Following up on Dana's blog last night about President Bush's promised veto of energy legislation moving through Congress, Donny Shaw over at Open Congress provides an excellent rundown of the key arguments from opposing sides on this bill. The main reason the legislation has generated so much controversy is that it would repeal tax breaks for oil and gas companies who drill on public-owned coastal waters. What is disturbing is that the tax incentives given to the oil and gas companies don't work. A New York Times article from 2006 details an report produced by the Department of the Interior that found the incentives would only marginally increase production of oil and gas over the next 40 years or so - about 300 million barrels (or about 1 percent) more over that time than if the incentives did not exist. Increases in gas production would be even less - closer to half of one percent. But the costs are enormous - between $40 and $50 billion less in royalty payments to the government for drilling on public land. And as we've noted before (here and here) the Department of the Interior has already screwed up collecting the royalties it should receive under this program, allowing oil and gas companies to keep tens of billions of dollars that should have been put to public use - not private profit. And those profits are still rolling in. Most large energy companies who benefit from this tax break are not hard up for cash to invest in drilling and expansion of production, particularly oil companies. ExxonMobil made over $40 billion in profit in 2007 - the most ever by a U.S. company. Do we really need to be mitigating the risk for oil exploration for a company so flush with cash that is almost definitely going to explore anyway? Is that the best use of federal resources that belong to us all? The president's veto threat also brings into question his often-stated goal that the federal government should not spend public dollars on program that don't show results. This particular program has shown, based on the government's own studies, to be wasteful and unsuccessful. Why then is Mr. Bush threatening to veto a bill ending the program and shifting those resources to generating production of reneweable energy? (Btw, the oil and gas industry contributed $2,596,725 to the president's 2004 campaign in total. Hmmm...) Image by Flickr user xitus used under a Creative Commons license

Every year, the Bush administration's annual budget volume includes a section entitled Budget Process Reforms -- which sets out a series of initiatives similar one year to the next, generally self-serving to the executive branch, and not seriously pursued with the legislative branch (see, e.g., Budget Reform Proposals-in-Wonderland").

PGL at Angry Bear flags this Dean Baker post in which Baker notes that We will almost certainly end the Bush years with a higher debt to GDP ratio than we had at the start of the Clinton presidency. That is not a disaster, but the next administration will not have the luxury of allowing the debt to increase in the same way. PGL includes a version of this chart and comments: (click on image to enlarge)

Economy -- Wholesale Prices Highest Since 1981: The Labor Department said yesterday that wholesale prices rose 1 percent in January, a 7.4 percent jump from January 2007... The last time wholesale inflation over 12 months was higher than 7.4 percent: October 1981. Story.