GOP Budget passes House and Big Oil tax breaks will never end

[Hidole555]

[B]WASHINGTON (CNN) [/B]-- The Republican-controlled House of Representatives on Thursday passed the GOP leadership's 2013 budget plan -- a measure that has no chance of passing the Democratic-controlled Senate but creates a clear contrast between the two parties on a number of critical tax and spending issues ahead of the general election.

The resolution passed in a strongly polarized 228-191 vote. No Democrats backed the measure; only 10 Republicans opposed it.

House Budget Committee Chairman Paul Ryan's $3.53 trillion blueprint includes an overhaul of the nation's tax code and major changes to popular entitlements such as Medicare -- expensive programs that in the past have been considered politically untouchable.

[URL="http://www.cnn.com/2012/03/29/politics/balanced-budget/index.html"]Why the budget may never be balanced[/URL]

Republicans say the plan is necessary to slow the growth of exploding federal deficits and put the federal government on the road to fiscal stability.

"We have one of the most predictable economic crises in this country coming. It's a debt-driven crisis. And so we have an obligation -- not just a legal obligation but a moral obligation -- to do something about it," Ryan, a Wisconsin Republican, said Thursday morning. GOP leaders "think the key components are to get spending under control, reform our entitlement programs" and help stimulate economic growth.

Democrats, however, consider the plan a betrayal of last year's bipartisan deficit reduction deal and a GOP giveaway to the wealthy at the expense of the middle class and vulnerable seniors.

"In our view, we certainly don't want to return to some of the economic policies that got us into the mess to begin with. And we are concerned that the Republican budget does that," said Maryland Rep. Chris Van Hollen, a member of the House Democratic leadership. "It disrupts the fragile recovery and undercuts investments that are going to be important for the long-term economic strength of the United States of America."

White House Press Secretary Jay Carney released a statement after the vote blasting House Republicans for banding "together to shower millionaires and billionaires with a massive tax cut paid for by ending Medicare as we know it and making extremely deep cuts to critical programs needed to create jobs and strengthen the middle class."

[URL="http://www.cnn.com/2012/03/29/politics/campaign-wrap/index.html"]Romney garners two endorsements[/URL]

Over the past two days, the sharply divided House has overwhelmingly rejected President Barack Obama's budget proposal, a House Democratic plan, a more conservative Republican alternative, and a bipartisan blueprint containing controversial spending cuts and tax hikes opposed by majorities in both parties.

The blueprint -- derived from proposals advanced by a special commission led by former Clinton White House Chief of Staff Erskine Bowles and former Wyoming GOP Sen. Alan Simpson -- includes roughly $2 trillion in cuts and more than $1 trillion in new tax revenues over the next decade. The measure failed in a 382-38 vote.

While a budget resolution is not binding, it is used to guide congressional appropriators responsible for allocating federal dollars. Both chambers of Congress have not agreed on such a measure since the spring of 2009.

Among other things, the Ryan plan calls for a reduction in individual tax rates and brackets. Instead of today's six brackets, with rates from 10% to 35%, it calls for just two: 10% and 25%. The proposal would eliminate the alternative minimum tax while dropping the top corporate tax rate from 35% to 25%.

GOP leaders would compensate for lost revenue by closing a series of tax loopholes and ending numerous deductions. They have declined to offer any details, however, on exactly which loopholes and deductions would be affected, instead insisting that the matter will be taken up at the congressional committee level in the future.

Returning to one of the most controversial points from last year's budget fight, the proposal includes dramatic changes to the Medicare program. It would offer future seniors a choice of staying in the traditional fee-for-service plan or opting instead for a Medicare-approved private plan, all of which would be available via a new Medicare exchange.

No matter which plan they chose, including the traditional Medicare plan, seniors would receive a government subsidy to help pay for their choice.

While Republicans insist the change is necessary to ensure the program's long-term fiscal viability, Democrats accuse the GOP of trying to destroy a key legacy of President Lyndon Johnson's Great Society.

The Republicans "want Medicare to wither on the vine, to die," House Minority Leader Nancy Pelosi, D-California, said this month.

Medicaid, which provides health coverage for the poor, would be converted under the GOP plan into a series of block grants for states. Individual states would be empowered to tighten eligibility rules or revise enrollees' cost-sharing obligations.

The GOP proposal also protects defense spending by undoing a scheduled $55 billion cut in the Pentagon budget, replacing the reduction with cuts elsewhere. Ryan has previously called the scheduled Pentagon cuts -- part of the agreement reached in last summer's Budget Control Act -- "devastating to America's defense capabilities."

On Thursday, Ryan said senior military officials defending lower Pentagon spending proposals have not been honest.

