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Chris Prandoni

House Republicans Rollback Obama's Pro-Union Regulations


Posted by Chris Prandoni on Tuesday, February 14th, 2012, 1:18 PM PERMALINK


Originally Published by Townhall

After a yearlong fight, House Republicans land a blow against the politicized National Mediation Board (NMB). After assuming office in 2009, President Obama appointed two pro-union members to the three member NMB, the federal agency that oversees union-employer relations in the transportation industry. Effectively controlling the board, Obama’s Democrat appointees rewrote long-held election law to make it easier for unions to organize transportation workers. While the National Labor Relations Board’s nefarious activity has received much publicity, Obama’s regulatory overreach began with the NMB.

Since the National Railway Act’s was ratified in 1926, a union needed to receive a majority of votes from a working group in order for those workers to be unionized. After Obama’s appointees rewrote the rules with a 2010 rulemaking, unions were only required to receive a majority of all voting members’ votes. This unprecedented rulemaking threatened to disenfranchise workers and was a blatant attempt to inflate union membership numbers, and union dues.

Recognizing how problematic the NMB rulemaking was, Transportation and Infrastructure Chairman John Mica (R-Fla.) inserted a provision (Title IX) into the Federal Aviation Administration reauthorization bill that overturned the NMB rule. During debate of Mica’s bill, Republican Steve LaTourette (R-Ohio) joined Democrats and offered an amendment to strip Chairman Mica’s provision out of the bill. LaTourette failed, but his move highlighted how difficult it would be to get FAA authorization across the finish line, especially with Democrats controlling the Senate and White House.

After the Senate passed their predictably bad FAA authorization legislation, the House and Senate conferenced to try and work out the differences between their two pieces of legislation. And there were plenty, but the most contentious deviation was Mica’s NMB provision. Stopgap measures were passed to keep the FAA funded and give House Leadership time to negotiate with Sen. Rockefeller.

After months of contentious debate, the House and Senate agreed to final NMB language—last week both Chambers passed FAA authorization. While it would have been impossible to get Sen. Rockefeller to swallow the provision that overturned the NMB’s pro-union rulemaking, Boehner extracted tangible victories for conservatives.

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Obama Proposes Nearly $90 Billion in Tax Hikes on Energy Producers


Posted by Chris Prandoni on Monday, February 13th, 2012, 3:29 PM PERMALINK


Click here for the full study.

Obama Energy Tax Proposals  
The President’s FY 2013 budget contains billions in tax increase on energy production and consumption. These taxes will result in higher prices at the pump, increased utility bills, and fewer American jobs as companies flee the U.S. and companies cannot recover their investments. Below is a breakdown of energy taxes Obama put forth in his 2013-2022 budget:

Tax Increase FY 2013 FY 2013-2022 Industry impact
Increase Amortization Period $61 million             $1.4. billion $1.4 billion
Dual Capacity $530 million $10.7 billion $10.7 billion

Repeal Percentage Depletion:

Oil and Natural Gas

Hard Minerals

$612 million

$185 million

 

$11.4 billion

$1.7 billion

 

$11.4 billion

$1.7 billion

Repeal Intangible Drilling & Expensing of Exploration Cost for Coal

Oil and Natural Gas

Hard Minerals

 

$3.4 billion

$26 million


$13.9 billion

$440 million

$13.9 billion

$440 million

Section 199

Oil and Natural Gas

Hard Minerals

$587 million

$13 million

$11.9 billion

$270 million

$11.9 billion

$270 million

Repeal Tertiary Injectants $7 million $100 million $100 million
Superfund $1.4 billion $20.8 billion $10.5 billion
LIFO $5.5 billion $73.8 billion $25.8 billion
Passive Loss $9 million $82 million $82 million
Oil Spill Liability Trust Fund $55 million $717 million $717 million

* Data for FY 2014. 2013 calculations are not applicable.


