Hatch Rails Against Energy Tax Hike Bill

Partisan Legislation Fails to Address Energy Crisis; Lower Prices at the Pump

WASHINGTON – In a speech on the Senate floor today, U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, railed against partisan legislation that fails to address the current energy crisis and lower prices at the pump for American consumers. The Senate is slated to vote on an energy tax bill, S. 940, that would hit American energy producers with a $21 billion tax hike later today.

Below are excerpts of Hatch’s speech:

On Attempting to Raise Taxes in the Name of Deficit Reduction:
“And for what it is worth, this bill won’t help pay down the deficit either. Nothing in this bill mandates that these new revenues would be dedicated to deficit reduction. In fact, any net revenue increase in this bill would be set aside, and added to what we call savings on OMB’s PAYGO scorecard, revenue that can be used to pay for future legislation. So let’s be clear about what is going on here. Democrats want to increase taxes to pay for more government spending. They have been refreshingly open about their intentions.”

On the Obama Administration’s War On Energy:
“But what it does manage to do is gloss over the Obama administration’s war on energy. The ugly truth here is that this Administration, abetted by congressional Democrats, has an energy policy designed to increase costs, at the same time that it purports to stand shoulder to shoulder with working families that can’t make ends meet because of those increased energy costs. This is the President’s Energy Secretary Steven Chu. Somehow we have to figure out how to boost the price of gasoline to the levels in Europe. The administration is talking out of both sides of its mouth.”

Why S.940 is Bad Policy:
S. 940 is terrible policy, in a long line of terrible policies. It is lousy energy policy.
And it is lousy tax policy. Increasing taxes on American production will only stifle our economy. If Democrats want to have a conversation about tax policy and tax reform, we are ready to have that conversation. But we should not be exercising our power to tax in a punitive way that singles out particular industries.

Fortunately, I don’t think that the American people are going to buy this latest installment of Let’s Raise Some Taxes. This bill that we are debating today will not do anything to address high gas prices, and its Democratic supporters have acknowledged this. But what it will do is raise revenue for the government to spend. Yet again, the party of big government has proposed additional taxes to fund that big government.

On the Adverse Economic Impact of High Prices at the Pump :
“The issue of high gas prices is much greater than the price at the pump. The Joint Economic Committee concluded that the weak U.S. dollar has added 56 cents to every gallon of gas. This is a drag on a fragile economic recovery. It inflates the prices of everything from groceries to school supplies. Just recently we found out that 1 in 7 Americans are on food stamps. One writer has dubbed this the Food Stamp Recovery. And this weak recovery is made weaker by high gas prices.”

On Lowering Prices at the Pump:
“Americans are rightly upset about the cost of gasoline. But the solution to higher gas prices is not to raise taxes. Raising taxes on domestic energy producers might be good for Hugo Chavez, but it does nothing to lift the burden of increasing gas prices that is afflicting the American economy and working families. Under this bill Hugo Chavez’s Citgo would receive a tax incentive while U.S. companies like Exxon and Chevron would not.”

Below is the text of Hatch’s full speech delivered on the Senate floor this afternoon:

Mr. President, today we are discussing a bill to raise taxes. According to the Joint Committee on Taxation, S. 940 will raise taxes by $21 billion over 10 years.

And what provoked this bill to raise taxes?

This time it was high gas prices.

I wish I could say that I am surprised, but since Democrats took control of this chamber, and since President Obama was elected, this seems to be a recurring theme.

No matter the question, the answer always seems to be — raise taxes.

There is rarely any consideration of how this impacts the economy, businesses, and families that have to shoulder this load.

My colleagues on the other side of the aisle too often look at working men and women as an endless source of cash that Washington can rely on for more government programs.

The Democratic Party’s emblem is a donkey.

Sometimes I think they would be better off transitioning to a one-trick pony.

The Democratic bill that we will be voting on later today is called the Close Big Oil Tax Loopholes Act.

That is certainly one message-tested name.

Big oil — CHECK!

Tax Loopholes — CHECK!

Again, never underestimate the left’s ability to underestimate the American people. They think that just because citizens are angry at high gas prices that they will run off the cliff and support a measure just because it mentions big oil and tax loopholes.

I can tell you that the people of Utah will not support this bill. And the American people won’t either. The American people want and need energy solutions.

According to a USA Today / Gallup poll, 7 out of 10 Americans say that gas prices are causing financial hardship. FedEx and UPS have increased fuel surcharges from 6.5 percent to 8.5 percent. By the time 2011 ends, expect restaurant prices to be 3 percent or 4 percent higher, according to the U.S. Department of Agriculture.

The issue of high gas prices is much greater than the price at the pump. The Joint Economic Committee concluded that the weak U.S. dollar has added 56 cents to every gallon of gas. This is a drag on a fragile economic recovery. It inflates the prices of everything from groceries to school supplies. Just recently we found out that 1 in 7 Americans are on food stamps. One writer has dubbed this the Food Stamp Recovery. And this weak recovery is made weaker by high gas prices.

And to deal with this?

Democrats decide that rather than promote a sensible energy policy, it is better to score a few cheap points at the expense of politically unpopular oil companies.

Americans are rightly upset about the cost of gasoline.

