energy
Paul Ryan budget fibs on energy costs
March 12, 2013: 12:26 PM ET
Paul Ryan misstates the case on federal energy taxes.
FORTUNE -- Rep. Paul Ryan laid out his budget blueprint today, and it includes some whoppers about federal energy subsidies.
Here is what Ryan writes on page 48:
"The administration continues to penalize economically competitive sources of energy and to reward their uncompetitive alternatives. On the one hand, it pours money into its favored industries. In 2012, the Congressional Budget Office found total energy subsidies were $24 billion, of which $16 billion were spent on "green" energy programs and $2.5 billion on fossil fuels."
I don't know if Ryan simply misread the CBO report he cited or if he intentionally misstated it. Either way, he got it wrong.
The CBO's $24 billion figure does not refer to "total energy subsidies," but rather to tax preferences and Department of Energy spending on developing and producing energy technologies. Pretty major distinction.
Moreover, the $24 billion figure is for 2011. Guess what happened at the end of that year? Four of the major preferences -- which accounted for around $14.4 billion or the $16 billion Ryan attributes to renewables -- expired on December 31. In other words, his proposed budget savings would come from ending subsidies that already ended 15 months ago. Perhaps I could give Ryan a pass for missing that, except that CBO made it explicit in a brief accompanying the larger report.
If Ryan really cares about "total energy" tax largesse, then perhaps he wants to close the "depletion allowance" loophole, which lets certain extractors shelter around 15% of a well's production. Or end the 6% net income deduction for profitable oil and gas companies. Or deductions on royalties paid by oil and gas companies to foreign governments. Ryan's budget, of course, mentions none of this.
Look, I'm all for a robust debate over how to put America on a path to future prosperity. But Paul Ryan can't help us get there if he can't be honest about where we are today.
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