"We don't think the generals are giving us their true advice," he said, accusing them of following an administration line. "I think there is a lot of budget smoke and mirrors in the (administration's) Pentagon budget, which is not really a true, honest and accurate budget. When you confront military experts -- retired or active -- they concede these things to us."

Republicans would compensate for higher defense spending in part by requiring greater federal worker pension contributions and more means-testing of entitlement benefits.

Overall, Ryan's plan caps 2013 domestic discretionary spending -- programs other than entitlements such as Social Security and Medicare -- at $1.028 trillion. Democrats immediately cried foul when the new proposed cap was unveiled, noting that it's nearly $20 billion below the total agreed to in last summer's deficit reduction deal.

House GOP leaders insist they can propose any amount under the $1.047 trillion level, because that figure simply represents the top limit for discretionary spending, not a level up to which Congress must spend.

While the House Republicans' proposed budget has no chance of becoming law, it could have a significant impact on this year's presidential and congressional campaigns. Democrats believe the proposed Medicare changes in particular could damage GOP hopes in key swing states such as Florida, which has a large elderly population.

Numerous Republicans, however, believe they'll be rewarded for having the political courage to tackle politically sensitive issues. They also argue that it's important to draw clear distinctions with Democrats before voters go to the polls in November.
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[B]Washington (CNN) [/B]-- Senate Republicans on Thursday blocked a Democratic measure championed by President Barack Obama to end tax breaks for the major oil companies.

The procedural vote of 51-47, which failed to reach the needed threshold of 60 in favor, killed the measure, which was given little chance of eventually winning approval in the Republican-controlled House. Four Democrats opposed the bill while one Republican supported it.

Obama and Democrats had pushed it in an attempt to gain political advantage as rising gas prices continue to hurt and anger American voters in an election year.

In remarks shortly before the Senate voted, Obama said the nation will be watching to see where Congress stands on the issue.

"With record profits and rising production, I'm not worried about the big oil companies," Obama said in the White House Rose Garden. "... I think it's time they got by without more help from taxpayers, who are having a tough enough time paying their bills and filling up their tanks."

After the vote, White House Press Secretary Jay Carney labeled the result "unfortunate."

[URL="http://politicalticker.blogs.cnn.com/2012/03/29/cnn-poll-americans-increasingly-worried-about-gas-prices/?iref=allsearch"]Poll: Americans increasingly worried about gas prices[/URL]

[URL="http://i2.cdn.turner.com/cnn/2012/images/03/29/rel3e.pdf"]A CNN/ORC International poll (PDF)[/URL] released Thursday shows a majority of Americans blame oil companies -- rather than the Obama administration -- for the high gas prices.

According to the survey, conducted last weekend, seven in 10 Americans say rising gas prices have caused hardship for them and their families.

Obama's energy policy, which emphasizes investment in alternative sources, has repeatedly been attacked by Republicans as contributing to high gas prices and stunting domestic oil development.

The president has targeted the roughly $2 billion a year in tax breaks and subsidies for oil companies as a potential new revenue source for clean energy development.

In his remarks Thursday, Obama emphasized steps his administration has taken to boost domestic oil and natural gas production, seeking to deflect the GOP criticism. He said that now is the time to choose whether to continue to give unneeded subsidies to a thriving industry or to make critical investments in other energy sources.

"Instead of taxpayer giveaways to an industry that's never been more profitable, we should be using that money to double down on investments in clean energy technologies that have never been more promising," Obama said. "Investments in wind power and solar power and biofuels; in fuel-efficient cars and trucks and homes and buildings. That's the future. That's the only way we'll break this cycle of high gas prices that happens year after year after year as the economy is growing."

To end his statement, Obama declared his belief in the nation's ability to rise to any challenge and become the leader of a new global energy industry in the coming century. He framed the oil subsidy vote as a choice between that vision and protecting the status quo, adding: "Today, the American people are going to be watching Congress to see if they have that same faith."

[URL="http://www.cnn.com/2012/03/22/politics/obama-energy-tour/index.html"]Obama defends his policy on oil pipeline[/URL]

The Democratic-sponsored Senate measure -- which was opposed by most conservatives -- would have repealed subsidies currently benefiting BP, Exxon, Shell, Chevron and ConocoPhillips. Savings would have been used to renew various alternative clean energy initiatives and reduce the deficit.

Democrats sought to cast Republicans as defenders of unpopular big oil companies, while Republicans highlighted rising pump prices on Obama's watch.

Senate Minority Leader Mitch McConnell, R-Kentucky, complained Thursday morning that the upcoming vote amounted to political theater because everyone, including the sponsors, knew it would have no effect on gas prices.

"Day after day after day, Democrats ask us all to come out here, not so we can make an actual difference in the lives of working Americans and families struggling to fill the gas tank, but so we can watch them stage votes for show," McConnell said. "For some reason, they thought they could put political points on the board if the American people saw them voting for a tax hike that we all knew ahead of time didn't have the votes to pass."

