Democrats’ Drilling Poison Pill
I knew that the Democrats’ drilling bill wouldn’t come without a poison pill. This article proves me right. Here’s what the Virginian-Pilot is reporting:
Even as House Democratic leaders handed Republicans a symbolic victory this week in their long fight for new offshore oil development, critics charged that the fine print in the plan probably will continue to keep drillers out of the Atlantic.
While lifting a 25-year federal ban on most offshore oil and natural gas drilling, the legislation would block Virginia and other coastal states from sharing in a $2.6 trillion bonanza of tax revenue expected to flow from offshore fields. A Senate bill still in the works would give states part of the money.
Unless states stand to profit from offshore development, they almost surely would exercise their right under the bill to block any drilling within 100 miles of their shores, critics of the House initiative charged.
Think of what the House Democratic leaderhip is telling “Virginia and other coastal states.” They’re saying that Alaska can keep reaping the benefits of the Alaskan Pipeline but “Virginia and other coastal states” don’t get a penny. Why shouldn’t Virginia and other coastal states be upset with the House Democratic leadership?
What’s most encouraging is that House GOP leadership has already jumped all over this stunt:
Rep. Thelma Drake, a Norfolk Republican who has taken a prominent role among pro-drilling forces, was even more critical. The new bill “appears to be little more than a political ploy,” Drake charged in a prepared statement. Democrats intend to “tell the American people that they voted to go after more American energy while winking to the environmentalists to say that this increased production will never happen,” she said.
I’d call this a ’show-and-tell’ bill. Ms. Pelosi will show the American people the pro-drilling headline, then tell her environutter campaign contributors that drilling won’t happen because states don’t have a financial interest in it.
The problem for Democrats is that Republicans will undoubtedly attempt to pass amendments that will give Virginia and other states a financial incentive. Democrats voting against that type of amendment will be exposed as being insincere about supporting drilling.
Here’s another potential powderkeg for Democrats:
House Speaker Nancy Pelosi told reporters that sharing royalties with the states would force Congress to overhaul the entire budget, an impossible task just three weeks before the beginning of a new fiscal year. Pay-as-you-go rules adopted by lawmakers require them to offset any surrender of federal revenue with cuts in spending, she said.
Republicans scoffed at the explanation, noting that Democrats have not invoked “pay-go” in signing off a multi billion-dollar bailout of mortgage giants Freddie Mac and Fannie Mae.
The tax revenues in the Democratic plan actually would be royalties paid by oil companies as part of their leasing of offshore areas. If the take was shared with coastal states, Virginia could realize $200 million annually, state Sen. Frank Wagner, a Virginia Beach Republican, has estimated.
Ms. Pelosi’s explanation is 100% spin. It’d be interesting to find out how many times Democrats had ignored pay-go since adopting that rule. I’m just guessing but I’m betting that they’ve used it to stop Republican bills more than they’ve used it to keep the budget in check. I’d further bet that Democrats have used this excuse to prevent drilling.
Their biggest problem is the Right Blogosphere and the rest of the New Media. While the NY Times and NBC News ignore the story behind the story, we won’t. We’ll spread the word that they’re playing tricks again. What makes that really tricky is that they’re playing tricks on the most important economic issue of the election cycle.
That’s as foolish as trying to triangulate on the war was for Hillary. The only benchmark that American consumers pay attention to is whether the price at the pump drops. Everything else is windowdressing.
UPDATE: I posted here about the blogger conference call I participated in. Several noteworthy things were highlighted during the call. To me, the most important thing highlighted came when Rep. Putnam said that the Gang of 10 hadn’t written any legislation, that they’d only put together talking points. He then said that it’s easy to say that they want bipartisanship but that things might get a little contentious once the legislation starts getting written. I wholeheartedly concur.
It’s always easier to agree with a generalized concept than with sticky details like an $85 billion tax increase.
Frankly, I don’t think the Gang of 16 will get everything worked out before the recess. I’m betting, too, that their legislation will be filibustered if they put it together.
Technorati Tags: Drilling, House Oil Party, Thelma Drake, Adam Putnam, Gang Of 16, Filibuster, Talking Points, Oil Exploration, Oil Production, Royalties, Incentives, Election 2008
Cross-posted at LetFreedomRingBlog