Barack Obama breaks first campaign promise by dropping oil tax

[emad]

President-Elect Barack Obama has broken his first campaign promise by quietly dropping a profits windfall tax on oil companies that he promised on the campaign trail.

By Alex Spillius in Washington
05 Dec 2008


During the campaign, Mr Obama repeatedly promised to submit oil and gas companies to a profits windfall tax, citing the disparity between their huge profits and the struggles of ordinary Americans.

In the summer he said the tax would "help families pay their heating and cooling bills and reduce energy costs".

But the proposal has been quietly dropped from his agenda listed on transition team website's www.change.gov, setting off a storm of protest among liberal bloggers and small business groups.

An aide explained the change by saying: "President-Elect Obama announced the policy during the campaign because oil prices were above $80 per barrel. They are below that now and expected to stay below that."

http://www.telegraph.co.uk/news/worldnews/northamerica/...



NOT SURPRISING he's hired Chevron Corporation board director General James Jones as his National Security Advisor.....

Bush's first National Security Advisor was...Chevron Corp's Condoleezza Rice.

Fortunately this time round Chevron won't have to fork out for changing the name of any oil tankers; the 'Condoleezza Rice' tanker's name was changed to 'The Altair Voyager' when Rice joined the Bush Administration.

No 'General Jones' tanker on their books however...

[Tuesday Afternoon]

1. []

[CreekDog]

3. give me a break

have you stopped thinking? the plan was when oil was above $120/barrel. it's now near $44/barrel.

is this the priority right now or not? has something moved ahead of it on the list of things to do? if you say no, then you are a fool.

[global1]

35. Convenient For The Oil Companies That Just Spent Eight Years Under The Cover Of *Co........

they've made their killing and raped the American People for the last 8 years and now that *Co is riding off into the sunset conveniently the oil prices are coming down. We won't go back and try to recover some of that money that the oil companies stole from us - that's banked. No windfall profits now. No $4.00/gal prices now - because - it's more important to protect the oil franchise and inhibit the development of alternative energies that could replace oil.

Let's lull the American People into a false sense of security again and get them to continue to buy into oil and just wait around for another Republican Administration were we can again loot the coffers.

So what happens. Obama backs off of the windfall profits tax. Alternative forms of energy development again to look costly in comparison to the oil - and everything is just ducky for the oil companies that will continue their stranglehold over us.

[polmaven]

40. So you LIKE

higher oil and gas prices? The oil companies will simply pass the cost of the tax on to the consumer, doncha think?

[global1]

43. Look - Right Now With The Gas Prices Down.......

I paid $1.69/gal the other day in Chicago - I've become accustomed to $4.00/gal gas and I adjusted. No - I don't like it - but - if gas will be under $2.00/gal going forward - I wouldn't mind being taxed by the Feds say $0.50/gal and those tax dollars be used to fund development of alternative forms of energy to make us oil independent.

If we did that back in Carter's days - we probably wouldn't be in the fix we are in today.

Now that the oil prices and gas prices are coming down - all of a sudden alternative energy development is going to look expensive again. Just what the oil companies want us to think so we get lulled into falling back on oil dependence again.

The oil companies have raped the American Public for the last 8 years under the cover of the Bush administration. Now that Bush is riding off into the sunset - hmmmmm - oil prices are coming down again. What happened to peak oil? What happened to the lack of refineries to produce the gas we need. Did that all go away? You can't tell me that American's changed their driving habits that much that we now have a surplus of oil that will last us forever now - can you? Or are the oil companies just going into hibernation until we again have a Repug administration in D.C. and they can again rape us?

I say put a windfall profits tax on the books. Even if now it doesn't mean anything. It is a shot across the bow of oil companies to let them know that we will never be taken advantage by them again. A pre-emptive strike - so to speak. And if they begin making windfall profits - we'll dip into them.

In the meantime - let the Feds put a $0.50 tax on all the gas we buy - and then develop alternative forms of energy and get us off the oil companies gravy train. $2.50/gal gas is still cheaper than $4.00/gal or higher prices - and it will help us wean ourselves off of the oil company pillaging.

