ domestic, as well as total income tax burden would likely increase.
    However, this provision again is a tax on profit, and in line with the economic theory of taxation, should
    have no effect on the firms output or pricing decisions, and therefore no effect on the price of gasoline.
    The incidence of the tax would appear to be on shareholders. The change in the dual capacity tax payer
    rules might make overseas investment that leads to foreign profits less attractive to the companies than
    investment in the United States. This could lead the firms to enhance domestic capital spending leading
    to increased domestic production and reduced oil dependency.
    Percentage Depletion
    The percentage depletion allowance was repealed for the major oil companies by the Tax Reduction Act
    of 1975 (Pub.L. No. 94-12). Percentage depletion remains generally in effect only for the independent oil
    companies. As a result the percentage depletion allowance should no longer be a factor in investment,
    output and pricing decisions by the five major oil companies
    Teritiary Injectants Deduction
    Costs associated with the use of tertiary injectants are currently treated as deductible expenses. Expensing
    of these costs encourages their use and enhances oil production levels. For smaller, independent
    exploration and development firms the cost incentive could be important. However, the five major oil
    companies, to which repeal would apply, earned over $32 billion in net income in the first quarter of
    2011. Repeal of the deduction for the industry is estimated by the Obama administration to yield only $6
    million in revenue in 2012. Only a part of the $6 million revenue estimate would be paid by the five
    major oil companies. As a result, it is likely that repeal of the deduction, with a change to capitalization,
    or amortization, of these costs, would have only a small effect on oil production or pricing, especially in a
    market where oil returns over $100 per barrel. In periods of low oil prices the repeal of the deduction
    could have a larger effect. The effect on domestic gasoline prices is likely to be small.
    General Considerations
    The magnitude of the revenue effects of these tax changes might be important in evaluating their effects
    on the oil industry. The five provisions, taken together, are expected to raise approximately $1.2 billion in
    2012. For the calendar year 2010, the revenues of the five largest oil companies were approximately $1.5
    trillion with additional revenues accruing to the non-majors. The net incomes, after tax, of these five
    companies totaled over $76 billion with additional earnings accruing to the non-majors. The total
    expected tax revenues are only 5% of the earnings of the five largest firms in the industry and a smaller
    percentage of the total industry.
    Even if the changes in taxes did impact domestic, or overseas exploration and development activity, that
    does not necessarily imply that less oil would be available in the U.S. market. More might be imported,
    with little or no effect on gasoline prices.

    Political unrest, expectations effects on financial markets, macroeconomic growth trends, the value of the
    dollar and a host other factors have contributed to fluctuations in the price of oil and gasoline. Any effect
    Congressional Research Service 4
    due to changes in the tax treatment of the oil industry would be hard to separate from the changes due to
    other factors, given the size of the relative magnitudes.

    • Actually

      Nothing in what you posted counters anything I have said.

      Nice try though.

      • Did you read it, Brad?

        Or did you fail reading comprehension in grade school? It lists out subsidies received by the oil and gas industries, subsidies which you claimed do not exist.

        • Oh My God. You're right.

          And it’s worse than we thought!!!

          The oil industry is going to make an estimate $200 billion in pre-tax profits for 2011. Yet through accounting rules and tax laws, they are only going to pay an estimated $95 billion in taxes. That is a $105 Billion taxpayer funded giveaway to big oil!

          I am outraged!

          • Nice chnage of subject

            No one has argued that the oil and gas industries don’t pay taxes – however, you said that they do not get ANY subsidies, and that they are not treated any differently for tax purposes than any other industry. When shown to be wrong, you wave your hands about something else entirely – a typical tactic of a dishonest debater.

            • You're wrong again John

              I said they don’t get treated differently than other mining and/or manufacturing companies as they are classified.

              No one has shown me any subsidy, direct cash payment from the government to the oil industry.

              • You can argue that the tax breaks aren't subsidies...

                …all day long Brad, and you’ll still be the one who is wrong in this argument. For example, the Joint Committee on Taxation classifies them as tax expenditures – in other words, subsidies:

                Joint Committee On Taxation Lists Oil Industry-Specific Tax Incentives As Tax Expenditures. The Congressional Joint Committee on Taxation notes that tax expenditures are defined by law as “revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liability.” The Committee lists several tax expenditures specific to the oil and gas industry, such as incentives for pipelines, refineries, oil exploration, and oil recovery. [Joint Committee on Taxation

                All you are doing is echoing the right wing talking point that oil companies don’t get subsidies – when confronted, you do nothing but parrot the same lie again.