ATR Recommendations
Congress should reject these new tax increases and move to rapidly increase access to domestic energy resources in the Eastern Gulf of Mexico, part of the Rocky Mountains, the Atlantic and Pacific Outer Continental Shelves, and ANWR. Increased access would:

  • Create 1 million direct and indirect jobs by 2018 and over 1.4 million by 2030
  • Bring an additional 1.27 million barrels of oil equivalents per day online by 2015 and 10.4 million barrels per day by 2030
  • Raise over $800 billion in cumulative government revenue by 2030

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Senator Hatch looks to improve the Senate's Highway Bill


Posted by Chris Prandoni on Tuesday, February 7th, 2012, 3:19 PM PERMALINK


Today, Sen. Hatch will introduce a series of amendments to the Highway Investment, Job Creation, and Economic Growth Act of 2012 that pull the problematic Highway Bill in the right direction. Similar to the House’s proposals, Senator Hatch’s amendments would expand domestic oil and natural gas production and streamline construction of the Keystone XL Pipeline.

Full development of America’s natural resources would likely create over a million jobs, increase America’s energy security, and provide a boon to downtrodden communities. Sen. Hatch’s amendments use new revenue that results from increased energy production to pay for the Highway Bill. Conversely, Senator Menendez (D-N.J.) has repackaged his job-killing legislation as an amendment to the Highway Bill. The Menendez bill, now amendment, would stifle investment and arbitrarily punish oil and natural gas producers by repealing standard cost recovery tax deductions.   

The other side of the coin is spending. Attempting to remedy the Highway Bill’s price tag, Sen. Hatch introduced two amendments: one that eliminates wasteful spending and another that allows the government to spend more efficiently by eliminating the arcane Davis-Bacon law.

Davis-Bacon is a particularly egregious law that has been nickel and diming taxpayers for 80 years. Ratified in 1931, the Davis-Bacon requires the federal government to pay construction workers inflated wages when working on federal projects. Clung to by labor unions, Davis-Bacon ensures that this small minority of construction workers receive a disproportionate share of government work. Giving Americans a greater bang for their buck, Davis-Bacon repeal would reduce the cost of federal construction projects that adhere to the misbegotten wage scale by 22 percent. 

Sen. Hatch’s amendments draw a stark contrast from those being proposed by Senate Democrats. While still deeply flawed, the Senate Highway bill would be measurably better if Sen. Hatch’s Amendments were adopted. 

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ATR Applauds House Republican Energy Policy


Posted by Chris Prandoni on Thursday, February 2nd, 2012, 2:09 PM PERMALINK


2012 began much like 2011 ended, with House Republicans attaching job creating energy projects to “must pass” or essential legislation. Inhibiting domestic energy production at every turn, the Obama Administration’s antagonistic energy policies necessitate legislative remedies.  Included in this year’s Surface Transportation reauthorization are three bills that would unleash America’s job creators, our domestic oil and natural gas producers.

Together, the Alaskan Energy for American Jobs Act, the Energy Security and Transportation Jobs Act, and the PIONEERS Act direct the Secretary of the Interior to sell leases Obama cancelled, advance new offshore energy production, and determine clear rules for the development of oil shale. Without such measures, America’s vast oil and natural gas reserves—and the accompanying jobs, economic activity, and increased energy security—would needlessly remain in limbo.

However, Democrat hyperbole has focused on the importance of infrastructure spending to spur job growth. As three years of failed “stimulus” spending has shown, new spending on transit and pet projects does little to yield economic prosperity. While the bill does endeavor to disassociate these programs from the Trust Fund, a new revenue stream for wasteful infrastructure spending risks effective transportation spending reform. Ultimately, lawmakers should be concerned with saddling positive energy policy with poor transportation initiatives. 

Despite Obama’s State of the Union lip service, his rejection of the Keystone XL Pipeline, DOI’s draft five-year offshore leasing plan for 2012-2017, and the Gulf’s effective permatorium reveal an Administration actively undermining America’s job creators. Realistic estimates predict that over a million American jobs are waiting to be realized if only Obama would allow oil and natural gas companies to safely develop the billions of barrels of oil and trillions of cubic feet of gas America contains.

Although ATR would prefer that revenue from new domestic production be used to cut taxes or pay down our debt, it is almost impossible to imagine a near-term political scenario where this is possible. While the Surface Transportation Reauthorization bill threatens to make long-term transportation reform more difficult, the immediate economic gains from energy development are serious proposals worth considering.

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SOTU Redux: Tax Oil and Natural Gas Companies More


Posted by Chris Prandoni on Wednesday, January 25th, 2012, 3:02 PM PERMALINK


Continuing to demonize some of America’s largest employers, Obama mischaracterizes tax policies employed by the oil and natural gas industry during last night’s State of the Union speech:

“We have subsidized oil companies for a century. That’s long enough. It’s time to end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising. Pass clean energy tax credits and create these jobs.”