[FormerDittoHead]

44. Yes. They could STILL enact the windfall profits tax, have it in place for WHEN prices go up again.

I'm sure there could be something that could be put into law that would isolate the tax to be upon the profits the oil companies would realize if they charged us more than just passing added costs along to us WHEN prices go up. (or charging us the added price of oil for oil in inventory they paid lower prices for)

MAYBE if they simply had passed the increase prices onto us, then they wouldn't MAKE a greater profit, and they could avoid the tax - it's that simple.

But for Republicans who may object or think it's unfair, we now have a simple way to find out if the market is controlled and they in fact overcharge us and make an added profit on the increase, rather than just pass it along to us:

We know that when prices went up, the oil companies recorded profits through the roof.

OK, prices have now come down. Will oil companies record LOSSES in the next quarter?

If they DON'T, then I would submit that the gains they realized when prices went up were way beyond passing the added expenses to us, and seeing that competition didn't work to bring the market prices down to the point where profits would be brought down to prior levels, then it's pretty clear that the market is controlled and as such, SHOULD be subjected to greater regulation.

[Tuesday Afternoon]

41. You

are the fool if you think Obama will keep ALL his campaign promises. How about giving me a break?

[Renew Deal]

5. .

[DevonRex]

19. .

[Tuesday Afternoon]

28. O_O

[Teaser]

29. You alerted on "snark"? How 3rd grade.

.

[Tuesday Afternoon]

42. and you point your finger at it...

how Pre-K of you.

[CreekDog]

2. it was enacted to deal with windfall profits, which oil price decreases of 70% have taken care of

don't like how you came here and bashed Obama as if there were no extenuating circumstances.

[emad]

4. don't like how you came here and bashed Obama as if there were no extenuating circumstances.

Don't shoot the messenger.

General James Jones appointment as National Security Advisor probably pivotal to the deal.

[DevonRex]

10. It's a bogus message so we'll call you on it. If you post flame-bait

you'll get flamed. Pretty simple.

Back up your shitty comment about Jones.

[emad]

16. No flame bait.

Check out Jones' CV for yourself.

[DevonRex]

17. No. You back up YOUR assertion YOURSELF.

[emad]

18. Don't have to, especially to anyone using profanities in their posts.

"NOT SURPRISING he's hired Chevron Corporation board director General James Jones as his National Security Advisor....."

Second largest US oil/energy corporation, fourth largest in the world.

And General Jones has been on their board since May 2008.

[DevonRex]

21. ROFLMAO!!!! Can't take the heat? Don't make statements you can't back up.

[emad]

22. My previous post about Jones/Chevron refers.

Condoleezza Rice as Bush's first National Security Advisor also had to give up her Chevron Corp directorship.

Hardly shocking then that Obama has also picked from Chevron.

[Dawgs]

31. That's not proof of anything.

Crazy left, maybe?

[emad]

32. The Pentagon has always had a bit of an interest in protecting domestic US oil

rights. Not to mention abroad of course.

AND Bush's first National Security Advisor was Condoleezza Rice who had to resign from her Chevron directorship to take up the Bush post.

[zipplewrath]

6. Yeah, it'd be a tax on nothing

They could pass the tax, but there would be zero revenue generated. They aren't going to experience any windfall profits for some time. It'd be a fight over nothing. If the economy gets going, he might have to revisit the idea.

[emad]

7. Just goes to show how rash promises about the economy during

a gruelling election campaign can all go down the pan soon as the recession begins to bite.

[global1]

36. Why Not Institute A Windfall Profit's Tax As A Preventative Measure ......

sort of a pre-emptive strike so that the oil companies never take advantage of us again? Even if we don't derive any revenue from it now - it might make the oil companies think twice about manipulating the market in the future.

[emad]

39. Walls St would go crazy at the idea.

Now with the election safely over, a transition spokesman explained this week that the drop in oil prices to $50 a barrel has made the windfall tax a dead letter. Left unexplained was why the oil companies suddenly decided to stop profiteering, or manipulating commodity prices, or whatever it was they were supposedly doing. But be thankful for small mercies. It is reassuring that Mr. Obama's calls to arbitrarily soak an unpopular business were merely rooted in political expediency, not some economic philosophy.

http://online.wsj.com/article/SB122843615613281339.html

[Renew Deal]

8. Electing Obama was the windfall profits tax

Once he was elected, price dropped. Is that a surprise? No, because the oil companies knew Bush wouldn't ever do anything.

[Windy]

13. exactly....that was the first recognizable effect on the economy. The Oil companies stopped gouging.

at least to a certain extent.

[scheming daemons]

9. Um..... you can't have a "windfall tax" when there is no longer a "windfall"

When oil was $147/barrel, this made sense.

With oil at $43/barrel (and dropping), it no longer does.



This OP is very troll-er-ific.

[Jennicut]

15. Like duh. Thank you! Our economy is taking so the speculating is gone

[Pirate Smile]

11. Wrong - I just love Democrats who do everything they can to slam Obama before he is even sworn in.

Obama Spokesperson Reaffirms Commitment To Rolling Back Oil Company Subsidies

By Greg Sargent - December 4, 2008, 11:08AM

A spokesperson for the Obama transition team is reaffirming the President-elect's commitment to rolling back the subsidies that oil companies enjoy, confirming that Obama's campaign promise on this score is still fully operative.

"Yes," replied Obama transition team spokesperson Nick Shapiro, when we asked him whether Obama remained committed to rolling back the oil company subsidies.

We posed the question to the Obama in the wake of yesterday's news that Obama wasn't imposing a windfall profits tax on the oil companies, something that got some progressives to worry whether Obama was preparing to soften his policies in the face of corporate opposition.

The Obama spokesperson's reaffirmation of his commitment to rolling back oil company subsidies could help mitigate such angst. It's unclear how or when the rollback will take place, since Obama hasn't even taken office yet.

The reason this is noteworthy is that the Obama campaign has largely refused public comment on its legislative priorities. Yesterday The Huffington Post was able to get an Obama spokesperson to offer the same one word answer -- "yes" -- to the question of whether Obama remained committed to the Employee Free Choice Act, the leading priority of the big unions.

On the subject of the windfall profits tax, Obama aides argue that there's no story there to begin with. They say that the policies were meant to be triggered by oil prices above $80 a barrel and that when the Obama campaign rolled out his middle class rescue plan in mid-October it didn't have the tax in it, because prices had dropped, meaning there's nothing new here.

"Obama announced the policy during the campaign because oil prices were above $80 per barrel," an Obama aide said. "They are currently below that now and expected to stay below that."

http://tpmelectioncentral.talkingpointsmemo.com/2008/12...

From the Comments:

This is a good indicator of misunderstandings to come.

We have been subjected for eight years to a maladministration with the cognitive capability of a two-year-old, and now find the MSM is incapable of distinguishing between a promise to deal with a temporary emergency (high oil prices = windfall profits tax) and a broad, long-term policy (cutting corporate welfare subsidies for oil companies.)

The repugs are going to exploit this cognitive disability as much as possible, so let's all start exercising our policy discrimination muscles now.

Posted by KY Yellow Dog
December 4, 2008 11:23 AM | Reply | Permalink


yeah, this one is particularly egregious

Posted by Greg Sargent in reply to a comment from KY Yellow Dog

.....

"(he's backing off on repealing Bush's tax cuts to the rich and on a windfall profits tax. That's not "worry," that's the latest news)." - It is the latest false story being pushed by handwringers on the Left. Obama said in a press conference that his team is looking into whether it is best to repeal or let the Bush tax cuts expire. I'm more concerned with the tax cuts for the middle class- this is what America will be watching out for. The windfall profits tax story has been debunked. I will reserve judgement on Obama's policies until I hear them from his mouth or an authorized spokesperson - someone who gives their name, not some anonymous "aide". I don't trust the media anymore - whether it's the MSM or the Liberal/Right-Wing. I'm done. I'm not a journalist but I can't believe the shit that gets past the editor's desk.

