Obama Abandons Windfall Profits Tax on Oil Companies; Liberals Smell a Corporate Rat
EmailShortly after clinching the Democratic presidential nomination in June, Sen. Barack Obama, D-Ill., told voters "I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills."
But not so fast.
The American Small Business League recently noticed that President-elect Obama’s reference to a windfall profits tax — which was once posted on the Obama Transition Team website after Mr. Obama’s election victory — is no longer there, having been removed in what the group called "an unceremonious and abrupt manner."
The Houston Chronicle first reported the story today.
"With the election behind him, President-elect Obama has failed to justify the removal of the windfall profits tax from his tax plan," says American Small Business League President Lloyd Chapman in a press release. "The subtle and unexplained elimination of this issue from the Obama-Biden agenda should concern Americans from every background. The American Small Business League questions whether the sudden elimination of this issue is a further indication that large corporations are already demonstrating their ability to influence the Obama Administration… President-elect Obama owes the American people an explanation as to why these campaign promises have been pulled from his agenda."
An aide to the Obama Transition Team tells ABC News, "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."
The Obama windfall profits tax was devised as the price of oil approached its July 3 high of $145.29 per barrel.
While Mr. Obama never specified just what exactly constituted a "windfall profit," the tax was supposed to provide a $500 per person “emergency energy rebate.”
Obama allies argue that Mr. Obama backed off the proposal when energy prices began going down; they point out that when Mr. Obama rolled out his middle class rescue plan in mid-October it did not include revenue from a windfall profit tax because of the price change.
But David Sirota, an outspoken liberal columnist, today writes that "Between this move and the move to wait to repeal the Bush tax cuts for the wealthy, it seems like the Obama team is buying into the right-wing frame that raising any taxes – even those on the richest citizens and wealthiest corporations — is bad for the economy." Sirota asks, "if oil prices are down and oil industry profits are truly down, what’s the harm in passing a windfall profits tax? Even if you buy the right-wing nonsense about a windfall profits tax ‘hurting the industry’ or ‘hurting the economy’ when it is applied, if there really are no windfall profits to tax, then it won’t be applied. That’s what a windfall profits tax really is — a safety valve regulation against profiteering, and one that can raise needed revenues when profiteering occurs. If there is supposedly no profiteering occurring, then what’s the supposed harm?"
And at the liberal Mother Jones blog, a writer asks, "Did Barack Obama just break his first campaign promise?"
– jpt
Rick Santorum Sweeps 3 States 
Pentagon to Open Additional Jobs to Women
Figures.
Posted by: Kitty | December 3, 2008, 2:54 pm 2:54 pm
No one should be surprised. All candidates for President make promises they can’t or won’t keep. I didn’t vote for Obama because I thought he’d keep all of his promises – that’s naive. I voted for him because I was hoping he’d keep MOST of his promises and because I felt like he and Joe Biden would make a better team than McCain/Palin.
Posted by: dlh | December 3, 2008, 3:00 pm 3:00 pm
A campaign promise broken before he even takes office. This was one of those “feel good” promises that duped his supporters. “Feel good” in the sense that it *sounds* good on the surface, but looking a little deeper you realize that 1) the oil companies profit margin is not all that high and 2) the profit that is their goes straight into the pockets of 401k and pension funds. This was a stupid idea, and now Obama is a proven liar!
Posted by: rdhood | December 3, 2008, 3:02 pm 3:02 pm
It could be that PEOB has realized the insurance (or at least a bulkhead) against further economic deterioration is cheap energy, preferably produced buy our country. The drill here drill now folks had a nice slogan, and T Boone, whatever his motives, has always had a strong following for good reasons. Sara summed it up best when she said energy self sufficiency is a primary ingredient of national security. She meant both militarily and economically. Look for a quick change on clean coal and a fast paced nuclear program as well as drilling (dare we say ANWAR) from PEBO.
Russia is one of the few countries with predicted economic growth next year, based wholly on their energy program. They are also the largest exporter of nuclear plants for energy, a business we gave up, in the world.
Or it could be that I am overcome with wishful thinking.
