At a Capitol Hill press conference with Sen. Jim DeMint (R-S.C.), Sen. Mike Lee (R-Utah), and Sen. Ron Johnson (R-Wisc.), House Rep. Mike Pompeo (R-Kan.) introduced his legislation, which mirrors that currently in the Senate, to repeal all energy tax credits.
The federal government must “stop picking winners and losers, stop supporting multi-million dollar, billion -dollar boondoggles, things like Solyndra, companies that simply can’t survive in the marketplace on their own,” said Sen. Johnson.
Rep. Pompeo said, “We have been uniform and broad and favor no one. We are literally trying to get the federal government’s tax code out of the business of picking winners and losers.”
“It’s time for these industries to compete, to enter their products into the marketplace, and convince customers that the energy that they provide is something that they can afford and they want,” he said.
On Tuesday, Chu had testified at a House hearing that the goal of the Obama administration was not to lower gasoline prices but that “the overall goal is to decrease our dependency on oil, to build and strengthen our economy. We think that if you consider all these energy policies, including energy efficiency, we think that we can go a long way to becoming less dependent on oil and [diversifying] our supply and we’ll help the American economy and the American consumers.”
The GOP congressmen also noted that Obama, as a presidential candidate, told the San Francisco Chronicle in 2008 that “electricity prices will necessarily skyrocket” under his plan to implement cap and trade.
“Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it -- whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers,” Obama said at the time.
Senator DeMint conceded that the proposal by Rep. Pompeo in the House as well as its companion in the Senate – the Energy Freedom and Economic Prosperity Act -- have little chance of being signed by President Obama, but he stressed the importance of raising awareness about the amount of credits in the federal tax code.
“A lot of you are probably wondering why we would we do this, this year when we know this president is going to talk about tax reform and eliminating loopholes, but he’s not going to sign it,” said DeMint.
Given the current high price of gasoline – an average $3.73 per gallon unleaded – Obama has criticized oil companies and Democrats in Congress have blamed oil speculators. Obama has called for ending all credits and subsidies to the oil and gas industries.
In a Mar. 1 statement, the American Petroleum Institute, which represents 490 oil and natural gas companies, said, “It is factually wrong for the president to say that the industry receives ‘subsidies.’ A subsidy is a direct payment of money to a person or business by American taxpayers. The president has it backwards, our industry pays the government $86 million a day—the biggest contributor of government revenue than any other industry in the United States.”
DeMint also said that the bill to end all energy tax credits would not affect government grants for energy research or the tax deductions available for industries other than energy.
First introduced in the House by Rep. Pompeo last May, the Energy Freedom and Economic Prosperity Act is now under review in the House Ways and Means Committee. The Senate bill was introduced by DeMint and Lee earlier this month.
If implemented, the legislation would repeal all energy tax credits and re-allocate federal money towards reducing the corporate tax rate, making it revenue neutral. Some of the tax credits subject to repeal include credits for the production of electric and fuel cell vehicles, clean coal and enhanced oil recovery.