US Lawmakers Cautious On Obama Bid To Restore Superfund Taxes

By Martin Vaughan Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--The Obama administration on Monday stepped up its push to reinstate lapsed environmental clean-up taxes on oil, gas and chemical producers. But lawmakers in Congress signaled that they will proceed with caution. The Environmental Protection Agency sent draft legislation to House Speaker Nancy Pelosi (D., Calif.) that would renew the taxes, which haven't been in effect since 1995. "Our taxes should be paying for teachers, police officers and infrastructure that is essential for sustainable growth--not footing the bill for polluters," said Mathy Stanislaus, assistant administrator for EPA's Office of Solid Waste and Emergency Response. Industry groups fired back that the proposed taxes will cost U.S. jobs, and some said the proposal appears to be an attempt by the administration to use the backlash surrounding the Gulf of Mexico oil spill to pass its agenda. "We assume that this is an effort to penalize BP [PLC] (BP, BP.LN) and the various oil producers, and we see ourselves as collateral damage in that," said Walter Moore, vice president of federal affairs at the American Chemistry Council. The group's members include Dow Chemical Co. (DOW), FMC Corp. (FMC) and W.R. Grace & Co. (GRA). Chemical producers note that they already foot the bill to clean up waste sites under the Superfund law's liability provisions. The trust fund, which is supported by the taxes, is tapped only to clean up "orphan" sites, or those where the responsible party is bankrupt. The taxes the administration proposed Monday include a tax of 9.7 cents per barrel on oil, a chemical excise tax of 22 cents to $4.87 per ton, and a broad-based corporate environmental income tax. Rep. Earl Blumenauer (D., Ore.) and Sen. Bill Nelson (D., Fla.) have championed proposals to renew the taxes. But few other lawmakers rushed forward Monday to embrace the administration's plan. The taxes come under the jurisdiction of the House Ways and Means and Senate Finance Committees, which have shown no eagerness in recent years to restore them. Senate Finance panel Chairman Max Baucus (D., Mont.) "is studying the administration's proposal very closely to determine the best step forward for taxpayers, our environment and the jobs that depend on it," said a Finance Committee Democratic aide. Drew Hammill, a spokesman for Pelosi, said the speaker "strongly supports the concept that polluters should pay for cleanup. "We'll be reviewing the administration's proposal in the days and weeks ahead." One Democratic congressional aide said lawmakers will be reluctant to impose a broad tax increase like the corporate environmental tax, in the midst of an economic recovery. The income tax, a 0.12% add-on to the corporate alternative minimum tax, accounts for about $1 billion of the $1.8 billion per year it is estimated that the taxes taken together would raise. At the same time, congressional pay-as-you-go budgeting rules have created a larger appetite for new revenue sources to offset new spending. Lawmakers might be driven, in the current deficit environment, to give the Superfund taxes a closer look. Congress has appropriated more than $1.2 billion per year in the past four years from the general fund to pay for Superfund cleanup, according to figures provided by Blumenauer's office. "The administration is on board, and I am committed to ensuring that the industries that had a hand in creating the problem will once again be held accountable for cleaning it up," Blumenauer said. -By Martin Vaughan, Dow Jones Newswires; 202-862-9244; martin.vaughan@dowjones.com (END) Dow Jones Newswires June 21, 2010 17:54 ET (21:54 GMT)