This is simply not true. The federal government has not given oil and natural gas producers a penny to explore and develop America’s vast natural resources. Mischaracterizing standard cost recovery practices employed by oil and natural gas producers as subsidies, Obama is looking to justify repealing these longstanding tax deductions.

In fact, Obama’s antagonistic stance towards oil and natural gas companies is antithetical to tax policies he advocated for just last year. Arguing that full business expensing creates jobs by lowering companies’ investment costs, Obama championed this policy for small businesses. The benefits of faster cost recovery are never more evident than in the capital intensive oil and natural gas industry. A Wood-Mackenzie study shows that repealing oil and natural gas producers’ tax deductions would cause companies to delay or scrap future projects and could kill 170,000 jobs.

And it’s not like oil and natural gas companies aren’t paying huge sums to the treasury. Already coughing up around $85 million a day, the oil and natural gas industry’s earnings are taxed at an effective rate of 41 percent. Compare this to the average income tax rate of 26 percent for non-oil and natural gas companies in the S&P 500 and it is clear that oil companies are paying their “fair share.”

Every year Obama’s budget has proposed a $90 billion tax increase on oil and natural gas producers, companies responsible for more than 9 million American jobs. Here are the cost recovery proposals he is really trying to eliminate:

 

Tax Increase

FY 2012

FY 2012-2021

Industry Impact

Increase Amortization Period

$59 million

$1.4 billion

$1.4 billion

Dual Capacity

$535 million

$10.8 billion

$10.8 billion

Repeal Percentage Depletion:

          ~Oil and Natural Gas

          ~Hard Minerals

 

$607 million

$78 million

 

$11.2 billion

$1.35 billion

 

$11 billion

$1.35 billion

Repeal Intangible Drilling

and Expensing of Exploration Costs:

           ~Oil and Natural Gas

           ~Hard Minerals

 

 

$1.9 billion

$78 million

 

 

$12.4 billion

$1.35 billion

 

 

$12.4 billion

$1.35 billion

IRS Section. 199 Repeal

           ~Oil and Natural Gas

           ~Hard Minerals

 

$902 million

$20 million

 

$18 billion

$410 million

 

$18 billion

$410 million

Repeal Tertiary Injectants

$6 million

$92 million

$92 million

Superfund

$1.4 billion

$20.8 million

$10 billion

LIFO

$2.6 billion*

$52.9 billion

$22.5 billion

Passive Loss

$23 million

$203 million

$200 million

Oil Spill Liability Trust Fund

$35 million

$451 million

$451 million          

 

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Why Obama Rejected the Keystone Pipeline


Posted by Chris Prandoni on Thursday, January 19th, 2012, 10:49 AM PERMALINK


Originally published by The Daily Caller.

President Obama has reportedly decided to reject the Keystone XL Pipeline and the 20,000 jobs, increased energy security and billions in economic activity that are tethered to it.

The payroll tax extension bill that Congress passed in December gave Obama 60 days to determine whether the pipeline is in the country’s national interest. It is, but Obama has decided to kill the project anyway — for political reasons. Basically, Obama doesn’t want to alienate his environmentalist supporters, who have worked themselves into a frenzy over the innocuous pipeline. Instead, he’s selling out the union members who would have built it and the consumers who would have benefited from its construction.

Politically, unions have nowhere to go. With public sector workers constituting a majority of U.S. union members, the unions need high levels of government spending (and large numbers of government jobs) in order to remain viable over the long haul. In practical terms, that means they need to support the Democratic Party. During the 2008 election cycle, unions gave 92% of their members’ dues to Obama. Obama knows union money will continue to flow into his war chest even if he kills some union jobs by scuttling the pipeline.

Click here to read more.

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The NLRB's Gift to Big Labor


Posted by Chris Prandoni on Thursday, December 22nd, 2011, 12:59 PM PERMALINK


Despite a referendum from House Republicans, the National Labor Relations Board is moving forward with its Ambush Election rule. The NLRB finalized the rule yesterday, making cosmetic changes to the original proposed rule. Unsurprisingly, the Ambush Election rule still silences workers and burdens employers.