Posted by: smith | December 3, 2008, 3:08 pm 3:08 pm
Barack Obama has been breaking promises since he was here in Illinois. When he was elected for the US Senate he promised to fulfill the 6th year term in Congress to bring change to Illinois, fight the special interest in Illinois and to bring must need it help to create jobs. He did nothing for Illinois and accomplished nothing as our Senator for Illinois, all he did was use it as spring board for his real goal of running for the Presidency. We still have a huge deficit in Illinois, projects under budget, a corrupt administration and special interest. That’s change we believe in 4 years ago!
As a candidate Barack flip flopped in most issues and the press let him go away with it, so we shouldn’t be surprise if he breaks many of his promises such as bringing real change, new people to DC. I doubt it!
Posted by: Tom in Chgo | December 3, 2008, 3:08 pm 3:08 pm
I for one am very grasteful that the President Elect is smart enough to tailor his economic policies to changes forces as prudence would dictate, instead of clinging to his guns on the basis of ideology or campaign promises made under different conditions.
He has some very smart people around him who are no doubt helpinf him formulate his strategy. Is he really selling out his countrymen to corporate greed. I don’t believe it for a minute.
Posted by: Phoenix Lady | December 3, 2008, 3:11 pm 3:11 pm
HE HAD BETTER FOLLOW THROUGH OR HE WON’T SEE A SECOND TERM>>>>>>>>>SICK OF LIES…………
Posted by: NH voter | December 3, 2008, 3:15 pm 3:15 pm
He’s definitely breaking his promise there, same as he is doing it with ending the Iraq war. He just used the war to pander the antiwar movement and to attack Hillary, Biden, Edwards and McCain.
In top of that he named Gates as Sect of Defense and Jones as NSA, that’s slap on the face for moveon and all the antiwar movements.
Another broken promises was not to hire lobbyist to his cabinet…well he just did that naming Daschle, and the last one for the Unions and anti Nafta crowd, he just named Richardson as Sect of Commerce.
All big names; but the same old ole politicians that have been or were in Washington for long time. To much for Change We Can Believe In. Really?
Posted by: Diana | December 3, 2008, 3:19 pm 3:19 pm
Recanting his promises before he is even sworn in. Oh wait, he hasn’t verbalized this broken promise yet, has he? This will make for some good spin. My only hope is that the press will apply the same standards to Obama as they have to “W”.
Posted by: jddjshaw | December 3, 2008, 3:24 pm 3:24 pm
Maybe Obama was just having fun when he made that promise……Didn’t you guys notice when he said he probably would not repeal the Bush tax cuts either? Or how about when he signed FISA despite promising not to? Or what about his criticism of Clinton for voting for Kyl-Lieberman, but he refused to show up — and has now made her Secretary of State and told liberals to back off Lieberman.
What about his vote to reauthorize the Patriot Act — or his decision to back off NAFTA? What about his support of the death penalty — in cases without a murder? Or how about his endorsement of Scalia’s ruling in the case the invalidated the DC handgun ban? Or what about his condemnation and bellitling of Clinton in terms of foreign policy but his decision to make her the “fresh face” of his administration’s diplomacy? Obama is nothing but a politician, and with liberals and the media sleeping on him because they are in love, do not expect much coverage of his failed promises.
Posted by: Cynical Black Democrat | December 3, 2008, 3:25 pm 3:25 pm
Wasn’t it the wonderful Rev Wright who said Barack is just saying what a politician needs to say…(something along those lines)…guess that applies to all areas! LOL
Posted by: samhiguchi | December 3, 2008, 3:29 pm 3:29 pm
There really is not a major difference between the two parties anymore. No politician that promises the world can possibly meet those good intentions. If people really wanted an honest candidate to uphold his or her word, you all would have gone with Ron Paul, but of course nobody likes to hear that they should stop consuming more than they can pay for, and to hear that when we bomb a wedding party in Afganistan there are justified reprisals, or to hear that we are a nation of overweight rude narcissists.
