The 2012 elections may be just weeks away, but American Petroleum Institute congressional lobbyists have been looking beyond that for several months.
They are preparing for tax reform negotiations that could be part of possible—some say likely—serious discussions in 2013 to cut the federal budget deficit, two of them told reporters at a Sept. 11 luncheon.
"The policymakers will make the call at the end of the day," said Stephen Comstock, API's tax policy manager. "We want to make sure they're fully acquainted with the industry's situation."
He predicted that the lame duck session of Congress immediately following the elections could be tough, with pressure on federal lawmakers to reform the Alternative Minimum Tax, business extenders, and other pressing issues.
Their main challenge, however, will be to do enough to avoid dramatic mandatory federal operating cuts which would occur on Jan. 1, 2013, under the sequestration terms Congress and the Obama administration previously negotiated.
The White House and several congressional Democrats have suggested that repealing selected federal tax deductions for the five biggest US oil companies would provide some quick revenue. Comstock and his associate, API senior tax advisor Brian Johnson, have been busy explaining why this is a very bad idea.
"We've already seen bipartisan rejection of targeted legislation," said Johnson, referring to votes by US Sen. Mary Landrieu (D-La.) and Mark Begich (D-Alas.) and others against Sen. Robert Menendez's (D-NJ) bill earlier this year.
'Provide a chance'
He also said that Republican nominee Mitt Romney's proposal, during the first presidential debate, to put oil and gas tax provisions on the budget negotiations table with other authorized deductions "would provide a chance to discuss how they help us plow money back into the economy."
Before that occurs, however, Comstock and Johnson would like to see more specific proposals. They don't expect those to materialize before the federal government knows how much money it will have to operate after Jan. 1, 2013. "You have to have a budget baseline before you tackle tax reform," Johnson said.
Asked if they would be annoyed if solar and wind power tax credits were extended as oil and gas provisions were considered for repeal, Comstock responded: "We would wonder why. We would want to know if it's part of a broader energy policy that encourages new technologies by picking winners and losers. We would kick the tires."
API's congressional education efforts will focus on the House Ways and Means Committee and others involved in budget development as well as key Senate and House energy committees. "Given the nation's fiscal situation, we believe there will be discussions going forward," Comstock said.