As many are aware, Democrats in the congress are this week trying to shove through a massive, $3.5 trillion piece of legislation they’re calling a “budget reconciliation” bill. But it has little to do with reconciling any budget, and much to do about setting the country up for generations of un-payable debt. It is truly the Mother of all budget-busting bills.
The price tag for this bill is almost too enormous to comprehend, and far exceeds its stated $3.5 trillion. The language in the bill would in fact create a permanent increase in un-funded federal government spending that would essentially turn the country into a socialist state. The non-partisan CBO’s estimate is that, if passed in its current form, this bill would result in future budget deficits of an unimaginable scale, as much as $6 trillion annually over the next decade.
As I told the audience at In The Oil Patch Radio on Sunday, this bill would not just bankrupt your children and grandchildren; it would bankrupt their own children and grandchildren, too.
Among those hit hardest would be the oil and gas industry, which is of course a disfavored industry for the current generation of Democrats.
Below is a really good summary of some of the 2,000-page monstrosity’s worst provisions written by Tim Stewart, the President of the U.S. Oil and Gas Association. Tim’s focus is on the provisions that impact energy, so as you read this understand that it is far from a comprehensive list of all the other horrible provisions this legislation contains. This summary looks at the provisions voted out by 3 committees; understand that no fewer than 10 additional House committees have also added language into this bill.
After hundreds of hours of discussion, but very little real deliberation of what the impacts will be on future generations, the 13 different House Committees loudly congratulated themselves for meeting the artificial deadline of Sept. 15th imposed by Leader Nancy Pelosi to complete this progressive takeover of the U.S. economy.
Not a single Republican in any Committee voted to support any of the measures out of any Committee – recognizing the folly of voting for annual deficits that are projected to reach $6 trillion or higher each year by 2032.
The next step is for the House Budget Committee to take the individual titles approved by the various committees into the reconciliation bill to be matched up with the Senate, who has already taken steps to avoid the Committee process even further (thus avoiding further deliberations of exactly how bad of an idea this might be). Once this occurs later this fall, the Peloshevik Revolution will be complete.
The Green New Deal will have been fully funded and a Civilian Climate Corps will be formed and funded with $7 billion to hire woke college students with worthless degrees to a hound dog and shame the American people into compliance with the New Green Deal orthodoxy.
Here is a brief overview of the Committee action that impacts our industry. This is taken in part from Bloomberg’s analysis.
Ways and Means Committee: The Ways and Means Committee mark covers taxes, health care, drug pricing, infrastructure financing, community development, retirement, childcare, and trade etc.
Tax Increases: The Ways and Means package includes sweeping tax changes to raise revenue for other portions of the package, including:
• Raising the top marginal personal income tax rate to 39.6%, from 37%, for individuals making more than $400,000 and joint filers making more than $450,000. A 3% surtax also would be imposed on individuals with adjusted gross incomes of more than $5 million.
• Increasing the capital gains tax rate to 25% from 20% for “certain high-income individuals.”
• Replacing the flat 21% corporate income tax rate with graduated rates: 18% on the first $400,000 of income, 21% on income up to $5 million, increasing to 26.5% for income after that.
• Generally requiring investment funds to hold assets for more than five years, rather than three years, for managers to get a preferential tax rate on their share of profits, known as carried interest.
• Reinstating a 16.4 cents-per-gallon tax on crude oil and imported petroleum products to fund Superfund cleanups of hazardous sites. It also would double the tax rate on sales of certain chemicals.
• Barring taxpayers from claiming losses on digital assets, such as cryptocurrencies.
• Increasing the current rate of excise taxes on cigarettes, small cigars, and roll-your-own tobacco, as well as, on nicotine that’s been extracted, concentrated, or synthesized in tobacco products.
• Providing $78.9 billion in additional funding for the Internal Revenue Service to increase audits on wealthy individuals.
Tax Credits: Other tax provisions in the measure would reduce revenue, designed to aid certain households and industries, such as creating a refundable income tax credit for union-made electric vehicles placed into service before Jan. 1, 2027, and extending several tax credits related to renewable energy production, including the production and investment credits.
House Energy and Commerce: This Committee has broad jurisdictions including energy production and distribution and the environment. Below is a partial laundry list of the winners – the Vanguards so to speak – who have been chosen as the winners to usher in the Peloshevik Revolution.
• $150 billion for a Clean Electricity Performance Program that would charge or pay electric utilities based on the share of clean energy they supply to consumers. Utilities would be eligible for grants, if they increase the share of clean energy in their portfolios by at least four percentage points each year. Utilities that don’t meet that benchmark would pay a fee.
• $30 billion to replace every lead water service line in the U.S.
• $27.5 billion to support non-federal financing of zero-emission technology deployment.
• $18 billion to support home energy efficiency and appliance electrification rebates.
• $17.5 billion to decarbonize federal buildings and vehicle fleets.
• $13.5 billion for electrical vehicle charging infrastructure.
• $10 billion for clean-up activities at priority Superfund sites where federal agencies are the responsible parties.
• $9 billion to improve the reliability and resiliency of the electric grid.
• $5 billion for grants to replace school buses, garbage trucks, and other heavy-duty vehicles with zero-emission vehicles.
House Natural Resources Committee: This Committee oversees all federal lands onshore and offshore. This Committee was originally given $25 billion to spend but, in an effort, to kill federal onshore and offshore production, added an additional $6 billion in fees and penalties against our industry thus $31 billion over a decade for climate resilience, conservation, and other environmental initiatives.
As mentioned, the Pelosheviks believe increased fees on oil and gas companies will partially offset their spending spree.
The spending would include $9.5 billion for environmental restoration in coastal areas and around the Great Lakes, $3 billion to create a Civilian Climate Corps at the Interior Department, and $2.5 billion for cleanup activities at abandoned mines.
The revenue raisers and other provisions aimed at the drilling and mining industries would:
• Increase leasing fees and royalty rates for onshore and offshore oil and gas extraction and require royalties to be paid for methane that’s vented or flared.
• Establish an oil and gas leasing moratorium on the Atlantic and Pacific coasts and in the eastern Gulf of Mexico.
• Repeal a previous authorization for drilling in the coastal plain of the Arctic National Wildlife Refuge and void nine leases in the area issued this year.
• Increase the royalty rate paid to the federal government on mining revenue.
• Withdraw more than 1 million acres around the Grand Canyon from mineral leasing
The revenue raisers will drive the industry off public lands completely and will produce zero revenues.
House Agriculture Committee: This Committee has more modest impacts on our industry but for sake of interest the Committee will spend:
• $40 billion for forestry programs, including $9 billion for forest restoration and resilience grants and $4.5 billion for the Agriculture Department’s portion of a Civilian Climate Corps.
• $18.7 billion for rural development programs, including $9.7 billion for green upgrades to rural utilities.
• $7.75 billion for agricultural research.
We hope you find this overview helpful. Depressing but helpful. There are weeks ahead of us where we will watch how the Senate responds to the Revolutionaries. The fight is underway.
We will keep you posted.