House Votes To End Oil Subsidies, Tax Breaks newsvine furl google yahoo netscape

Yesterday, the House of Representatives, under Speaker Nancy Pelosi, completed its 100 Hours agenda with the passage of a bill to end tax breaks and subsidies given to the oil industry.

The bill reclaims $14 billion in lost revenue over the next 5 years, if it is ultimately signed into law. The bill passed on a vote of 264 to 163 with, again, many Republicans voting with the Democrats. That vote, however, is short of a veto-proof majority. The Bush Administration has voiced displeasure with the measure but has not threatened to veto it.

Part of the bill will require the administration to renegotiate leases for drilling rights in the Gulf of Mexico. When Congress authorized the leases during the 90s, they directed that royalties be paid if the price of oil went over $34 a barrel. The Clinton Administration failed to put such a requirement into the leases. When the price of oil crossed that threshold during the Bush Administration, they decided they were powerless to fix the problem. This bill effectively voids the leases.

The open question is whether the oil-friendly administration will veto the bill, ignore it with a signing statement, or actually follow it.


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