Earlier this month, the New York Times reported on the massive subsidies that the U.S. government hands out to oil companies, despite the industry’s record-setting profits in recent years. The tax breaks and loopholes even enabled BP to write off 70 percent of the rent it paid on the Deepwater Horizon rig that exploded and started the gulf oil spill.

However, attempts to curtail the subsidies have proved fruitless. Last month, an amendment proposed by Bernie Sanders (I-VT) that “would have cut $35 billion in tax subsidies to Big Oil companies” failed to pass, 35-61. Every GOP senator voted against the measure. Lobbyists for the industry have so far been successful in “scar[ing] lawmakers into believing that ending subsidies…will wreak havoc on the American economy” even though “the evidence suggests otherwise.” The Treasury Department estimates that ending the subsidies would decrease domestic oil production by less than one half of one percent.

A new report from the Citizens for Tax Justice confirms that eliminating the numerous tax loopholes for the oil industry is a no-brainer:

In the wake of the disastrous oil spill in the Gulf of Mexico, the public and the media have turned their attention to some of the subsidies provided through the tax code to BP, the corporation that leased the ill-fated Deepwater Horizon drilling platform. The truth is that oil and gas companies have for years received a bonanza of unjustified tax breaks that serve only to boost profits for their shareholders. [...] To the extent that tax loopholes targeting the oil and gas industry boost their profits, there is no evidence that the additional profits lead the companies to explore for more oil so that they can increase the supply Nor does the current tax treatment of oil and gas companies encourage them to develop alternative energy.

Undeterred by unanimous Republican opposition to Sanders’ amendment, Sen. Robert Menendez (D-NJ) is working on a bill that would end billions of dollars in oil industry tax breaks. Perhaps his GOP colleagues will be persuaded by conservative New York Times columnist Ross Douthat, who today blasted corporate tax breaks like those we give to Big Oil:

In case after case, Washington’s web of subsidies and tax breaks effectively takes money from the middle class and hands it out to speculators and have-mores. We subsidize drug companies, oil companies, agribusinesses disguised as “family farms” and “clean energy” firms that aren’t energy-efficient at all. We give tax breaks to immensely profitable corporations that don’t need the money and boondoggles that wouldn’t exist without government favoritism.

With oil gushing in the gulf, BP’s profits soaring, and bipartisan support for ending oil industry subsidies — an act that is projected to save the U.S. government $45 billion over 10 years — it’s hard to believe that we’re still fighting to end them.

–Charlie Eisenhood

Last week, the Washington Post ran an article reporting that the Federal Reserve is weighing “new steps to bolster growth” in light of the exceedingly sluggish movement of the labor market (and the Fed’s mandate to maximize employment). Though the actual steps that the Fed is reportedly considering are quite small, it was good to see that the Fed is at least looking at additional steps to jolt the lagging economy.

This week, the Senate Banking Committee is scheduled to hold a hearing on three candidates for the Federal Reserve Board nominated by President Obama, giving lawmakers ample opportunity to ask how realistic it is for the Fed to do more about employment and whether Obama’s nominees think such steps are warranted:

More often than not, the dour economists who staff the central bank tend to worry mostly about inflation, which the Fed can generally try to keep in check by calibrating interest rates. The second mandate — to promote jobs — gets less attention, in part because the Fed’s powers are less direct. Janet Yellen, the San Francisco Fed president whom President Obama nominated to be the central bank’s vice chairwoman, has argued that in times like these, the Fed should probably be more worried about jobs than inflation.

“I’m one who believes that persistently high unemployment tends to depress inflation,” said Yellen. “Behind these numbers is flesh and blood — millions of people who struggle every day to make ends meet.”

Of course, Federal Reserve Chairman Ben Bernanke has already acknowledged that the Fed could be doing more to boost employment, but that it likely won’t do so. As Paul Krugman wrote today, “the Fed was supposed to be intellectually prepared for this situation. Mr. Bernanke has thought long and hard about how to avoid a Japanese-style economic trap, and the Fed’s researchers have been obsessed for years with the same question. But here we are, visibly sliding toward deflation — and the Fed is standing pat.”

Back in January, there were stories of Fed members pushing for “more policy stimulus,” yet we’re still here with 9.7 percent unemployment and a central bank that is sitting on its hands. Can Obama’s nominees make a difference? If the Senate asks the right questions, we may get a clue this week.

Last week, I pointed out that Coloradans will be voting on a ballot initiative in November that would bar the state from borrowing money, forcing it to pay for all infrastructure investments up-front with cash. But Colorado is not the only state dealing with right-wing attempts to handcuff government via the ballot box.