                • John. Do you have an estimate

                  …for how much in subsidies you receive from the federal government?

                  Slightly off topic but I am curious.

                  • He could have a ton of subsidies...

                    … in the form of tax breaks. It doesn’t matter. It’s orthogonal to the point that the oil companies receive subsidies. What John gets is a distraction from the original point.

                    • Mr Lynne

                      Then I will go back to one of my secondary points. If you count every dollar of profit or income not given to the government as a subsidy then we are subsidizing the oil industry to the tune of $105 billion this year as we are allowing them to keep some of their income.

                    • Now you're just redefining terms.

                      Nobody in any common lexicon or context defines a subsidy as you just have, so it’s another non-sequitur.

                    • Okay.

                      So if legal tax breaks as you say are not subsidies then I rest my case. Oil companies get no subsidies.

                      QED

                    • Unbelievable.

                      You really are a zen master at putting words on others’ mouth. I said no such thing. I said your definition, “every dollar of profit or income not given to the government as a subsidy” is not used by anyone.

                      I’ll go further now. Your definition is dumb, moronic, and stupid. It’s a straw man and belies that you have any actual intent at having an actual conversation.

                    • Actually what matters is...

                      …if John considers them to be subsidies. What will be even more fun is listening to his rationalization if he doesn’t.

      • Here's the nut:

        These provisions of the tax code, which many identify as tax subsidies, reduce the tax liability of the industries, and/or result in tax treatment that differs from that applied to other industries.

  9. I'd say it a third time but you get the point

    Memo is from the Congressional Research Service
    ;)

    • If you can point to

      any part of that memo that talks about payments from the government to the oil industry along the lines of farm subsidies, subsidies to ethanol manufacturers, grants to green technology companies, please do so.

      Again, the tax treatments that some call “subsidies” or “special tax breaks” are in fact, available to virtually all other mining and/or manufacturing companies.

      As for that being “treatment that differs from that applied to other industries” that is true. Tax rules for oil and gas companies differ from those on retail stores, law firms, banks and scores of other industries.

  10. Is it just me

    Or are BradM and JohnD resorting to repeating arguments that have been shot down ON THIS VERY THREAD?!

  11. Simpson-Bowles

    As I recall everyone was upset about it, though I don’t recall Obama running away. What I recall is him defending the outcome longer than some of us would have liked. I also recall that it led to the very attitude being discussed on this thread of false balance (ie “If everyone is upset they must have done something right.”) I’m fairly certain there have been Democratic budgets; the law REQUIRES the President to propose one annually, but I have a hard time believing a President’s budget got zero votes. Someone please tell me that was a procedural vote that our friends on the other side here are misconstruing or something. As for response to Ryan, I’d be happy if the Dem plan were simply not-Ryan, but it turns out I don’t have to be. The President has proposed letting some Bush tax cuts expire to increase revenue rather than cutting that hurts people, along with the Buffet Rule. There’s also the People’s Budget which some Congressional Democrats have proposed. Some may not agree and that’s fine, but please don’t say nothing has been proposed when it clearly has been.

  12. So bradm, you're wrong

    Now explain please why an industry where the 3 largest U.S. oil companies made $80 billion in profits, the top 5 made $137 billion in profits needs a $4 billion tax break (or whatever you want to call it?)

  13. But don't take my word for it, bradm...

    Former Shell Oil CEO: “Subsidies Are Not Necessary” for Drilling and Production. Large oil companies don’t need tax subsidies when oil prices are high, a former CEO of Shell Oil said in February. “In the face of sustained high oil prices it was not an issue—for large companies—of needing the subsidies to entice us into looking for and producing more oil,” John Hofmeister told National Journal Daily. “The fear of low oil prices drives some companies to say that subsidies should be sustained,” Hofmeister said. “And my point of view is that with high oil prices such subsidies are not necessary.”

