Reducing the Deficit and Funding Transportation Investment: A Perfect Use for Oil Subsidies

As part of his deficit reduction plan, President Obama has recommended eliminating about $41 billion in subsidies to the oil and gas industry.

Getting rid of cushy tax breaks for Big Oil is long overdue. Using that money to pay for the American Jobs Act is smart energy policy as well as smart economic policy.  With the specter of a double-dip recession looming, the need for wise investment and jobs creation becomes critical. We need to make sure that every taxpayer dollar is going where it will do the most good. It will be difficult for oil companies to justify their need for a helping hand, especially when Americans know the hard truth about oil – no matter how much we drill, we do not have the ability to drive down oil prices. 

Eliminating tax breaks for the oil and gas industry helps level the playing field for the clean energy industry, which already employs more people than the fossil fuel industry and could be a major source of new jobs in the coming decades. Investing those billions in rebuilding our infrastructure will create jobs in the hard-hit construction and manufacturing industries and, when invested using targeted, performance-based criteria, including a strong fix-it-first policy, can also start us off on the long-term infrastructural changes -- such as faster, more efficient, more accessible public transit --that will reduce our dependence on oil.  As I mentioned in my previous post on creating jobs through infrastructure, public transit investment can create twice as many jobs as highway investment.

So using former oil subsidies to create infrastructure that reduces our oil dependence really brings the President’s jobs proposal into the clean energy realm. And his approach couldn’t be more different from what John Boehner suggested to the Economic Club of Washington last week. The Speaker also attempted to link infrastructure spending and energy, albeit in a convoluted, politically expedient way.

Boehner told his audience that while he supports “responsible spending to repair and improve infrastructure,” he thinks it makes sense to link the new transportation bill to expanded, “American-made energy production,” and that we need to remove some “unnecessary government barriers” that prevent that expansion.

Translation? As Tim Noah of The New Republic put it: The price of passing the long-term transportation bill will be "drill baby, drill."

So Boehner will relax his opposition to infrastructure investment only if we loosen up the rules governing the industry that gave us the Deepwater Horizon disaster and spilled 42,000 gallons of oil into the Yellowstone River this summer? 

We’ll take the clean energy please. And the jobs, too.