In Washington state, a ballot initiative — Initiative 1053 — will ask Washington voters if they want to reestablish a provision mandating that a two-thirds majority of the legislature approve any tax increases. “Taxpayers desperately need protection from job-killing, family-budget-busting tax increases,” said anti-tax crusader Tim Eyman, who is leading the effort.

Washington has already experimented with a requirement like this, which was approved at the ballot box in 2007. However, that version gave the state legislature the ability to rescind it after two years, which the legislature rightfully did when faced with the budget crunch caused by the Great Recession.

“If passed this initiative impairs the ability of Legislators to do what they were elected to do — legislate,” wrote Citizens for Tax Justice. Indeed, responsible budgeting requires raising revenue at times. And the fact is that Washington currently has one of the most regressive tax systems in the country.

Washington is actually the highest-tax state in the country for poor people, as “when all state and local sales, excise and property taxes are tallied up, Washington’s poor families pay 17.3 percent of their total income in state and local taxes,” according to the Institute on Taxation and Economic Policy. Without the ability to responsibly raise revenue, Washington’s budget will have to be continually balanced on the backs of the lower- and middle-class and the services that they count on.

Of course, Washingtonians need only look south if they want to see what a supermajority requirement can do to a state’s finances, as California has been unsuccessfully grappling with one for years. As Harold Meyerson noted, despite California’s budget woes, the Republican minority in Sacramento “has refused in good times as well as bad to raise business or other taxes (increasing the tobacco tax, for instance, has failed each of the past 14 times it has come up for a vote).” Paul Krugman seconded this, saying that California’s anti-tax zealots are able to “block any responsible action in the face of the fiscal crisis.”

While Initiative 1053 could wreak havoc with Washington budget, voters also have the chance to revamp their tax structure via another initiative:

Initiative 1098 introduces an income tax that has two brackets targeted at high income Washingtonians, reduces the state property tax, and reforms the business and occupation tax. Supporters of the initiative this week turned in well over the 241,000 signatures required to get on the ballot.

Washington’s right-wing is not alone in trying to implement a counterproductive supermajority requirement on its legislature, as Gov. Rick Perry (R-TX) says he would like to do the same in his state.

Even before taking office, President Obama made it clear that he intended to extend the Bush tax cuts for the lower- and middle-class, while allowing them to expire on schedule for the richest Americans in 2011. Conservatives, however, have been apoplectic about this decision, arguing for making all the tax cuts permanent “right now,” and fearmongering about the effect the expiration will have on small businesses.

Today, Rep. Eric Cantor (R-VA) appeared on CNBC to make his case for extending all the tax cuts. “We’re all about trying to keep the current law as it is and not allow this administration to raise these taxes,” because of a desire to “commit ourselves to help small business,” Cantor said.

Most Democrats are on board with the President’s plan to allow the cuts to expire for the richest Americans. “President Obama has indicated that he wants to extend those tax cuts for those with $250,000 in income and below,” said Sen. Byron Dorgan (D-ND). “So I think Congress will work very hard to get that done.” Sen. Evan Bayh (D-IN), however, said that Cantor’s position is “exactly right”:

We don’t need to raise taxes now. Eric is exactly right. If we’re going to deal with those things, we ought to wait until the economy has a full head of steam going, jobs are being created, several hundred thousand a month, then you can deal with some of the long-term issues. That ought to start with spending restraint, then we can deal with some of the long-term issues. We don’t need added uncertainty, added burdens on business right now.

Watch it:

Sen. Judd Gregg (R-NH), not surprisingly, jumped on board, saying “if you want to do something to stimulate the economy, you could make it clear that tax rates aren’t going to go up at the end of the year.”

First, this trio is hiding behind small businesses to argue for extending tax cuts for the richest segment of the population. Fewer than 2 percent of the small businesses in the country face either of the top two tax brackets, while 34 percent are in the lowest tax bracket and 14 percent actually qualify for the Earned Income Tax Credit, which is available to low-income working people.

So Bayh is joining Cantor and Gregg in going to bat for the richest two percent of the country at a time when income inequality is the worst its been since the 1920′s. According to the latest data, “the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled between 1979 and 2007.” The top 1 percent of families now receive nearly 25 percent of the country’s income, after earning less than 10 percent in the 1970s.

This year alone, the Bush tax cuts will give millionaire’s more in tax breaks than 90 percent of American households make in total income. That’s the conservative agenda to which Bayh is giving his explicit approval.