More Good News If You’re a Wealthy Oil Guy

The energy bill passed by the House Thursday night isn’t about strengthening America’s strategic energy position. It’s about something much simpler – a gigantic giveaway to the energy industry. In an analysis released by Rep. Henry A. Waxman (D., Calif.) called “Hitting the Jackpot,” the rewards for industry are outlined. The cumulative value of the 2000 election campaign contributions by the coal, oil and gas, nuclear and utility industries – the lion’s share of which went to the GOP – was $69.5 million; the total value of the tax breaks and subsidies is $36.4 billion. . . .

With the budget surplus vanishing, this is hardly the time to be handing out billions in corporate welfare. The energy legislation passed by the House Thursday is little more than a payback to big campaign contributors. And, goodness, what a return on “investment.”

From the front page of the Wall Street Journal, July 30 (worrying whether the bond market might send interest rates back up):

The Clinton administration got rave reviews from the bond market, thanks in large part to Treasury Secretary Robert Rubin, a former bond trader and chief architect of the 1993 deficit-reduction plan [that got not a single Republican vote in Congress]. President Bush’s Treasury Secretary, Paul O’Neill, remains – at best – an enigma to Wall Street. While President Clinton made himself the chief political advocate of debt paydown, Bush officials have repeatedly found themselves in this year’s fiscal policy debates taking the side of smaller surpluses and less debt retirement than their Democratic opponents are advocating.

So here’s what may happen: Taxes will be lower, thanks to Bush’s time-bomb laden tax cut, but interest rates could well be higher, as the bond market responds to this new, less fiscally responsible course. Let’s examine the consequences. For the wealthy? SWEET! Not only does a huge slice of the ‘tax relief’ go to the wealthy, they also get paid higher ‘rent’ on the money they lend. For most people? NOT SO HOT. What little tax relief they get is wiped out by higher monthly mortgage payments and car loan payments. For low-income people? ROTTEN. They got no tax relief, yet their borrowing costs go up.

It is a grand time to be rich in America.

Republicans who feel their party is out of step on ‘social’ issues – but who stick with it anyway because it is, after all, the party of economic prudence – might rethink that and, at least temporarily, define themselves as Independents.

Yes, Democratic Congressfolk like to spend money. But so do Republicans. The difference is that often the Democrats want to spend it on things like midnight basketball, to give inner city kids a better chance to become productive citizens, while often the Republicans want to spend it on planes and warships even the Pentagon doesn’t want.

I wouldn’t argue that all Republican-initiated spending is bad and all Democratic-initiated spending is good – by any means. That would be ludicrous. But I would argue that the days are long gone when you can say the Republican platform on social issues is worth stomaching because they are the more responsible party economically. They are not. And we have the Reagan/Bush quadrupling of the National Debt – and now this astonishingly imprudent tax cut – to prove it.