With the task of slashing federal spending levels by as much as $1.5 trillion over the next decade, the congressional bipartisan, bicameral debt "super committee" has its work cut out for it. But a new report called Green Scissors 2011 may offer a starting place toward finding a passable solution.
The report offers a kind of give and take between the right and left: Tackle wasteful federal subsidies, while protecting the environment. Its sponsors, which include a range of political groups from Friends of the Earth, a progressive environmental organization, to conservative free-market advocate the Heartland Institute, represent a genuine bipartisan consensus—one that they can only hope transfers to the halls of Congress later this year. [See a gallery of political cartoons on the economy.]
Subsidies, as the contributors to Green Scissors have realized, are a good place to find common ground. For one, while conservatives and fiscal hawks are mostly against revenue increases to the federal government, genuine subsidies—generally defined by those on the right as narrow carve-outs that disrupt the free market and favor certain industries and special interests over others—are often an exception. So, with the mentality that the fewer subsidies the better, they've met progressives and green advocates halfway to at least start with repealing subsidies that negatively affect the environment.
Energy subsidies make up a huge bulk of the $380 billion worth of cuts on the Green Scissors list. It's no surprise that subsidies to fossil fuel industries—like royalty relief and manufacturing tax deductions for the oil and gas industry—made it, but the report also targets incentives for the presumably cleaner nuclear industry and alternative energy sources like biofuels. [Read more about energy and the environment.]
The report does not account for jobs presumably lost in the industries affected, however, and it also leaves out a whole host of subsidies that may not pose an apparent environmental risk. So, the energy industry, as well as the agricultural industry and others subsidized by the federal government, could push back on such recommendations if the "super committee" decides to take them seriously. "While these cuts are the low-hanging fruit, we're not maintaining that they're going to be easy to make," says Heartland Institute Vice President Eli Lehrer.
Even so, with little bipartisan wiggle room elsewhere, this report surely gives warning to the energy industry that subsidies like these could be first on the "super committee" chopping block.