Part 2 began an analysis of the bipartisan compromise proposed by the Gang-of-10 Senators, suggesting that deal isn’t so bad. The other evidence the deal isn’t so bad is that the House GOP is threatening to refuse to vote for it (see “Part 2.5“).
The good of the 5-year extension of the renewable tax credits certainly beats the “bad” of doubly de minimis drilling. But what about the rest of the deal?
The $84 billion in investments in conservation and efficiency in the New Era bill will be fully offset with loophole closers and other revenues. Approximately $30 billion will come from new revenues from the oil and gas industry through such measures as modifying the Section 199 manufacturing deduction for oil and natural gas production and other appropriate measures to ensure that the federal government receives its fair share of revenue from Gulf of Mexico leases. Remaining offsets will be finalized in consultation with the Finance Committee after accounting for interaction effects with other pending legislation.
Pretty amazing, really. This bill is going to be paid for in part by “Repealing a tax break for oil companies that Democrats have long called for,” as CNN put it. This is probably a deal killer for those taking millions of dollars in contributions from Big Oil, like McCain.
And there is even more pretty good stuff, depending on exactly how the final bill is written: