Democrats Chip Away at 40 Years of Radical Pro-Business Legislation

This morning, on a day when a category one hurricane is rushing into the Gulf, a Senate committee voted to eliminate limits on liability that oil companies would face for damages stemming from offshore spills like the one in the Gulf of Mexico. The President signaled his support for higher or no caps on liability for oil companies earlier this month. While it may seem like this is just another meaningless vote, a closer examination reveals a huge paradigm shift under way, and it would be wise for voters to pay attention.

Democrats Try to Protect Fisherman in the Gulf
Democrats Try to Protect Fisherman in the Gulf

The Senate Senate Environment and Public Works Committee voted to eliminate liability caps for oil companies. The change, if approved (it still needs to be debated next month) would apply retroactively to BP’s Deepwater Horizon spill in the Gulf.

Reuters reports:

“The oil spill prompted Democrats to move quickly to eliminate the liability limits. Initially, they were pushing for a $10 billion cap, but were convinced by the Gulf of Mexico spill that a more ambitious approach was necessary.

Senate Republicans blocked earlier efforts to pass this legislation in the full Senate using a fast-track procedure.”

The Republicans have had a hard time deciding where they stand on this issue, but they keep coming out as supporters of BP rather than of the people of the Gulf, as best exemplified with Joe Barton’s apology to BP over the President’s request that they set aside twenty billion dollars in an escrow account for victims.

The President was most likely trying to avoid allowing the fate of Alaska’s Exxon Valdez victims to befall the residents impacted by Deepwater Horizon. In the years after the Valdez, Exxon Mobil attacked the award on several fronts, using both maritime law and the federal Clean Water Act, to argue that they were exempt from punitive damages. The US Supreme Court’s eventual ruling slashed their recovery of punitive damages from about $75,000 apiece to $15,000.

It should be noted that in 2005, the oil and gas industries were exempted from the Clean Water Act under the Bush administration.

The Exxon Valdez victims (32,677 fishermen and other interests ) fought Exxon for over 17 years in court, only to have the court awarded damages (1994) cut significantly due to a Supreme Court decision written by Justice David Souter, who said that the $5 billion punitive award against Exxon for spilling millions of gallons of crude oil into Prince William Sound in 1989 was excessive.

Justice Souter wrote that since Exxon Valdez “was caused by recklessness, rather than intentional wrongdoing,” Exxon should not be held to paying more than compensation for actual economic harm suffered. This ruling was seen as a huge victory for business.

In 2008, Sarah Palin, then Governor of Alaska, spoke about how disappointed she was over the ruling; however, later when running for VP, she claimed she was a part of holding the oil companies responsible and took credit for bringing Exxon to heel to the people, a stance which embittered Alaskans who still feel the sting of the Supreme Court decision.

“The president supports removing caps on liability for oil companies engaged in offshore drilling,” said White House spokesman Ben LaBolt. “Oil companies should have every incentive to maximize safety and arbitrary caps on liability create a disincentive to achieve that goal.”

When one looks at all of the many assaults on the people’s rights and the environment under the Republican/conservative driven legislation over the majority of the last 40 years, one simply can’t argue that both parties are the same. This small step to remove a liability cap would be a small but important change in the way America does business.

Obama and the Democrats are sending a message to big business that (it should be noted that while Republicans tout “small business owners” as their raison d’être, their actual policies support and enable big business and corporate America) they are not being given a free pass and will be held accountable for their actions. Being held accountable hopefully leads to a company being more inclined to promote safety, which in turn is good for workers and the environment. Accountability is a free market principle, which makes the Republicans desire to give business a pass again a rather remarkable radicalization and bastardization of their own philosophy.

In small, unseen ways, the party you vote for affects your life, the environment, safety standards, the values of social justice, etc every day. While I have often been in favor of balance between the two parties, as I believe in the intrinsic value of rigorous debate, this country is suffering from the implementation of extreme, radical Right values and desperately needs several years of Democratic rule in order to recover some semblance of balance. Being pro-business does not have to necessarily imply that we careen off the cliff into radical, unbalanced legislation such as we have seen over most of the last 40 years, and as became a bitter parody of free market principles left unchecked and unacknowledged by their own party under George W. Bush and Dick Cheney.

Photo Courtesy of www.shawnescoffery.com

27 Replies to “Democrats Chip Away at 40 Years of Radical Pro-Business Legislation”

  1. “Justice Souter wrote that since Exxon Valdez “was caused by recklessness, rather than intentional wrongdoing,” ”

    I cannot conceive of anything more reckless than a decision like that. After almost 30 years of working in a factory I can tell you that recklessness is little different than intentional wrongdoing. If someone suffers from your recklessness you are just as guilty as if you had done it on purpose. And the oil companies, or any corporation or matter who they are should be held to the same type of rules. I do not understand why there should be a cap on what a company can pay due to their recklessness. As you said Sarah there must be an incentive for any corporation to do the right thing. In almost any corporation who does the right thing is going to be more profitable in the long run. And it is a massive pity that someone has to tell a corporation or force the corporation to operate in the correct manner.

    The Republicans seem to want to allow corporations to impact our lives both financially and physically without repercussions. I know that some are calling for BP to pay all damages which is a direct contradiction to no caps on liability. They base this on the fact that the CEO of BP said he would pay all damages. Love that works I’m going to say I can resurrect Marilyn Monroe

    The Supreme Court is a subject for another day

  2. I love what careful readers we have here:-) Yes, I included that specific part of his ruling for a reason. As you so astutely point out, it goes to show the attitude behind the current Republican/conservative approach to rules for big business, and it is not the “free market” capitalism they sell the public. It’s set up to line the pockets of their wealthy corporate owner friends.

    You are absolutely correct that we must give business incentives to do the right thing — if Republicans were free market advocates, they would say that the RISK inherent in cutting corners is the responsibility of the corporation, just as the PROFIT is theirs when said risk pays off.

  3. “one simply can’t argue that both parties are the same.”

    FACT:

    Sarah Palin and the Republican legislature actually incresed taxes on the oil industry in Alaska.

    What Palin Really Did To the Oil Industry

    By JAMES P. LUCIER JR. WSJ.com article

    As a new governor in 2007, Mrs. Palin stepped in to address the fiscal crisis and restore accountability. Working with Democrats and Republicans alike, she chose a 25% profits tax. But in lean years the state reverts to a 10% gross revenue tax on legacy fields that do not require massive continuing inputs of new capital.

    Relative to the old system, Mrs. Palin’s plan — called “Alaska’s Clear and Equitable Share” (ACES) — improves incentives for developing new resources. It ensures the state does well in boom times — as it is doing now — when oil prices are high. But it also hedges against low prices in the future by ensuring that oil companies exposed to commodity price swings don’t face a crushing tax burden when commodity prices fall.

    Her plan includes an escalator clause that gives the state a larger share of revenues when oil prices rise. This is common to production-sharing agreements all over the world.

  4. I have found that management never seeks the proper method even when it is available. I have never worked for a company that truly did good problem-solving and resolution. And I always wondered why, but you pointed out not doing anything is always easier than doing the right thing. If it comes back to bite you well so what you made money in the meantime. But none of them are smart enough to know that you can make money every day the right way and not lose money. the same analogy can work for government if it is used quite frankly by either party

    I had many chances over the years to go into upper management but I would never do it.

  5. Once again, John, increasing taxes in the form of windfall profits taxes which were redistributed to the people has nothing to do with regulation.

    I am not sure why you are pushing this meme about Sarah – you do realize that what she did in this instance was real socialism, right? And you do realize that oil companies say it drove them out of drilling in Alaska, to the Gulf, right?

    Palin left Alaska in worse shape than California financially — and she doesn’t have the same excuse California has. She governed for short-term gain and gave money to the people which naturally increased her popularity.

    She was in bed with big oil. Todd worked and lobbied for BP. They own BP stock. Todd sent confidential BP email to Sarah, which had to do with their profits.

    If I were you, I wouldn’t go down this road unless you are willing to stop calling Obama a socialist and admit that you embrace this populist Socialist policy of Sarah’s. You can’t have it both ways.

  6. Sarah Jones says:”wealthy corporate owner friends.”

    FACT:

    Most of the largest businesses in the world are publicly traded corporations.

  7. Todd stop it we all know your Sharah’s wife ahhh I mean husband you cannot fool us but the problem is Trig is twenty times smarter than you, and every time you post a comment you prove that fact to be true.

  8. And you are right John. All the Alaskans benefited from that tax. You know why? They benefited because it was sharing the wealth, better known as distribution of wealth. A highly socialist system of taxation.

    The system works so well that they don’t even need a state income tax other or a sales tax. and the Alaskans bring in about $3200 a year each.

    I would be interested in knowing why she beats up on Barack Obama when he mentions distribution of wealth. In the last five years the difference between the upper class and lower class is grown greatly. That does absolutely nothing for a country. It does not create purchasing power for companies that produce products. It does absolutely nothing for the free market.in fact it will certainly bring about the downfall of this country without an injection of money into manufacturing to get people working and bringing up our purchasing power.

    I guess I went a little bit off the subject there, but I had asked the question as her system was an extremely socialist system. And it works extremely well

  9. Isn’t Souter’s decision called a legal “opinion”? So, it’s Souter’s “opinion” The Exxon Valdez was “reckless” and I agree with that actually, but MY “opinion” says Exxon should still PAY. In fact, they should have PAID already, and they should have PAID the 2.1 billion way back in 1990. In fact, it’s my “opinion” that they should PAY NOW AND PAY WITH INTEREST.

  10. Sarah Jones says: “Once again, John, increasing taxes in the form of windfall profits taxes which were redistributed to the people has nothing to do with regulation.”

    I didn’t make any statements about regulation. Didn’t you state that Palin was in bed with the oil companies? FACT: She and the Republican legislature increased oil industry taxes.

    “what she did in this instance was real socialism, right?”

    No, she was following and using the state constitution. Maybe you should read the Alaska State Constitution and do some actual research.

    Citizen Dividends And Oil Resource Rents
    A Focus on Alaska

    The Alaska state constitution claims common heritage rights of ownership of oil and other minerals for the people of the state as a whole. Citizen dividend checks are distributed every year in Alaska out of the interest payments to an oil royalties deposit account called the Alaska Permanent Fund (APF) created in 1976 after oil was discovered on the North Slope. The APF is a public trust fund – a diversified stock, bond and real estate portfolio – into which are deposited the oil royalties received from the corporations which extract the oil from the lands of Alaska. The first citizen dividend check from the interest of the APF was issued in 1982 and was for $1000 per every person for everyone in Alaska who had resided in the state for at least one year. Annual citizen dividends have been issued every year since then, for a total of more than $23,000 per person.

    In 2003, each of the nearly 600,000 Alaska US citizens (residents of Alaska for at least one year) received a check for $1,107 from the APF. The total amount dispersed was $663.2 million. The $25 billion investment fund’s core experienced stock market losses which led to the dividend’s decline this past year compared to the several previous years. The amount was $433 less, a 28 percent drop from the 2002 pay out of $1,540, and a 44 percent decrease from the all-time high of $1,964 in year 2000. The amount changes based on a five-year average of APF investment income derived from the bonds, stock dividends, real estate and other investments.

    Alaska relies on oil for about 80 percent of its revenue and has no sales or income tax. Alaska state government is mandated to invest 25% of its oil revenue into the APF while the other 75% of oil royalty revenue is dispersed to other government funds to finance education, infrastructure and social services. If 100% of Alaska’s oil royalties had been deposited into the APF, it is conceivable that the CD this year could have been about $4,400 or $17,600 for a family of four. But then there would have been no funds for roads, education and other public services and no funds available to run the state legislature – a libertarian dream fulfillment or a social and economic disaster, which one we will never know. If state services were to have been maintained while 100% of oil royalties were deposited in the APF, there would of course have been the need for income, sales and other taxes on wages and production.

    At the end of the 2002 fiscal year, the state of Alaska had a deficit of nearly $400 million. State lawmakers frequently debate whether the APF should be used to help run state government, but the Fund is protected by law from being used for government expenditures. Rather than cutting into the Fund and citizen dividends, others are proposing an increase in oil rents and royalties from oil corporations.

    On February 5th of this year of 2004, several Democratic Representatives filed legislation to help Alaskans recover a fairer share for their oil. That same week former Alaska Governors Jay Hammond and Wally Hickel stated that it is time to review the fairness of oil tax exemptions contained in a 1989 law known as “the ELF”, or Economic Limit Factor. Their viewpoint is that ELF gives unjust-ified tax exemptions. The Alaska Fair Share bill would redress the Economic Limit Factor and meet the constitutional obligation to make sure Alaska’s oil provides “the maximum benefit to the people” as mandated by the state constitution.

    Because of the ELF statute tax breaks, Alaska’s oil production tax rate has plummeted from 13.5% in 1993 to 7.5% today, and by 2013, it would be down to 4% if the law is not changed. Also because of ELF, 11 of the last 14 fields developed since 1989 pay none or almost none of Alaska’s 15% Production Tax. While the state’s share for Alaska oil has fallen, corporate oil profits have soared. BP and Conoco Phillips reported net earnings of $9 billion and $7 billion respectively last year. According to the Department of Revenue, at recent oil prices of $30 per barrel the annual share corporations receive for Alaska oil would exceed total state oil revenue by $1.2 billion.

    The Alaska Fair Share bill establishes a modest minimum production tax of 5% and would raise an additional $400 million in revenue this year. That approximates the current state budget gap. The bill raises more at higher prices per barrel, and an additional $100 million at average prices, according to the Department. The bill also lets the state share in profits above $20 per barrel by slowly increasing the severance tax above that price. To encourage development, the Alaska Fair Share bill reduces the severance tax rate at low prices, when companies face the prospect of reduced profits, and possible investment losses.

    Passage of the bill would alleviate state government expense shortfalls, and would possibly result in higher citizen dividend payments as more funds would be deposited into the APF. We cannot predict this for certain, however, as the CD’s come from the investment portfolio interest, are averaged over a five year investment period, and determined by the portfolio performance.

    We do know that due in large part to the citizen dividend payments combined with the happy consequences of no state income or sales taxes, Alaska is the only state in the United States where the wealth gap has decreased in the past decade. The citizen dividends from the APF are an important and significant source of income, especially for rural families maintaining more land based subsistence lifestyles.

    “Palin left Alaska in worse shape than California financially”

    Where is your evidence supporting that allegation? Remember let’s deal in facts not liberal fiction.

    “If I were you, I wouldn’t go down this road ”

    If I were you, I’d research before spouting off about things you apparently have little knowledge of.

  11. Oldsun says: “Trig is twenty times smarter”

    Is that so?

    Jason, is Oldsun another example of the quality of poster you support on your site?

  12. Shiva says: “Alaskans bring in about $3200 a year each.”

    I deal in factual material.

    Please provide a source for your allegation. How many years have each Alaskan “brought in $3200 from oil revenue”?

    Next tell me about how the Alaska state constitution claims common heritage rights of ownership of oil and other minerals for the people of the state as a whole.

    Can you do that?

  13. Your point? How exactly are you suggesting that being publicly traded somehow mitigates the financial interest of Dick Cheney et al?

    Let me spell it out for you very slowly: Dick Cheney gets deferred payments and stock options from his old company, Halliburton. He gives Halliburton breaks via regulation. He paves the way for Halliburton to make a lot more money. Halliburton gets tons of no bid govt contracts. He and or his friends profit.

    Or, how about Enron?

  14. It’s a matter of FACT that Palin left Alaska in dire straights. I’m not going to do all of your homework for you, but if you like, you can go through other Palin posts here and find all of this information. These are FACTS, not opinions. Palin left Alaska with a 70 percent debt-to-GDP ratio — the highest state debt burden in the United States. BY comparison, California’s GPD was less than 40 percent at that time.

    You’re confusing ACES with the Permanent Fund. The APF was already in place. It was Palin who pushed ACES through:

    ACES is the windfall profit taxes on the oil profits which went up to 75%. Republicans and indeed Palin RAIL against windfall profits. You are aware of this, right? This is NOT a conservative value.

    “It was Palin, after all, who last month proposed that lawmakers pay out a $1,200 resource rebate as a way for the state to share some of its multibillion-dollar oil revenue surplus with Alaska residents.

    The idea for a people’s payment, however, originated in January with Haines Republican Rep. Bill Thomas, a commercial fisherman who suggested a $1,000 rebate, saying he was moved by a legally blind and diabetic friend forced to cut firewood for lack of money to buy heating fuel.”

    SHARING THE RESOURCES via taxes the oil companies to give to the people, inspired by the poor, is a socialist value, John. It’s also frequently called compassion.

    Since you support this value, you may need to reexamine your voting history.

    In 2008, every resident got a $3,200 payout from the APF, thanks in no small measure to the efforts of Sarah Palin. That’s $22,400 for a family of seven, like Palin’s.

    You might also want to google the permanent fund payouts and explain to me why Sarah’s administration LOST all records of payouts and refused to share the information they had on who was paid the first time.

  15. I just want to know once and for all:

    Is Palin for or against windfall profit taxes? Are YOU a conservative or a socialist?

  16. John, this is a fact. It’s been in every news paper that ever wrote about ACES or the APF.

    Try the ADN.

  17. Yes, it is his opinion that Exxon should not have to pay for anything other than actual damages. There is, of course, no way to put a price on the environment, the wildlife deaths, the loss of substinence for AK natives, among many other losses.

  18. John you might read that a little bit less literally. Its understood that most are corporate owned, but that term also is used to point out upper management of the corporations such as CEO’s, COO, and CFO’s.

  19. Does it matter how many years it has been 3200? FFS John

    What does that have to do with anything? The last report on It I can find says 3200
    From 2008

    According to the state Legislative Finance Division, Alaska will get $11 billion in oil taxes and royalties — $5 billion more than the $6 billion fiscal 2009 budget — if prices average $106 a barrel, yesterday’s price on the New York Mercantile Exchange. The state received $5.1 billion from oil companies in fiscal 2007, when it had a $1.2 billion surplus.

    Each Alaska resident gets an annual rebate from state oil revenue, and this year Palin added $1,200 more to the $2,100 check each person received.

    I will disregard your second statement as it does not apply.

  20. The link is www. bloomberg. com /apps/news ?pid= newsarchive& sid=aYdZoyTvFrT c&refer=home

    You will have to reconstruct it if this works

  21. Sarah Jones says:”I’m not going to do all of your homework for you”

    Sorry, you made the claim, you provide the documentation or admit you lie.

    “Palin left Alaska with a 70 percent debt-to-GDP ratio”

    What was it when she was elected governor? Palin wasn’t responsible for setting up the unfunded union pensions or contracts.
    To infer that Palin as governor was the creator of these pension plans or had the dominance in the legislature to “fix” them in her short term is pure unadulterated pigeon droppings. Palin left Alaska in a better financial position than when she started by tripling its savings. And that in only 2-1/2 years in office. What other governor has increased savings by over $4 billion, let alone in such a short period of time? If you actually do some research, you would find that Palin instituted several reforms to bring the pension system under control. She ratcheted down obligations by using a tiered system for current employees that allots their pensions according to seniority. She also enacted a totally new system for those who are newly employed while honoring past commitments which she was legally bound to do.

    “ACES is the windfall profit taxes on the oil profits which went up to 75%.”

