Obama's budget is bad for Oklahoma
By: U.S. Sen. Jim Inhofe
Friday, February 17, 2012
We shouldn't be surprised by the details of President Obama's fiscal year 2013 budget. It's his fourth budget since becoming president, and with a deficit projection of $1.3 trillion this year, it means that each of Obama's four years in office will be marked by deficits in excess of $1 trillion. Four years of deficit spending totaling $5.3 trillion is bad enough for our nation and state, but the energy provisions in the president's budget pose a real threat to Oklahoma's economy.
His budget's $47 trillion in spending over the next 10 years is irresponsible and fails to balance the books. It ignores the dangerous fiscal crisis that faces our nation and economy. Raising our national debt by an additional $11 trillion is, in a word, unconscionable.
For Oklahoma, the menacing aspects of Obama's budget go beyond the budget gimmickry and phony savings the president uses to claim trillions in deficit reductions over the next decade. In fact, Obama's budget has zeroed in on Oklahoma's strongest economic engine as the target for heavy tax increases to pay for his liberal ideology of big-government spending.
This year's proposal amounts to a $38.6 billion tax increase on the oil and gas industry, which is responsible for directly employing 70,000 Oklahomans while fueling our state's economy at $26 billion per year. Obama's plan to raise taxes by $14 billion by eliminating the deductions for intangible drilling costs, the costs that are incurred by oil and gas explorers during the risky initial drilling process, is a job killer. This tax in particular would choke out domestic oil production, lessen our nation's energy security and increase energy prices on consumers. It is the exact opposite of what we need.
The president also wants to repeal the Section 199 manufacturer's tax treatment for oil and gas companies. While all American manufacturers enjoy this tax deduction, repealing the deduction for oil and gas producers singles them out and increases their taxes by $11.6 billion. Neither the president nor the federal government should be picking winners and losers.
Experts believe the government would actually raise more revenue if we expand oil and gas production rather than increase taxes on it. This would also have a beneficial impact on job creation. One study estimated that if the federal government would simply maximize oil and gas production opportunities, the industry would create 1.4 million jobs across the economy in the next 20 years.
Tackling our fiscal challenges is one of the single most important issues facing America. Punishing job creators and growth sectors, including the oil and gas industry, is not the answer. Rather, we should cut spending and do all that we can to get government out of the way of the private sector. Sadly, the president's budget is nothing more than a campaign pitch to get himself re-elected, and it contains perilous proposals for our state's economy.
Inhofe, R-Tulsa, is Oklahoma's senior U.S. senator.