His Democratic counterpart, Senate Majority Leader Harry Reid of Nevada, opened debate on the oil subsidy measure Monday by noting that big oil companies are "making money hand over fist."

"If Republicans continue to stand up for oil companies making record profits, one thing will be obvious: Republicans care less about bringing down gas prices than about helping big oil companies that don't need the help," Reid said.

He insisted that repealing "wasteful subsidies" wouldn't lead to a hike in oil and gas prices -- an assertion dismissed by Republicans.

[URL="http://www.cnn.com/2012/03/20/politics/house-energy-hearing/index.html"]Energy secretary hammered on gas prices[/URL]
Democrats have proposed "raising taxes on American energy manufacturers -- something common sense and basic economics tell us will lead to even higher prices at the pump," McConnell said Wednesday. "Frankly, I can't think of a better way to illustrate how completely out of touch they are on this issue."

Democrats have repeatedly raised the issue of whether it is appropriate to provide tax subsidies for highly profitable oil and gas companies. Legislation similar to the current bill was narrowly rejected by the Senate last May.

Among other things, the measure killed on Thursday would have ended oil production's categorization under the tax code as a form of domestic manufacturing eligible for a deduction worth 6% of net income, according to New Jersey Democratic Sen. Robert Menendez, the bill's author.

The measure also would have prevented oil companies from claiming foreign royalty payments as a credit against American taxes, and cut the ability of companies to deduct numerous costs associated with the drilling process.

"With oil prices over $100 per barrel, Big Oil does not need a taxpayer incentive to explore," Menendez's office asserted in a written statement.

Brian Johnson, a senior tax adviser at the American Petroleum Institute, which represents oil interests in Washington, told CNN the bill unfairly targeted one industry. Among other things, he noted that many industries currently qualify for the domestic manufacturing deduction at a higher rate of 9%.

"How is this a legitimate tax deduction for Starbucks or The New York Times at 9% and somehow it's a 'subsidy' for the oil and natural gas industry at a lesser 6%? The answer is it's not," he said. "We're already penalized."

Repealing the royalty payment credit would be tantamount to double taxation and could cripple American-based operations, he argued.

"Raising taxes will not lower energy prices for American families and business," the American Petroleum Institute's president, Jack Gerard, said in a written statement. "It's time to work together on a national energy strategy that focuses on developing all American energy resources."

In the short term, bills such as the one blocked on Thursday are unlikely to affect gas prices or change the market enough to shift voter attitudes, argued Joseph Stanislaw, founder of J.A. Stanislaw Group, an energy and investment advisory firm.

"The global oil market has more impact on the presidential election than the president has on the global oil market," Stanislaw said.
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[URL="http://www.cnn.com/2012/03/29/politics/house-gop-budget/index.html"]Budget Source.
[/URL][URL="http://www.cnn.com/2012/03/29/politics/oil-subsidies/index.html"]Tax Break Source.[/URL]

[B]WE. ARE. FUCKED.[/B]

[editline]30th March 2012[/editline]

goddamn I fucked up the title. can a mod remove the "is" and the extra l in Oil?

[DesolateGrun]

Nuts!

[tinhead50]

There isn't a huge problem here. While Paul Ryan's budget passed the house, it'll never go through in the senate. It will be a very long, bitter fight and will get defeated in the end.

The bigger problem is that we simply don't have a smart budget in the works at the moment.

[Brawkoli]

It's just a big bitch-fest up there, it seems like. Like the article says, it'll never get through the senate. Those guys need to get their shit together and actually cooperate and work together for once.
But that will never happen.

[Wolveras]

I wish America just followed Washington's idea of not belonging to a party when you're a president. Sadly, he's been the only president that was ever officially impartial.

[yawmwen]

Tax breaks to oil companies shouldn't end. At least, the ones already in place. I can agree with not giving them more tax breaks. However, taking away the ones they already will be like taking the working and middle classes, bending them over, and fucking them hard in the ass repeatedly.

[editline]30th March 2012[/editline]

Without lube.

[w1ldstly3]

I liked how they used the word "morals" in this article, implying republicans have any at all.

[Aide]

I hate the stupid 60 vote majority rule. It's just gonna fuck us over in the future. 51 votes that's more than half, it should of passed. but this is about the Houses aka Paul's budget.

[Ridge]

[QUOTE=I_Forgot;35357066]It's just a big bitch-fest up there, it seems like. Like the article says, it'll never get through the senate. Those guys need to get their shit together and actually cooperate and work together for once.
But that will never happen.[/QUOTE]

Seems like they worked together on another budget vote...

[url]http://thehill.com/blogs/floor-action/house/218931-house-clobbers-obama-budget-proposal-in-0-414-vote[/url]