Posted by: Huh | December 3, 2008, 3:30 pm 3:30 pm
Cynical Black Democrat and Diana.- you guys nailed! I will add another broken promise to the list, when he promised to take Federal Funds for the Fall campaign and to disclose the donors and lobbyist in his campaign.
I am sure the list will grow and grow quickly!
Posted by: Paul, CA | December 3, 2008, 3:34 pm 3:34 pm
Give the man a chance to follow through OR break his promises AFTER he is in office. All these idiots speculating and surmising. It’s like putting the cart before the horse. Do any of you negative people have a life outside the living Hell you seem to have place yourselves in? Just a question…
Sick of Whiners
Posted by: seansatx | December 3, 2008, 3:38 pm 3:38 pm
Seansatx, LOL
Take it like a man and accept your idol has some flops. Geez!
He can’t get away with it for long.
c’mon
Posted by: Charlie | December 3, 2008, 3:41 pm 3:41 pm
More “Change you can Xerox!!!”
Posted by: please! | December 3, 2008, 3:42 pm 3:42 pm
Another broken promise from BHO, what else is new?? Fast Eddie Obama throws another promise under the bus…..typical Chicago Pol.
Posted by: smc341 | December 3, 2008, 3:43 pm 3:43 pm
Charlie!
I never said I was a fan or idol of Obama, just sick and tired of listening to people complain of things that haven’t even happened. John McCain could have won the election, and the same number of complainers would be on the blogs cryin.
Posted by: seansatx | December 3, 2008, 3:43 pm 3:43 pm
Seansatx – Dude you are sounded like Phil Gramm. Whiners, ha!
Don’t worry Obama will get his chance, and he will do a better job than McCain probably would. At least Persians will be safer.
Bird is the Word….Just learned that from Family Guy.
Posted by: Huh | December 3, 2008, 3:46 pm 3:46 pm
This is not a flip flop when oil was 143.00 bbl then there is a windfall to tax whenit is below 50.00 bbl wheres the big windfall no windfall no tax what the problem ?
Posted by: Dennis Fort Myers Fl | December 3, 2008, 3:47 pm 3:47 pm
I agree with you, Huh on the assumption that Obama will do a better job than McCain. McCain did a far greater amount of selling himself out in order to get his parties’ nomination.
All we can do is plan for the worse and hope for the best.
Posted by: seansatx | December 3, 2008, 3:51 pm 3:51 pm
We’ll let’s see if the oil companies continue to keep prices low should we tax that.I think we need to only implement taxing them when they raise those prices again.
Posted by: TV | December 3, 2008, 3:52 pm 3:52 pm
Change you can count on!!!
Posted by: roscoe02 | December 3, 2008, 3:55 pm 3:55 pm
Looks more and more like Clinton’s Right Of Middle Way every day.
Posted by: Richard McDonough | December 3, 2008, 3:59 pm 3:59 pm
Oh, come on. You guys know he is doing the right thing by all Americans. Stop with the “broken promises” b.s. He has to “go along to get along” and to accomplish anything with Congress he has to compromise. You know that, don’t you? Any of you who are criticizing him are just doing so because he made smart decisions, not radical far-left, that you were all hoping he would do, just to show you were right about him. But guess you were wrong. He’s got common sense and makes all the right choices for the times we are in. That’s smart politics, not just politics.
Posted by: geecee | December 3, 2008, 4:02 pm 4:02 pm
It still beats having the president-elect stepping in and saying he now has a mandate for war. :\
Posted by: Mark | December 3, 2008, 4:05 pm 4:05 pm
People are so gullible.
Mr Obama lie numerious times to the American people Publicly. On Friends, Family and other things. Caught lying.
The man who came up with excuses after excuses for everything else.
So you people are surprised he is not going to keep his promises.
He may throw crumbs at you but do not expect more.
He will try to smooth talk you into all kind of excuses. He will play his blame game and blame it on everyone else.
Some of the things he will try to change, will not be anything like what you had in mind, or interpreted them as.
Maybe we should invest in gold, stock up on food and get ready for the ride.
Posted by: seah | December 3, 2008, 4:08 pm 4:08 pm
Ohh I get it, you get all the kids in the new generation riled up to vote, and then disillusion them with the usual broken promises, and news reports that their vote wouldn’t have mattered anyway. That way they never want to throw their support in government again – government is free to run wild once boomers are out of the picture.