    Big Five CEOs All Said They Do NOT Need Incentives to Explore for Oil and Gas. In a 2005 hearing, Sen. Ron Wyden asked the CEOs of the big five oil companies, Exxon, Chevron, ConocoPhillips, BP and Shell, “Gentlemen, the president says, and I quote, ‘With $55 oil, we don’t need incentives to oil and gas companies to explore. There are plenty of incentives.’ Now, today, the price of oil is above $55 per barrel. Is the president wrong when he says we don’t need incentives for oil and gas exploration?” All five CEOs said they agreed with the President. Exxon CEO Lee Raymond said, “I don’t think our company’s asked for any incentives for exploration.” ConocoPhillips CEO Jim Mulva added, “with respect to oil and gas exploration and production, we do not need incentives.” [Joint Hearing of The Senate Commerce, Science And Transportation Committee And The Senate Energy And Natural Resources Committee, 11/9/05]

    Exxon CEO on Tax Loophole: “It Doesn’t Make Any Difference Whether It’s There Or Not.” Asked in 2005 about a proposal to repeal $2.6 billion in tax breaks for oil companies, Exxon CEO Lee Raymond said of the tax break, “As far as my company is concerned, it doesn’t make any difference whether it’s there or not.” That same year, Raymond said, “let me be clear. I’m not asking for any incentives from Washington. I never have, and I never will.” [Joint Hearing of The Senate Commerce, Science And Transportation Committee And The Senate Energy And Natural Resources Committee, 11/9/05; Fox News, 10/17/05]

    Even Republicans Acknowledge That It Is Time to Close Big Oil Loopholes
    Speaker Boehner Said Oil Companies “Ought to Be Paying Their Fair Share.” During an ABC News interview last week, House Speaker John Boehner said Congress should “take a look” at multibillion-dollar tax subsidies to oil companies. “It’s certainly something we should be looking at,” Boehner said. “We’re in a time when the federal government’s short on revenues. They ought to be paying their fair share.” [ABC News, 4/25/11]

    GOP Budget Chairman Ryan Agrees Tax Subsidies for Big Oil Should End. Last week, Rep. Paul Ryan said that oil company subsidies should end. Ryan said, “as part of an overall corporate tax reform, tax loopholes and deductions for all corporations should be scaled back or eliminated entirely. That obviously includes oil companies.” [Reuters, 4/29/11]

    GOP Sen. Kirk Explaining Opposition to Big Oil Subsides: “They’re Doing Just Fine On Their Own.” Earlier this year, Sen. Mark Kirk said, “I voted to wipe out many of the oil company subsidies. They’re doing just fine on their own. I think that many of the corporate welfare programs are misplaced.” [Think Progress, 3/1/11]

    GOP Sen. Corker: Eliminating Section 199 Deduction is NOT a Tax Increase; It Is “Closing a Loophole.” In 2008, Republican Senator Bob Corker and the so-called “Gang of 10” introduced an energy package that included eliminating the Section 199 manufacturing deduction for oil and gas companies. Discussing chances that the package could become law, Sen. Corker said of the Bush Administration, “Will they look at what we’re doing with Section 199 as a tax increase? We look at it as closing a loophole.” Corker added, “I don’t consider this a tax increase. I consider it closing a loophole.” [Commercial Appeal, 8/17/08]

     Corker: Eliminating Section 199 Deduction is About Getting Incentives “On Balance” And Correcting Inadvertent Error from 2004. In 2008, Sen. Bob Corker explained, “with respect to 199, I do think it should be noted, the oil companies did not even benefit from this provision until 2004… So this is not something, you know, our Congress was trying to solve a manufacturing issue in this country. They came in almost inadvertently into this. So I think it should be noted that this is just about correcting something and actually trying to get the incentives around energy on balance again.” [Press Conference, 8/1/08]
    GOP Sen. Graham: It’s Not Good Policy to Give Incentives “To Do What They’re Going to Do Anyway.” Discussing the “Gang of 10” proposal to eliminate the Section 199 manufacturing deduction for oil and gas companies, Sen. Lindsey Graham said, “It doesn’t increase taxes by one dime. It’s an incentive. And what I think would be good public policy is to give incentives to create alternatives to oil. Not give oil companies and incentives to do what they’re going to do anyway.” [Fox News, 8/13/08]

