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Obama Proposes End to Oil, Gas Industry Tax Breaks

by: H. Josef Hebert  |  The Associated Press

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Obama's budget proposal would end $26 billion in oil and gas industry tax breaks. (Photo: Ed O'Keefe)

    Washington - President Barack Obama wants to end $26 billion in oil and gas industry tax breaks, calling them "unjustifiable loopholes" in the tax system that other companies do not get.

    Obama's proposed fiscal 2010 budget, details of which were released Thursday, also more clearly spells out his intention to shut down a proposed nuclear waste dump at Yucca Mountain in Nevada and calls for ending a government subsidy that helps utilities license and plan for new nuclear power plants.

    The oil and gas industry tax breaks have often been targeted by congressional Democrats in recent years, but they have not been able to muster enough votes to rescind them. Most Republicans and the Bush administration vigorously defended the tax benefits, saying they're needed to boost domestic oil and gas development.

    In the budget statement, Obama said the tax breaks, which are expected to save the oil and gas industry more than $26 billion over the next 10 years, are "unjustifiable loopholes ... costly to the American taxpayer and do little to incentivize production or reduce energy prices."

    The White House last February outlined in general terms its proposed budget for the fiscal year beginning in October. But the documents released Thursday provided details including specific numbers.

    The budget would provide $197 million for the Yucca Mountain nuclear waste project in Nevada, but directs that the money be spent to "explore alternatives" to the Nevada site and ongoing licensing activities that have yet to be terminated. It provides no money for site access, new engineering or land purchases.

    Closing down the Yucca project 90 miles from Las Vegas has long been a relentless ambition of Senate Majority Leader Harry Reid, D-Nev. Obama, during his presidential campaign, promised Nevada voters that he would look for other ways to address the disposal of highly radioactive waste from commercial power plants.

    Obama also wants to end a research program for using nuclear power plants to develop hydrogen fuel for transportation and cancel further subsidies to the nuclear industry to help license and plan for new nuclear power reactors. The budget eliminates $168 million that had been earmarked for the reactor program next fiscal year.

    A program to develop a more reliable nuclear warhead that the Bush administration had touted as necessary for easier maintenance of the country's aging nuclear stockpile also was singled out for elimination. The budget cuts $60 million that had been earmarked for design work for the replacement warhead.

  

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Obama sometimes does the

Obama sometimes does the right thing. Certainly more often than most politicians. Lets hope he eventually does the right thing on the Iraq War, the AfPak War, the Bank Bailouts, and Bush War Crimes Prosecutions. Hmm, that was 3 wars in one sentence. Go team!

These subsidies have existed

These subsidies have existed for a long time. How can the GOP say free market capitalism and still have this and many other regulations on the books that make capitalism more like corporate welfare? The true cost of gas is upwards of $10/gallon if you include all the government support for oil exploration, pumping, delivery, storage. However if you included the wars, the propping up of oil producing countries, the number is closer to $15/gallon, as we have spent 10's of billions a year since Reagan was elected protecting our oil interests in the middle east, Africa, Asia, South America. You could even say our foreign policy since 1981 was to maintain our love affair with cheap oil. So for those who complain about high taxes, realize that a fair percentage of your tax dollar subsidizes your oil appetite. Go to alternative energies and become energy independent, you can cut at least half a trillion from the budget.

Interesting that the author

Interesting that the author has the logo of Shell Oil, not Exxon or Mobil on this article. The atx breaks are definitiely not in pace to specifically benefit Shell!

Removing corporate welfare

Removing corporate welfare is the best first step in righting what has been wrong for so long - but watch out for the fallout cries of "its' Anti-American" and "don't bite the hand that 'feeds' us" mantras ... sure, the true cost of gas is going to shock the American public - but, we must counter that with, we've been so fortunate all these years when we paid phenomenally low gas prices due to subsidies, tax breaks, etc. We also must be thankful that Obama's work to straighten out the auto industry will result in higher fuel economy - it all balances out in the end. And the ultimate outcome should be that our taxes go down as we give up supporting bad business principles. Go Obama!

Who do you really think pays

Who do you really think pays corporate taxes? You do when you buy their product. Hello higher gas prices...

Exxon Mobile STILL has not

Exxon Mobile STILL has not paid a cent for the Exxon Valdez debacle that destroyed so much of the West Coast ecology of the area of the oil spill! AND THIS IS SPITE OF COURT CASES, JUDGMENTS, AND OBSCENE PROFITS BY EXXON. ABOUT TIME SOMETHING IS DONE TO MAKE THESE UNPATRIOTIC ROGUE OIL COMPANIES PAY THEIR FAIR SHARE!!