Here’s what DC’s labor experts are saying about the rule: 

“With the unemployment above 8 percent for almost three years, the NLRB Final Election Rule is another slap in the face at out-of-work Americans.  The rule, which reduces the time before elections for union representation and prevents employers from presenting the facts to their workforce, will raise the costs of employment for American firms and discourage employers from hiring.
 
In addition to this new rule, American employers will be subject to new penalties in 2014 for hiring more than 49 workers under the new health care law. Employers are subjected to  NLRB action if they expand, as did Boeing, to a new location within the United States. Federal contractors are facing affirmative action for veterans, women, and minorities.  It is becoming increasingly clear that the only cost saving move for many employers is to reduce hiring or move offshore.” Diana Furchtgott-Roth, Senior Fellow at the Manhattan Institute and former Chief Economist at the Department of Labor.

“What the Board has done is an intrusion on employee rights to insure free and informed choice.  This is an insult to our democracy.”  John Raudabaugh, former NLRB Member

The Chamber of Commerce and Coalition for a Democratic Workplace are fighting back against the Ambush Election rule and have sued the NLRB. From the Chamber’s press release:

“It is tragic that the Board would expend its resources in this manner, creating more confusion and uncertainty under our nation’s labor laws, aiding only unions and perhaps lawyers, rather than focusing on some type of initiative that would encourage job growth,” said Johnson. “Given that 95% of all elections are now conducted within two months, and unions win more than 67% of those elections, there is clearly no rational justification for this regulation. Unfortunately, this new rulemaking is just one aspect of a set of initiatives pursued by the General Counsel’s office and the Board to ease unionization. I suspect we will see more of the same.”

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Obama's War On Domestic Oil Production


Posted by Chris Prandoni on Friday, December 16th, 2011, 10:18 AM PERMALINK


This post was originally published at Townhall.com   

This week the Department of Interior (DOI) sold its first oil lease in the Gulf of Mexico in over a year. Withholding drilling permits and cancelling leases, the Obama Administration has made what was once routine nearly impossible.

Upon assuming office, President Obama cancelled 31 oil and gas lease sales, delaying thousands of jobs and billions in economic activity. Not letting any crisis go to waste, the Department of Interior imposed a six month drilling moratorium on the Gulf following the Macondo disaster.

The Obama Administration’s recent offshore drilling plan codifies the White House’s anti-energy, anti-jobs position. The Obama 2012-2017 draft drilling plan closes a majority of the Outer Continental Shelf (OCS) to new energy production. In fact, less than 3 percent of America’s OCS will be available for development. 

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Senators Collins and McCaskill Jobs Bill Misses the Mark


Posted by Chris Prandoni on Wednesday, December 7th, 2011, 9:31 AM PERMALINK


[PDF Document]

The Collins-McCaskill jobs bill contains some good initiatives (boiler MACT delay, consolidation of federal workforce) but undermines its intended purpose by raising taxes on some of America’s largest employers—American oil and natural gas producers.

Impact on Maine
Maine has no natural gas or oil reserves within its borders, making Maine’s citizens completely dependent on the lower 48 for their heating and driving needs. An absence of fossil fuels is especially concerning for Mainers since 80% of the state’s households are heated with fuel oil.

More taxes, less jobs
Oil and natural gas producers are responsible for about 9.2 million jobs in this country and about 7.5 percent of its GDP. Raising taxes on this industry would force companies to delay or scrap future projects as it becomes significantly harder for them to recover their investment costs. Most importantly, none of the tax policies employed by oil and natural gas companies are particularly unique—most are used by many businesses in many industries. Singling out one industry for tax increases is bad tax policy and inequitable.   

Repealing the below deductions and credit could kill 170,000 American jobs and ultimately reduce government revenue, according to a Wood-Mackenzie study.

1. Intangible Drilling Costs.  Current law allows energy companies to deduct most (only 70% of these costs for the larger companies) of the costs associated with drilling.  All expenses should be deductible in the year they are incurred.  The Collins-McCaskill bill would repeal this and make companies deduct the costs very slowly over fifteen years.

2. Percentage Depletion.  This refers to a provision of law that allows taxpayers to recover their lease investment in a mineral interest through a percentage of gross income from a well. The Collins-McCaskill bill would repeal this provision ONLY for investments in oil and gas wells.  Interestingly, the largest oil companies don’t benefit from this today, so this tax increase is targeted only at smaller energy companies and their investors.