    GOP Sen. Snowe: At a Time of Record Oil Profits and High Consumer Prices, Tax Breaks for Big Oil Are “Not Only Unnecessary, They Are Reckless.” “At a time of record profits for oil companies and skyrocketing energy costs for consumers, tax breaks for the oil industry are not only unnecessary, they are reckless,” Sen. Olympia Snowe said in 2006. “It would be far wiser to redirect the tax expenditures from these provision [sic] to incentives, such as the development of alternative and renewable energy sources from products that are developed, grown and manufactured domestically, so that the current energy crisis can be the last one.” [Snowe Press Release, 4/26/06]
    GOP Sen. Grassley Supported Eliminating Section 199 Deduction for Big Oil To Fund Tax Relief. Discussing a bipartisan tax package in 2008 that included eliminating the Section 199 manufacturing deduction for major oil and gas companies, CongressNow reported that Sen. Chuck Grassley defended the provision as proper because the bill’s approach ‘reflects the principle that tax-related offsets should be used for tax relief and not more spending.’” [CongressNow, 9/11/08]

    Bush in ’05: “We Don’t Need Incentives to Oil and Gas Companies to Explore.” In 2005, President Bush said, “I will tell you with $55 oil we don’t need incentives to oil and gas companies to explore. There are plenty of incentives.” [Remarks at the American Society of Newspaper Editors Convention,

  14. Apparently

    Only bradm and the Junior Senator know why they need taxpayer gifts.

    • WMD

      Your own post helps prove my point.

      Discussing a bipartisan tax package in 2008 that included eliminating the Section 199 manufacturing deduction for major oil and gas companies, CongressNow reported that Sen. Chuck Grassley defended the provision as proper because the bill’s approach ‘reflects the principle that tax-related offsets should be used for tax relief and not more spending.’”

      As I have said numerous times, many of the tax treatments used by the oil industry are available to ALL manufacturers. Rule 199 is exactly that. Oil companies take crude oil and manufacture gasoline, kerosene, heating oil, etc from it. Why should they be taxed differently on their manufacturing activity than say Apple which takes plastic, metal, glass and petroleum and makes an iPad out of it.

      My original comment to SomervilleTom was that the oil Industry gets no subsidies. And guess what? The oil industry gets no subsidies.

  15. Climate Change and Republicans

    One of the key issues mentioned in the study was climate change. There are some Democrats in the pocket of their local fossil fuel industry, but the Republican Party has no equivalent when it comes to outright mass rejection of science and refusal to take responsibility for crafting any real policy to combat global warming. Time and again we’ve seen the I don’t know nothing approach adopted by those like Mitt Romney and Charlie Baker who decide they have to abandon reality to cater to their base. Then there is our stand-up Senator Scott Brown who shows his courage by trying as hard as possible to say nothing about climate change.

  16. I see, so your argument is based on fairness.

    If other multinational corporations get subsidies then why shouldn’t oil?

    First of all these are subsidies because they do not apply to all businesses; only these:

    •Manufacturing based in the United States,
    •Selling, leasing, or licensing items that have been manufactured in the United States,
    •Selling, leasing, or licensing motion pictures that have been produced in the United States,
    •Construction services in the United States, including building and renovation of residential and commercial properties,
    •Engineering and architectural services relating to a US-based construction project,
    •Software development in the United States, including the development of video games.

    Since the government forgoes revenue that would have been collected had there been no special legislation and must make up those revenues through higher taxes on other economic activities, these policies have real costs. Real costs shifted to the tax payer.

    Secondly, are you going to argue that the other tax breaks in my post are not specific to the oil industry? Really?

    Finally, you have not answered this:

    Now explain please why an industry where the 3 largest U.S. oil companies made $80 billion in profits, the top 5 made $137 billion in profits needs a $4 billion tax break (or whatever you want to call it?)

    Industry leaders even admit they don’t need them, and they certainly do nothing to lower gas prices.

    Bradm – you don’t know what you are talking about.

  17. You said:

    “As for that being “treatment that differs from that applied to other industries” that is true. Tax rules for oil and gas companies differ from those on retail stores, law firms, banks and scores of other industries.”

    That is a subsidy.

    • Well let's look at that.

      Somebody who dies with an estate of $400,000 is taxed at a lower rate than someone who dies with an estate of $10 million. By your argument the former has received a subsidy.

