The oil industry outside the U.S. has a huge economic stake in the BTU tax issue and the rest of President Bill Clinton's economic initiative. The world's single biggest oil market threatens to penalize petroleum use and sacrifice growth on the altar of higher taxes and bigger government. The non-U.S. oil world thus shares with U.S. petroleum consumers a concern in the power politics now at work in Washington, D.C.
Clinton has collided with the stubborn American notion that voters should get what they elect. Last November voters discarded a president who broke a promise not to raise taxes and elected someone who called himself a New Democrat. What they got was a lurchy activist in a hurry to reinstate 1960s-style liberalism. Lawmakers heard quickly from voters: What is this guy doing?
'STIMULUS' PLAN FAILS
The first blow to Clinton's wrong-headed economics came when a spending program disguised as economic stimulus went down in flames. Then the tax package-including the BTU tax and its extra levy on oil-rolled onto Capitol Hill. Democrats in tune with the electorate cringed. Sen. David Boren (D-Okla.) took the unusual step of visiting the House of Representatives to resist what is, after all, a tax on work. Bullied and cajoled by party bosses, Democrats in the House eventually managed to deliver Clinton a narrow victory-but only after pivotal members received assurances that the BTU tax wouldn't survive the Senate unchanged.
Since then, Boren has said he'll accept some new taxes, maybe energy taxes, but not the administration's BTU tax. The pressure on him and like-minded Democrats must be extreme. Voters and common sense tell them the President's plan offers only political and economic grief. But party politics tells them that defeat of the BTU tax will kill Clinton's economic program and jeopardize his presidency in its first year.
Thus the stage is set in the Senate for a frenzy of exemptions aimed at giving Clinton his tax without riling voters too much. It will pit industries, regions, and lifestyles against one another. Before it's over, lawmakers will have found ways not to tax nearly every use of energy except driving to work from the suburbs. What they'll call the product of compromise will look a lot like a gasoline tax hike for everybody but farmers.
The oil industry outside the U.S. should understand that Americans don't want this. Clinton tried to cram retrograde tax-and-spend government down their throats in the holy name of sacrifice; when they choked, his frantic party got busy turning it into something voters might swallow. At least the trend is favorable: Every time the politicians look up to see what voters want, they tax less and trim spending more.
An unfortunate sideshow in all this has been the blame "special interests" receive for opposition to a bad idea. The oil industry leads the list of evil doers. It is certainly true that the tax would hurt the industry and that some companies and trade associations have resisted it. What are they supposed to do, let an impulsive government steamroll their shareholders and members?
WHO HURTS MOST
But consumers, not companies and trade groups, will hurt most if Clinton's energy tax passes in any form-consumers who, like the oil industry outside the U.S., have a stake in the American economy, in the ability to perform work, in access to affordable energy and energy markets. Does anyone remember consumers? Or do power politicians consider them just another special interest?
The BTU tax issue is a good way for outsiders to assess the world's leading democracy. It will tell Americans whether they still can hope to get what they elect.
Copyright 1993 Oil & Gas Journal. All Rights Reserved.