Posted by: Mark | December 3, 2008, 4:11 pm 4:11 pm
You know Obama has to deal with a very complicated economy now, don’t you? He cannot make the recession worse by making rash decisions, even if he “promised” to do something. Perhaps his economic advisers are suggesting he not do so right now. Maybe this is not the time to carry out the “promise”. You people are laughable. Give the guy a chance to get the country back on its feet first before you start criticizing his every move. What a bunch of whining, picky, petty, malcontents you all are. Of course, you want him to fall flat on his face, don’t you? Keep wishing, but it ain’t gonna happen.
Posted by: geecee | December 3, 2008, 4:33 pm 4:33 pm
This issue is ridiculous given that 1., Obama is not even in office yet. 2., I don’t believe for one second that Obama would back off on an issue if it was in best interest of the country. Lets be realistic. I did not vote for Obama expecting him to wave a magic wand and make everything hunky dory. We’ve got two wars, an economic meltdown and energy/climate/national security issues to tackle. All of this will require some patience and COMPROMISE. Get a clue
Posted by: Steve | December 3, 2008, 5:19 pm 5:19 pm
What’s next, global warming is a hoax?
Posted by: Woody | December 3, 2008, 5:23 pm 5:23 pm
Yea yea yea…some we’ll always find words to justify Obamas flops.
That can go on for a while. The fact the guy is bringing all those power houses in his cabinet is to control them well and learn from them at the same time. It will be very hard from them to go out and criticize him afterward, . I have to give credit to Obama as a politician. Who knows what will come up out of his government, no one can predict since the guy has not record at all.
Let’s try to be optimist but cautious and treat the guy fair but demand real change and to fulfill his promises otherwise he will pay a big prize.
Posted by: Obama what | December 3, 2008, 5:24 pm 5:24 pm
Good Lord people! Isn’t there something constructive to add?! He has not taken office yet. One day the stock market gains over 500 points the next day it’s a freefall of 680 points. Things are good overseas and then Mumbai hits. He is trying to set up the best cabinet to deal with what might happen after he takes office. If he has to modify based on actual events AFTER he takes office, he will. That is not “breaking promises”,that is just good management. If you are concerned with what is happening now, President Bush is still in office. Otherwise, remember patience is a virtue and wait until after January 20, 2009.
Posted by: aftbrat59 | December 3, 2008, 5:30 pm 5:30 pm
Well he’s starting to look just like all the other lying scum bag politicians. Once you get elected who cares. He also has changed his mind on the war and the Bush tax breaks for the rich. All that and he hasn’t even taken office yet. I wonder what else he won’t do. The only thing the guy was interested in was becoming the first black president. He could care less what happens to the rest of us, his family will live in the history books for ever.
Posted by: Dale | December 3, 2008, 5:56 pm 5:56 pm
I’m sorry I voted for Obama. Not one day in office yet and he’s proving to be as big and nasty a liar as GWBush was. Sigh. Who stole my lovely America from me for so long now?
Posted by: buzzie | December 3, 2008, 6:54 pm 6:54 pm
geecee: ‘He cannot make the recession worse by making rash decisions, even if he “promised” to do something.’
But…but…but he made rash PROMISES! And I do like the way “promises” was qualified. Just kiddin’, didn’t really mean…
I’m just enchanted by the feeding frenzy, and some of his followers are right there with teeth bared…this is delicious!
Posted by: Laughing Cynic | December 3, 2008, 7:55 pm 7:55 pm
I still think we need the tax to be IN PLACE so when the prices do go BACK UP and you know they will the statue will be there. Further I do not care what the price of oil is, I care what is the amount of outlandish profit that they (the olil companies) are making.
Posted by: Ranger Phx | December 3, 2008, 8:04 pm 8:04 pm
Let’s stop blaming the people at the top.
The truth is that a windfall profits tax won’t do much to solve the foreign oil dependence problem.
Every State has the power to increase the sales tax it charges on petroleum products. Stop whining and write your state assemblyman, senator or governor and insist on an increase in that tax.
After all, taxes are going to have to be increased on SOMETHING OR SOMEONE to pay for the schools. Also, in the case of businesses, the state taxes paid may be deductible on federal taxes :)
Posted by: AVE_FAN | December 3, 2008, 8:19 pm 8:19 pm
“I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills.”
Ummm, the critics seem to forget that there are no longer windfall profits and energy costs are groundrocketing. Sheesh. I’m a Republican and I have to defend him against his own wingnuts.
Posted by: Bridget | December 3, 2008, 8:51 pm 8:51 pm
The oil companies are not making windfall profits anymore. The recession is hurting them too, just like everyone else. So what should there be a windfall tax on the oil companies if they are not making windfall profits?
Posted by: anthony | December 3, 2008, 9:24 pm 9:24 pm
I meant “why should there be” in my post
Posted by: anthony | December 3, 2008, 9:27 pm 9:27 pm
Ha Ha Ha its only the beginning LOL LMAO
Posted by: Marie | December 3, 2008, 10:42 pm 10:42 pm
Would some brilliant liberal please explain to me the logic of a windfall tax anyway? How do you tax a public company? It ALL get’s passed on. The first corporate responsibility is to increase shareholder value. Profits made go into stockholder value, in turn improving the values of 401K, mutual funds and share holders around the world. Anyone who holds a mutual fund has probably been an owner in “evil Exxon” at some point. You punish Exxon, you punish honest, hard working people. I’m sure many of you Exxon haters were jumping for joy during the bull market from the last 6 years (2001 to 2007). You’re probably the same ones who are griping about Exxon now. Exxon DOES NOT set the price of oil. Plus, service stations are just as culpable at pushing the price of gas upward. If you really think companies like Exxon just “use”, then you’re just as much a “user” if you drive a car or use. Why don’t you put your money where your mouth is and ride a bike everywhere? Otherwise you’re a hypocrites…
Posted by: jta | December 3, 2008, 11:11 pm 11:11 pm
Maybe you whiners would rather have Alfred E. Bush for a third term?
Posted by: Pat | December 3, 2008, 11:57 pm 11:57 pm
Did Obama just break his first campaign promise?
No. Like Bush he broke his first campaign promise early in the primaries.
Posted by: jan | December 4, 2008, 6:08 am 6:08 am
Sirota’s approach doesn’t make any sense. Pass legislation and then don’t use it if there are no windfall profits? If there are no windfall profits, why pass legislation to begin with?
Posted by: Brooklyn Democrat | December 4, 2008, 10:22 am 10:22 am
Now is exactly the right time to put in a windfall profits tax. If you wait until the next time energy goes through the roof, it will be too late. Kind of like shutting the barn door after the cows leave. Put the law in place now. Who cares if you don’t see a penny for a couple of years! What does it cost to enact such a law? ZERO, but what does it cost if we don’t enact it now before its too late?
Posted by: BJ | December 4, 2008, 12:49 pm 12:49 pm
How can you put a tax on a business specifically designed to prevent or discourage them from making a large profit, and then claim that it will not harm the industry?
Posted by: Larry | December 4, 2008, 2:40 pm 2:40 pm
It’s worth noting that “windfall” profits (i.e., profits on private goods with relatively inelastic demand)can occur even when crude oil prices are low. In fact, oil companies are probably collecting bigger windfall profits now than they were last spring. That’s because prices for gasoline and other refined products are falling at a slower rate than their crude-oil costs.
What’s sad about this episode is that the Obama team chose not to announce its change in strategy on the tax, but only remove it from the website and wait for someone to call them about it. That’s Bush-league communications. Obama needs to be reminded that we expect better of him.
Posted by: Paul Gallagher | December 4, 2008, 3:31 pm 3:31 pm
Paul Gallagher, you are really confused. The oil companies — the ones that Obama is targeting — profits are made from crude oil not from gasoline sales. With oil <$50/barrel there is a big problem in that industry
Posted by: David Killion | March 15, 2009, 8:14 pm 8:14 pm