      By your argument, Warren Buffett receives a subsidy.

      I never suggested that the oil industry needs a $4 billion tax break. I said they receive no subsidies.

      Perhaps you can tell me why an industry that manufactures gasoline should be taxed at a higher rate than a company that manufactures clothing, computers or airplanes?

      There may be a rational argument for that but no one here has made it.

    • That is a subsidy.

      Not necessarily. There may be deductions and tax treatments available to other industries that aren’t available to oil and gas companies which could force them to payer higher taxes.

  18. Changing the subject bradm?

    That is not my argument. But you stick to your guns…I think you got a winner there.

    • No WMD

      My subject was…

      The oil industry gets no subsidies.

      Farming gets subsidies.
      Ethanol gets subsidies.
      Green energy gets subsidies.

      Name a direct payment from the US Government to the Oil Industry (aside from what they get for researching Green technologies.

      Name a specific tax break that the oil industry gets that other mining and/or manufacturing companies don’t. Oil companies get to accelerate certain deductions but over the long term still pay the same taxes.

      If you can’t, then tell me why a company that manufactures gasoline should not get the same tax treatment that a company that manufactures cell phones get?

  19. Brad

    Do you think oil companies should get a $4b tax break?

    Subsidy – Monetary assistance granted by a government to a person or group in support of an enterprise regarded as being in the public interest. I never said anything about cash payments from the government. They got the subsidies when oil was under $55/ barrel. Now its not.

    • WMD

      Oil companies manufacture petroleum products. They should be treated as any other manufacturing company as in fact they are. If that means they get what you characterize as a tax break and further define as a subsidy, then yes.

      The oil and gas industry has lower profit margins (net profits as a percentage of revenues) than industry aver in general and other manufacturing industries in particular. I don’t think they should lose tax and accounting treatments that other manufacturers receive.

      If there are tax treatments specific to the oil and gas industry that allow them to reduce their tax burden then yes, I would favor repealing those provisions.

  20. I'm convinced...

    .. after carefully reading all the posts in this thread and (attempting to) follow all the many twists and turns, I’m convinced that Bradm is a Zen Master: he has truly mastered the art of one-hand clapping as well as not hearing the tree fall in the forest. His grasp into, and past, the duality of all things surpasses that of even the great tri-partite buddha of elegance, Larry Moe and Curly, and might even presage the second coming of Shemp.

    After deep study and meditation on the question of tax subsidies for oil companies alone, I was able, thanks to the the koan like qualities of his argument, to actually scratch my own left buttock with my right elbow. That’s how enlightened I was. I know, right…? WOW… is all I can say.

    It is also clear that he’s spent some time in at the Shaolin temple learning to weave yin into yang (and vice versa), because he cleverly uses our own linearity against us, time and again, in order to prove the impermanence of all things: he proves one thing, and then it’s opposite, all in the same comment, later returning to a re-incarnation of the first; truly a Zen Master.

    It is time to admit it: we have met our match. The rigidity of our beliefs and our refusal to commit to impermanence betrays our lack of insight into no-insight and we are doomed to forever live in a world where black is not white (and vice versa). All we can do is thank him for his patient attempts to enlighten us. I, for one, have a well scratched left buttock for which I will be grateful.

  21. What a bag of snakes!

    Jeebus

  22. A partial list of tax subsidies unique to the oil industry

    Percentage depletion allowance
    Marginal oil well incentives
    Enhanced oil recovery credits
    Intangible Drilling Costs expensing
    Deduction for tertiary injectants
    Exception from passive loss limitations for oil and gas
    Oil and gas excess percentage over cost depletion
    etc, etc and on and on…

    • Percentage depletion allowance

      From the Cornell University School of Law Legal Information Institute:

      In the case of the mines, wells, and other natural deposits listed in subsection (b), the allowance for depletion under section 611 shall be the percentage, specified in subsection (b), of the gross income from the property excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect of the property.

      So the percentage depletion allowance doesn’t apply only to the oil and gas industry but rater to any mining and in certain cases manufacturing industries.

      Sorry. I don’t have time to debunk your entire list. Maybe you could do some research, clean it up and get back to me.

  23. That will never happen

    but we’re glad you’re on the case!

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