Posted by anew08

[DevonRex]

14. I can't stand them. At all. Not one bit. There. I said it.

[thoughtcrime1984]

46. Agreed. It's as if some wanted McCain to win. Sickening. Let the man become President. nt

[emad]

12. California-based Small Business League:

From the story link:

But the shelving of the proposal was spotted by the California-based Small Business League, which asked if "the sudden elimination of this issue is a further indication that large corporations are already demonstrating their ability to influence the Obama administration".

The League was also disappointed that Mr Obama has dropped a reference that expressed concern that federal contracts designated for small businesses were being awarded to major corporations.

[GarbagemanLB]

20. I want my vote back! This is outrageous! You mean he won't impose a 'windall profits' tax

on a company that isn't seeing windfall profits?

I am FURIOUS!!!!!!

[emad]

25. Chevron like ExxonMobil and others have made some spectacular

windfall profits in 2008 but the price of crude has dropped considerably since the presidential election.

Fourth quarter profit figures won'nt be posted until end December 2008/early January 2009.

[Mass]

23. Obama Spokesperson Reaffirms Commitment To Rolling Back Oil Company Subsidies

http://tpmelectioncentral.talkingpointsmemo.com/2008/12...

[Name removed]

24. Deleted message

Message removed by moderator. Click here to review the message board rules.

[ClarkUSA]

26. Considering oil prices are under $50/barrel and consumption is down, there's no need for it

In fact, I believe the threat of one caused traders to lower bidding prices so Obama did the trick for the good of the middle-class.
Some alaysts are predicting that pump prices could go down as low as $1 by the end of next year if demand continues to decrease.

[pnwmom]

27. The profoundly worse economy calls for continuing reevaluation

of everything. If Obama robotically acted on all promises from over a year ago, we'd be in serious trouble.

[Zynx]

30. I'm watching CNBC and I see oil at $42.21 a barrel as of this moment.

I don't see the need at this point. There won't be excess profits to tax in a couple quarters.

[emad]

33. Independent Petroleum Association of America comment

"The judgment to withdraw the concept of a windfall profits tax is an important recognition that developing America's oil and natural gas would be seriously damaged by such a tax policy," said Lee Fuller, vice president of government relations for the Independent Petroleum Association of America, which represents independent oil and gas producers.

"A windfall profits tax is bad policy at any price," said Thomas Pyle, president of the Institute for Energy Research, calling the move "a heartening development -- both for consumers and an economy struggling to claw its way out of recession."

http://www.guardian.co.uk/business/feedarticle/8110602

[emad]

34. Wall Street Journal today:

Throughout his run for President, Mr. Obama argued the industry deserved special taxation on its "excess" earnings. He planned to use the proceeds to fund an "emergency" round of $1,000 rebate checks for families. "It isn't right that oil companies are making record profits when ordinary Americans are going into debt trying to pay rising energy costs," he said. The sentiment featured in campaign ads and attacks on John McCain.

Mr. Obama never did offer a good or even particular reason for the oil majors to face this Carter-era inspiration -- apart from appeasing the populist furies. And he couldn't, either, given that multiple other industries profit more both in absolute terms and in returns on equity or sales. Nor could he account for the fact the tax confiscation would merely be passed along to the public in forgone investment in new exploration and production (and thus higher prices at the pump) or lower dividends.


http://online.wsj.com/article/SB122843615613281339.html

[tritsofme]

37. Oil is flirting with $30/bbl range, which windfall profits shall we tax?

Americans are realizing lower energy costs today, and that was his intent, not punishment.

[On the Road]

38. Are the Oil Companies Making Windfall Profits at $44 a Barrell?

If not, the question would seem to be moot.

[WonderGrunion]

45. A windfall profits tax requires windfall profits

With oil dropping below $44 a barrel, that isn't happening. He can always introduce it later if the oil companies gouge the prices back up again.

[polichick]

48. Yep - some people said there were no windfall profits (as normally defined)...

...even when Obama campaigned on it.

[TexasObserver]

47. Would you like to buy a clue?

Or get one, perhaps?

You can't tax windfall profits without windfall profits. Oil is collapsing.

It would be idiotic of Obama to pursue such a tax now, and it is idiotic to call his decision breaking a campaign promise.