3. Manufacturer Tax Deduction (aka “Section 199”). All employers are today allowed to deduct up to 9% of the cost of domestic manufacturing—all employers, that is, except energy companies, who can only deduct 6% of such costs.  The Collins-McCaskill bill would deny this deduction entirely to energy companies, singling them out by picking winners and losers in the tax code.

4. Tertiary Injectants.  Current law allows energy companies to deduct the cost of injecting materials into older energy reservoirs in order to keep them productive.  This is the proper tax treatment of this cost.  The Collins-McCaskill bill would replace this very ordinary deduction with precisely nothing.  Energy companies would simply have to eat the cost with after-tax dollars.

5. Dual Capacity Rules. The U.S. is one of the only nations which attempts to tax on a “worldwide” basis—even on income which has already faced income taxation in other countries.  When combined with the highest corporate tax rate in the developed world, “worldwide” taxation is an uncompetitive jobs killer.  In order to avoid international double taxation, employers can claim a tax credit for income taxes paid overseas.  The Collins-McCaskill bill makes it more difficult for energy companies to claim this tax credit, exposing their worldwide income to international double taxation—potentially shipping jobs overseas to avoid paying taxes twice.

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Conservatives Should Oppose NAT Gas Act


Posted by Chris Prandoni on Tuesday, November 29th, 2011, 2:51 PM PERMALINK


This article was originally printed by the Washington Times.

Flooded with grant money, compelled by mandates and burdened by regulations, America’s energy sector is a convoluted mess. Government intervention has turned this market upside down. Now, Republicans and Democrats are eyeing the NAT GAS Act - legislation that would further muddy the water.

The New Alternative Transportation to Give Americans Solutions Act, or “NAT GAS Act,” would allow consumers purchasing natural gas vehicles or investors developing natural gas refueling stations to claim between $5 billion and $9 billion in federal tax credits over the next five years. Rep. John Sullivan, Oklahoma Republican, introduced the bill in the House, and Sen. Harry Reid, Nevada Democrat, and Sen. Robert Menendez, New Jersey Democrat, are championing the bill in the Senate.

When the NAT GAS Act was introduced in the House, a substantial number of Republicans threw their weight behind it out of an inherent tendency to support natural gas and a bit of group-think. Once Republicans took a step back and reflected on the broader implications of the act, they began dropping off the bill in droves - 19 Republican co-sponsors have pulled their support.

Republicans’ knee-jerk reaction to natural gas is “we need more,” and for good reason. It is cheap, abundant and efficient. The left has waged a war on America’s natural gas producers in an attempt to inhibit production at every turn. Decrying hydraulic fracturing, the politicized Environmental Protection Agency and congressional Democrats are attempting to regulate the 60-year-old practice out of existence. State legislatures are looking to tax natural gas extraction, thereby limiting economic growth and potential job creation.

Unfortunately, the NAT GAS Act does nothing to facilitate natural gas production or alleviate many supply-side concerns conservatives have. This explains why so many House Democrats have co-sponsored the House bill and why Mr. Reid introduced the legislation in the Senate. Instead, the NAT GAS Act gives certain natural gas consumers an advantage over other natural gas consumers - effectively skewing the market, inflating natural gas consumption and potentially driving up the cost of natural gas.

Furthermore, there is no market failure in need of correction. UPS and other shipping companies already have substantial natural gas fleets without the NAT GAS Act. There is no denying that America’s energy policy is distorted and riddled with preferences. But free-market conservatives looking to remedy this problem should begin peeling away the government’s consumption mandates and tax policies, not piling on more rules. Of course, repealing existing tax credits or deductions must be done in a revenue neutral way - the last thing Republicans want to do is to help fund President Obama’s supersized government.

Rep. Mike Pompeo, Kansas Republican, has introduced the Energy Freedom and Economic Prosperity Act - modeled after President Reagan’s 1986 tax reform - which repeals a handful of energy tax credits and lowers the corporate tax rate by an equivalent amount. Conservatives looking to clean up America’s energy market and tax code should follow Mr. Pompeo’s lead, not Mr. Reid‘s.

T. Boone Pickens and 220 businesses have thrown their weight behind this legislation and are busy lobbying Congress to pass it. Fixing the tax code and restoring market forces to our energy sector is an uphill battle for Republicans, but one that should begin with opposition to the NAT GAS Act. 

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