Senate Republicans Want Bailout for Big Oil

Why are Senate Republicans trying to bail out Big Oil?

My colleague Ann Carlson explains:

[O]ne of the most audacious political stances I’d seen in many years was the Republican position — dreamed up by GOP  pollster Frank Luntz —  that a tax on big banks was actually a big bank bailout.  Converting a tax to a government bailout was pure political chutzpah, and some sick form of genius. 

Now it’s the Democrats’ turn to cry bailout.  Several Democratic Senators — Lautenberg and Menendez from New Jersey, Nelson from Florida — have proposed raising the amount of liability insurance an oil company must carry for spill coverage from $75 million to $10 billion.  Senator Lisa Murkowski (R-Alaska), a huge supporter of oil drilling, has apparently blocked the bill.  She’s  instead proposed charging an additional penny a barrel of oil to provide increased funding for the federal oil spill response fund.    So aren’t the Republicans now in favor of a big bailout for big oil?

This should be the ad from the DNC all over the web.  No, I’m not holding my breath.

It actually makes sense to impose taxes to pay for anticipated environmental costs.  But the GOP’s attacks on climate change regulation and their complete mendacity on financial regulation give me less scruples about such things.

Author: Jonathan Zasloff

Jonathan Zasloff teaches Torts, Land Use, Environmental Law, Comparative Urban Planning Law, Legal History, and Public Policy Clinic - Land Use, the Environment and Local Government. He grew up and still lives in the San Fernando Valley, about which he remains immensely proud (to the mystification of his friends and colleagues). After graduating from Yale Law School, and while clerking for a federal appeals court judge in Boston, he decided to return to Los Angeles shortly after the January 1994 Northridge earthquake, reasoning that he would gladly risk tremors in order to avoid the average New England wind chill temperature of negative 55 degrees. Professor Zasloff has a keen interest in world politics; he holds a PhD in the history of American foreign policy from Harvard and an M.Phil. in International Relations from Cambridge University. Much of his recent work concerns the influence of lawyers and legalism in US external relations, and has published articles on these subjects in the New York University Law Review and the Yale Law Journal. More generally, his recent interests focus on the response of public institutions to social problems, and the role of ideology in framing policy responses. Professor Zasloff has long been active in state and local politics and policy. He recently co-authored an article discussing the relationship of Proposition 13 (California's landmark tax limitation initiative) and school finance reform, and served for several years as a senior policy advisor to the Speaker of California Assembly. His practice background reflects these interests: for two years, he represented welfare recipients attempting to obtain child care benefits and microbusinesses in low income areas. He then practiced for two more years at one of Los Angeles' leading public interest environmental and land use firms, challenging poorly planned development and working to expand the network of the city's urban park system. He currently serves as a member of the boards of the Santa Monica Mountains Conservancy (a state agency charged with purchasing and protecting open space), the Los Angeles Center for Law and Justice (the leading legal service firm for low-income clients in east Los Angeles), and Friends of Israel's Environment. Professor Zasloff's other major activity consists in explaining the Triangle Offense to his very patient wife, Kathy.

4 thoughts on “Senate Republicans Want Bailout for Big Oil”

  1. Ok, I'm somewhat confused. (Not an unusual state, of course…) How did a "tax on big banks" inflate the budget deficit, and increase the liquidity of selected banks? Generally you'd expect a tax to involve money flowing in the OTHER direction, no?

    Ah, I see: A bit of searching reveals that Obama has proposed a tax to pay for the bailout. (Not that the revenues generated would be used to pay off the borrowing which funded the bailouts, or refunded to the taxpayers. No, they'll just be used for increased spending in other areas…) You realize that this does not convert the bailout itself, retroactively, into a "tax"?

  2. The real corker from Senator Murkowski was the line about how raising the liability limit would be a hardship on "mom and pop" oil drilling operations. Picture Grant Wood's American Gothic couple, grease smudged standing in front of an oil rigg. Mom and pop indeed.

  3. For the record, it appears that it was not Sen. Murkowski but Sen. Menendez who used the "mom and pop" phrase, mocking Murkowski's objection to the bill on behalf of smaller, independent drilling companies: "This isn't mom and pop in the grocery store around the corner," he said, pointing out that some are $40 billion/year businesses.

  4. Murkowski's proposal has slipped a decimal place. Her tax of one cent per barrel on US production would yield roughly $30 million per year. That would fund one $300 million clean-up in each decade … perhaps 10% of an Exxon Valdez's or Deepwater Horizon's clean-up cost. If she were serious, she would be calling for at least a ten-cent per barrel clean-up tax.

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