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A Magic Way To Make Billions (*Co Budget Boondoggle) [View All]

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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Feb-26-06 10:10 AM
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A Magic Way To Make Billions (*Co Budget Boondoggle)
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http://www.time.com/time/magazine/printout/0,8816,11677...

The wording is so bland and buried so deep within a 324-page budget document that almost no one would notice that a multibillion-dollar scam is going on. Not the members of Congress voting for it and certainly not the taxpayers who will get fleeced by it. And that is exactly the idea.

With Washington reeling from the Abramoff lobbying scandal and Republicans and Democrats alike pledging to crack down on influence peddling, with one lawmaker already gone from Capitol Hill because he traded favors for cash, you're probably guessing this isn't the best time for members of Congress to dispense a fortune in favors to their friends.

Guess again.

Buried in the huge budget-reconciliation bill, on which House and Senate conferees are putting the final touches right now, are a few paragraphs that accomplish an extraordinary feat. They roll back the price of a barrel of crude oil to what it sold for two years ago. They create this pretend price for the benefit of a small group of the politically well connected. You still won't be able to buy gasoline for $1.73 per gal. as you did then, instead of today's $2.28. You still won't be able to buy home heating oil for $1.60 per gal., in place of today's $2.39. But a select group of investors and companies will walk away with billions of dollars in tax subsidies, not from oil but from the marketing of a dubious concoction of synthetic fuel produced from coal and dependent on government tax credits tied to the price of oil.

<snip>

Today about 55 such plants around the U.S. process 125 million tons of coal or, in many cases, coal waste from an earlier mining era. For owners and operators, the whole point isn't creating a profitable new energy resource for the U.S.; it's about collecting the tax subsidy. Progress Energy Inc. of Raleigh, N.C., which owns electric utilities that serve portions of the Carolinas and Florida, reported in a filing with the Securities and Exchange Commission that in 2002-04 its synfuel-production losses added up to $400 million. No problem: the company claimed $852 million in tax credits, magically transforming a money-losing operation into a money-making business with $452 million in profits—courtesy of the American taxpayer. And that's not all. Like other synfuel producers, Progress Energy can't immediately use all the tax credits it mines because of tax-law limitations. As of Dec. 31, 2004, it was sitting on $745 million in deferred credits that it can write off against future earnings for years to come. And Progress Energy is not alone. Plants run by DTE Energy Co. of Detroit generated $1.2 billion in tax credits during the same years.

...more...

hmmmm.....

I wonder if all those "mine accidents" might be involved in the rush for your dollars? :eyes:
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