Sen. Bernie Sanders and Rep. Ilhan Omar introduced legislation Thursday that would eliminate dozens of tax loopholes, subsidies, and other federal giveaways to the fossil fuel industry and cut off U.S. support for international oil and gas projects that are contributing to the global climate crisis.
If passed, the End Polluter Welfare Act of 2021 would save the federal government an estimated $150 billion over the next decade—money that Omar (D-Minn.) said should be spent on providing assistance to families hit hard by the coronavirus pandemic.
"Our resources should go to helping the American people get through this crisis—not providing giveaways to the very people responsible for polluting our water and lands," said Omar. "We should be fighting for a greener, more equitable future for all instead of making the fossil fuel industry more profitable. I'm proud to be in this fight to end the welfare system for fossil fuel companies and invest those resources back to the American people."
A summary (pdf) of the new legislation released by Sanders' office identifies the specific loopholes and "absurd corporate handouts" the bill would target, including:
- The 15% income tax credit for advanced oil recovery investments;
- The ability of oil and gas company owners and investors to use losses from fossil fuel investments to shelter other income;
- Special deductions related to cost of compliance with EPA low-sulfur pollution rules for certain oil refineries;
- Refined coal's eligibility for the Renewable Electricity Production Credit;
- Tax credits for construction of advanced coal plants; and
- A provision that allows oil and gas companies to minimize the value of their inventories for tax purposes.
The bill, endorsed by dozens of environmental and human rights organizations, would also eliminate taxpayer-funded research and development programs for the fossil fuel industry and ensure the solvency of the Black Lung Disability Trust Fund—which pays benefits to retired miners—by hiking the excise tax rate on coal.
"We should be fighting for a greener, more equitable future for all instead of making the fossil fuel industry more profitable."
—Rep. Ilhan Omar
"The conduct of oil and gas companies, toward American taxpayers and the distortion of the truth about climate change, is one of the biggest scandals of our lifetime," Sanders (I-Vt.) said in a statement Thursday.
"At a time when scientists tell us we need to reduce carbon pollution to prevent catastrophic climate change, and when fossil fuel companies are making billions of dollars in profit every year," the Vermont senator added, "we have a fiscal and moral responsibility to stop forcing working families to pad the profits of an industry that is destroying our planet."
In a Thursday letter (pdf) endorsing Sanders and Omar's proposal, 85 advocacy groups call the End Polluter Welfare Act "the most comprehensive legislative proposal to address the billions in special interest subsidies that disproportionately benefit the oil, gas, and coal industries."
"These subsidies include century-old tax loopholes, giveaway leasing rules for extraction on our public lands and waters, and the misallocation of billions for fossil fuel projects through export credit and development finance agencies," the letter reads. "The End Polluter Welfare Act is an opportunity to advance key climate and public health priorities while raising revenue for much needed investments in a more just and resilient society."
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The legislation is co-sponsored by Sens. Jeff Merkley (D-Ore.), Ed Markey (D-Mass.), Cory Booker (D-N.J.), Chris Van Hollen (D-Md.), and Elizabeth Warren (D-Mass.) in the Senate and Rep. Nanette Diaz Barragán (D-Calif.) in the House.
Fossil fuels are destroying our planet — yet the federal government gives oil, gas & coal companies nearly $15 BILLION a year in federal subsidies. This must end.https://t.co/ytQDyZUJeh
— Friends of the Earth (Action) (@foe_us) April 15, 2021
The introduction of the bill came as Sanders, chairman of the Senate Budget Committee, convened a hearing on the costs of inaction on the climate crisis. The Vermont senator invited the CEOs of Exxon, BP, and Chevron to testify before the committee, but none of them agreed to participate.
"The scientists have told us that the cost of climate inaction may put the entire planet and life as we know it in serious jeopardy," Sanders said in his statement kicking off the hearing. "If we do nothing, the effects of climate change will lead to the deaths of one and a half million people across the globe every single year from factors such as malnutrition, heat stress, and tropical diseases such as malaria."
"If we do nothing, the effects of air pollution in the United States will lead to the deaths of almost 300,000 Americans between now and the year 2030," Sanders continued. "If we do nothing, the effects of climate change will throw over 100 million people throughout the world into extreme poverty."
Watch the hearing: