Legit Oil Tax Hike or Political Accounting Fraud?

By Alex Pepper

Jun 9, 2010 3:13pm

ABC’s Z. Byron Wolf reports: A barrel of oil costs about $74 today. 8 cents of that currently goes into the “Oil Spill Liability Trust Fund,” which has about $1.6 billion in assets. Democrats want to raise that 8 cent tax to 41 cents and bring the trust fund up to $15 billion. So why are Republicans accusing Democrats of trying to “raid” the trust fund to expand the size of government? Democrats have placed the proposal into a larger bill that would help extend unemployment insurance, stop a pay cut to Medicare doctors, extend expiring tax credits for businesses and much more. The official price tag of the bill – it would add about $80 billion to the deficit over ten years – is partially offset by that $15 billion addition to the Oil Spill Liability Trust Fund. “This kind of sleight of hand and gimmickry adds insult to injury,” said Sen. John Cornyn, R-Tex, at a press conference on Capitol Hill. “This bill raises the tax of the trust fund into the bill, but just as quickly it steals that money out of the fund,” said Sen. David Vitter, R-LA. “They should be brought before some court somewhere for accounting fraud for what they're trying to do to the United States government,” said Sen. Judd Gregg, R-NH, of his Democratic colleagues. Remember the Al Gore’s infamous social security trust fund lock box? Same principle. Republicans, arguing that the trust fund shouldn’t be considered as part of the federal budget, have offered an amendment to the bill that would take the trust fund off the federal books. They say the unemployment/Medicare/tax credit extension bill should really be considered to raise deficits by more than $95 billion. Democrats see a Republican conspiracy to do away with the oil tax hike. Senate Majority Leader Dick Durbin accused Republicans of trying to protect oil companies by scuttling the tax hike. “They've come up with a pretty creative argument to protect the oil companies,” said Sen. Max Baucus, D-Mont, who chairs the Senate Finance Committee, accusing Baucus of returning to the “the last refuge of bean counters… it seems to be the argument that one falls back on when one cannot argue the substance and one just wants to muddy the waters.”

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