Congress Punishes American Oil and Rewards Hugo Chavez

Steve Forbes writes a cautionary piece at RealClearPolitics warning of Congress' hairbrained scheme to punish American oil companies and reward companies owned by foreigners, including Hugo Chavez' Citgo:

In a relentless resolve to craft national energy policy, House Democrats last week passed an energy tax bill for the third time and the bill is headed to the Senate. With oil clearing the $100 benchmark and ongoing instability in key oil producing regions of the globe, politicians in Washington want credit for some form of energy legislation, even if it is wrong for the country. What Congress has really concocted is a transfer of wealth scheme that raises taxes on oil companies to provide subsidies to "alternative energy." The bottom line on their latest energy fiasco is that it raises taxes on select oil companies, spares foreign oil companies the same tax increases and hands over subsidies to some of the largest companies in the country who will benefit from the "renewable" tax credits.

This $18 billion tax increase concocted by Congress includes a provision that takes away a manufacturing tax credit - which companies across the board can use - from only the five largest oil companies. As bad as it is to raises taxes for the energy industry during an economic slowdown, a tax increase that's only aimed at specific companies undermines energy security by putting a handful companies at the mercy of competitors across the globe.

Even more outrageous, foreign oil companies, including Citgo, owned by the government of Venezuela, will not lose the deduction. In other words, foreign oil companies with US production will actually pay a lower tax rate than American companies. How can members of Congress support legislation that will reward companies such as Citgo, while placing U.S. companies at a competitive disadvantage? In their zeal to punish "big oil" members of Congress have made a mockery of our energy policy.

If congressional leaders succeed in this approach, it will set a terrible precedent for greedy politicians to start targeting specific companies as their source of revenue. Energy policy is not a game of diplomatic dodge ball - the federal government can not pick and choose winners and losers.

The intent of these tax hikes is to promote "alternative energy." What few in Congress have talked about is that millions in subsidies will go to large and successful companies. These companies have been at the forefront of the lobbying campaign for this legislation. So despite all the talk of promoting renewable and alternatives, it's nothing more than another congressional debacle to transfer wealth to favored interests.

Oil closed yesterday at $105 a barrel, a price considered unthinkable just a few years ago. Instead of opening exploration in our own areas like ANWR or in offshore tracts where we know there's oil, the Dem-run Congress continues to keep our own oil off limits while pouring money into alternative energy schemes which are unproven and incredibly wasteful. If our economy is suffering from the effects of high oil prices, you can put the blame squarely at the feet of the Democrats.