Pete Sepp is executive vice president of the National Taxpayers Union.
President Obama released his Fiscal Year 2013 budget proposal Monday, with an opening "bid" (i.e., a pledge on current and future taxpayer dollars) of $3.8 trillion. Of course, the administration covers a lot of departments and agencies in this fiscal pitch to Congress. Yet, his latest blueprint does contain the seeds for big spending during a potential second term on Pennsylvania Avenue. Despite a dip in nonentitlement expenditures between now and 2015, overall the annual federal budget will keep growing, to more than $4.5 trillion when Fiscal Year 2017 would begin during the final months of his presidency.
Indeed, if President Obama's first term is any indication of his forthcoming vision for federal cash flows, then we are still in for more trouble. A case in point: the administration's latest attempt to lure American corporations into renewable energy investments. As Wall Street Journal reporter Ryan Tracy reported late last week, this "Energy Department-led effort includes a planned March 13 meeting at which senior financial-firm executives and Energy Secretary Steven Chu would speak," targeting 79 of the nation's biggest corporations.
This is all an effort to help the renewable energy industry after, according to the Journal, "a government grant program expired." It's the latest incarnation from the complex world of tax-equity financing, spun from the federal energy policy bureaucracy. Ironically, we all know what also expired after substantial government backing: more than 1,000 jobs and hundreds of millions of dollars once under solar energy company Solyndra's charge.
The interesting thing is many of the companies that will be pitched by the Energy Department during this upcoming symposium—i.e., large oil and gas firms—haven't asked for government handout schemes like these, even as alternative energy companies continue to lobby for various policy favors. And while some lawmakers lambast so-called "Big Oil" and its "tax breaks", the industry has been busy rejuvenating communities across the nation.
Our economy continues to languish, yet the president's budget proposal will, over the next 10 years, spend a whopping $47 trillion—on average, 22.5 percent of our annual gross domestic product. It also calls for tax hikes that would devour a steadily increasing share of GDP each year for the next decade—which, if it actually happens, would constitute a postwar record. One target of the tax-and-spend policy would be … the oil and gas industry, singled out to be stripped of tax provisions available to many other sectors.
This is not the answer to getting our fiscal house in order. If the health of the nation, not another four years in the Oval Office, is the president's goal, here are a few better alternatives: nix the more than $40 billion tax hike proposed for America's oil and gas companies, simplify the tax system for everyone, get a handle on federal spending, rein in unproductive energy subsidies, and glance over this insightful study on the future trajectory of America's investment tax rates.