    You claimed Palin was in bed with the oil companies. I posted an explanation. Please explain how she could be in bed by raising taxes to get a clear and equitable share of what the people of the state own.

    “You are aware of this, right?”

    Obviously you don’t read what is posted, but I’ll repost in hopes you’ll learn this time.

    The Alaska state constitution claims common heritage rights of ownership of oil and other minerals for the people of the state as a whole. Citizen dividend checks are distributed every year in Alaska out of the interest payments to an oil royalties deposit account called the Alaska Permanent Fund (APF) created in 1976 after oil was discovered on the North Slope. The APF is a public trust fund – a diversified stock, bond and real estate portfolio – into which are deposited the oil royalties received from the corporations which extract the oil from the lands of Alaska.

    “You might also want to google”

    No, you make the claim, you document the claim.

    Web posted Sunday, November 11, 2007

    Palin: PPT shortfalls must be addressed to get Alaska back on track

    By Gov. Sarah Palin

    I rolled out Alaska’s Clear and Equitable Share (ACES) plan, defining reality for legislators and Alaskans: Our current oil valuation system, petroleum profits tax (PPT), is of unreliable origin and we have devised a way to fix it. The fix is ACES, as it was originally proposed.

    Here is a reality: PPT was born out of failed gasline negotiations between the previous administration and oil companies. The administration was desperate for a gasline deal – seemingly at any cost. As a result it compromised the original plan’s 25 percent tax rate. It included giveaways for past investments. And it left the state without needed tools to protect our interests and enforce the new tax law.

    PPT failed to deliver on its fiscal promises by failing to secure an equitable share of our non-renewable resources for Alaskans.

    When legislators were presented with the proposed tax legislation last year, they were constantly told that PPT was the gateway to a natural gas pipeline, and were warned they’d jeopardize the prize if they strayed too far from the “deal.”

    “In 2008, every resident got a $3,200 payout from the APF”

    Wrong! 2008 PFD: $2069 plus $1200 Energy Rebate
    Alaska Energy Rebate is $1200 and will be added to the PFD payment for $3269 total!

    2009 Alaska PFD is $1305

  22. Shiva says: “Does it matter how many years it has been 3200?”

    Yes.

    “The last report on It I can find says 3200
    From 2008”

    Alaska Permanent Fund Information –

    2009 Alaska PFD is $1305

    Why the substantial decrease?

    “Each Alaska resident gets an annual rebate from state oil revenue,”

    No, it is not a rebate. Residents receive a PFD check.

  23. So, Hey John, Hows the weather in Wasilla? Sarah said it was 57 the other day? What’s it like?

  24. Yes, John, it was when she quit.

    I’m not making a “claim”. It’s what is known as a fact.

    Is it fair to blame her for that entirely? No. However, she also left Wasilla 22 million in debt, and that was entirely attributable to her poor decision to build the sports complex on land she didn’t have title to.

    I can understand that you want me to spend all my time backing up reality for you, but that would be a full time job, no?

    Anyone of our non Palin Cult readers who want to educate themselves can and will google it, if they haven’t already read the substantiating documents in previous stories.

    See, here in reality, we don’t ONLY trust Sarah’s book — and we allow people to use the googles and interact with the world at large and come to their own conclusions.

  25. Sarah Jones says “Let me spell it out for you very slowly:”

    Do you know what a publicly traded corporation is? Ever hear of stockholders? Who do corporate executives answer to?

    “Halliburton gets tons of no bid govt contracts”

    Halliburton has capabilities that no other companies have. Why don’t you start a competing company so you can bid against them.

    Bill Gates, George Soros, Warren Buffett and Lawrence Ellison, democrats ,and some of the richest men in the US.

    Cheney’s net worth, estimated to be between $30 million and $100 million compared to John Kerry’s $550 million.

    “Or, how about Enron?”

    Yeah, how about Enron? Didn’t that corporation blossom during the Clinton administration?

  26. crystalwolf aka caligrl says: “So, Hey John, Hows the weather in Wasilla?”

    Why not check the NOAA website. You can check all of Alaska.

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