But the solution to higher gas prices is not to raise taxes. Raising taxes on domestic energy producers might be good for Hugo Chavez, but it does nothing to lift the burden of increasing gas prices that is afflicting the American economy and working families. Under this bill Hugo Chavez’s Citgo would receive a tax incentive while U.S. companies like Exxon and Chevron would not.

I was amazed to see the advocates of this legislation admit as much during a hearing on this matter last week in the Finance Committee. One after one, my Democratic colleagues acknowledged the obvious. The policies that they were proposing — higher taxes on oil companies — had nothing to do with energy policy or sound tax policy, and everything to do with generating more revenue for more government spending. They acknowledged that this legislation would do nothing — I repeat — nothing to lower the price of gas at the pump.
I can now see why Sen. Landrieu and Sen. Begich called this tax increase proposal a “gimmick” and “laughable.”

Raising taxes will do nothing to lower the cost of fuel.

And for what it is worth, this bill won’t help pay down the deficit either.

Nothing in this bill mandates that these new revenues would be dedicated to deficit reduction. In fact, any net revenue increase in this bill would be set aside, and added to what we call savings on OMB’s   PAYGO scorecard, revenue that can be used to pay for future legislation.

So let’s be clear about what is going on here. Democrats want to increase taxes to pay for more government spending.

They have been refreshingly open about their intentions. One of my colleagues stated that this bill will allow us to spend money on cops and kids. Another said that it will “raise a significant amount of additional revenue for important projects in the United States of America.” But the choice here is not lower taxes versus assistance for public safety and children.

If Democrats want to pay down the deficit, and have money for essential projects, there are plenty of options available besides increasing taxes.

My colleague from Oklahoma, Dr. Coburn, has led a one man crusade to identify hundreds of billions of dollars in wasteful and redundant government spending. If the entire Democratic caucus spent even half the time investigating wasteful government spending as it does looking through the Internal Revenue Code for ways to increase taxes, our fiscal situation would be much better.

Make no mistake that this bill is a tax increase on American jobs.

Under this proposal, there is a disincentive for domestic energy producers to invest in the United States. And under this proposal, American corporations will be at a competitive disadvantage with their foreign counterparts.

Sometimes we talk ephemerally about the impact of tax increases on the economy.

In practice, this bill is a direct assault on American jobs.

And for what?

It does not do anything to bring down the cost of energy.

And it does not do anything to bring down the deficit.

But what it does manage to do is gloss over the Obama administration’s war on energy.

The ugly truth here is that this Administration, abetted by congressional Democrats, has an energy policy designed to increase costs, at the same time that it purports to stand shoulder to shoulder with working families that can’t make ends meet because of those increased energy costs.

This is the President’s Energy Secretary Steven Chu.

Somehow we have to figure out how to boost the price of gasoline to the levels in Europe. The administration is talking out of both sides of its mouth.

At the same time that it feigns sympathy for the families hit hardest by rising energy prices, it attempts to impose a radical environmental agenda on an unwilling middle class.

At the same time that American families move to the suburbs so they can have room to grow and play — buying minivans and SUVs to accommodate their growing families — the environmental left is pushing its agenda of urban living, public transportation, and small families.

For all of its righteous anger about high gas prices, it is clear from its policies where the administration stands in this fight.

As a senator who has worked hard to establish a strong energy foundation for America, I have watched with dismay as President Obama has done everything in his power to tear that foundation up, aggressively stop domestic energy production, and leave our nation vulnerable to our foreign competitors who are smart enough to develop their own energy resources. Since taking office President Obama has cut new energy leases by more than 60 percent in this country and by more than 80 percent in the state of Utah!

We are all aware of the President’s efforts to forestall domestic energy development offshore, but less media attention has been given to his successful efforts to move the energy industry off of our federal lands in the Intermountain West. The Department of the Interior oversees more than 42 percent of the State of Utah, including much of the land where domestic energy production is pursued. One of the early moves of Secretary of the Interior Ken Salazar was his controversial withdrawal of energy leases that had already been auctioned off and paid for by energy developers.

Mr. President, this was a terrible signal to our domestic energy producers, and companies are now leaving our federal lands in droves, seeking a less hostile regulatory environment on private, state, and foreign owned lands. A recent survey showed that in the absence of federal constraints, energy companies would be investing an additional $2.8 billion in the Rockies.

Mr. President, S. 940 is terrible policy, in a long line of terrible policies.

It is lousy energy policy.

And it is lousy tax policy.   Increasing taxes on American production will only stifle our economy. If Democrats want to have a conversation about tax policy and tax reform, we are ready to have that conversation. But we should not be exercising our power to tax in a punitive way that singles out particular industries.

Fortunately, I don’t think that the American people are going to buy this latest installment of Let’s Raise Some Taxes.

This bill that we are debating today will not do anything to address high gas prices, and its Democratic supporters have acknowledged this.

But what it will do is raise revenue for the government to spend.

Yet again, the party of big government has proposed additional taxes to fund that big government.

You see, the deficit is not the Democrats’ problem.

No.

For the Democrats, the deficit is always someone else’s problem. It is the fault of businesses or individual citizens for not doing their fair share or accepting their shared responsibility to fund this government.

The American people deserve better than this bill.

I urge my colleagues to vote against the motion to proceed to S. 940 and to support the motion to proceed to S. 953 when we take it up tomorrow.

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