Yesterday, President Obama sent a letter to congressional leadership urging them to eliminate unwarranted tax breaks to the oil and gas industry in light of high gas prices. This is a common sense step to deal with our energy challenges. But oil prices aren’t the only prices hitting American wallets hard. Volatile food prices that have rocketed to new heights have also lead to major consequences for American consumers and poor people around the globe. Luckily, the President’s letter offers a pretty strong foundation for some concrete steps he could take to deal with the impact of high food prices: cut subsidies to the ethanol industry that drive price volatility. In that spirit, here’s a little thought experiment on what such a letter might look like:
Dear Speaker Boehner, Senator Reid, Senator McConnell, and Representative Pelosi:
I am writing to urge you to take immediate action to eliminate unwarranted tax breaks for the
oil and gas
ethanol industry, and to use those dollars to invest in reducing the crushing burden of high and volatile food prices on the poor
clean energy to reduce our dependence on foreign oil.
oil and gasoline and volatile food prices are weighing on the minds and pocketbooks of every American family and the nearly one billion people who go hungry every day. While our economy has begun to recover, with 1.8 million private sector jobs created over the last 13 months, too many Americans are still struggling to find a job or simply just to pay the bills. The recent steep increase in food prices, driven by increased global demand and compounded by unrest and supply disruptions across the globe in the Middle East, has only added to those struggles, and undermined global stability and security. If sustained, these high and volatile prices have the potential to drive tens of millions more into hunger and poverty, put our national security at risk, and slow down the pace of our economy’s growth at precisely the moment when we need to be accelerating it.
While there is no silver bullet to address rising
gas food prices in the short term, there are steps we can take to ensure the American people and people in poverty don’t fall victim to skyrocketing gas food prices over the long term. One of those steps is to eliminate unwarranted tax breaks to the oil and gas ethanol industry and invest that revenue into energy to reduce our dependence on foreign oil increasing economic opportunity for poor people. Our outdated tax laws currently provide the oil and gas ethanol industry more than $4 $6 billion per year in these subsidies, even though oil food prices are high and the industry is projected to report outsized profits this quarter. In fact, in the past CEO’s of the major oil food companies made it clear that high oil food prices provide more than enough profit motive to invest in domestic exploration and production without special tax breaks. As we work together to reduce our deficits, we simply can’t afford these wasteful subsidies , and that is why I proposed to eliminate them in my FY11 and FY12 budgets.
I was heartened that
Speaker Boehner yesterday expressed openness to eliminating true bipartisan support exists to eliminate these tax subsidies for the oil and gas ethanol industry. Our political system has for too long avoided and ignored this important step, and I hope we can come together in a bipartisan manner to get it done.
In addition, we need to get to work immediately on the longer term goal of reducing our dependence on foreign oil without negative impacts on food security, poverty and global stability and ending our vulnerability to price fluctuations this dependence creates. Without a comprehensive
energy strategy for the future we will stay stuck in the same old pattern of heated political rhetoric when prices rise and apathy and neglect when they fall again.
I recently laid out my approach to a comprehensive strategy in my US Global Development Strategy which includes important initiatives including Feed the Future and a Global Climate Change initiative which will invest in increased agricultural productivity and help protect poor people from increasingly extreme weather conditions caused by climate change.
Blueprint for a Secure Energy Future, which includes safe and responsible production of our domestic oil and gas resources and doubling down on fuel efficiency in the transportation sector while investing in everything from wind and solar to biofuels and natural gas. None of you will agree with every aspect of this strategy. But I am confident that, in many areas, we can work together to help show the American people that we can make progress on a n energy policy that creates jobs and makes our country more secure.
And I hope we can all agree that, instead of continuing to subsidize yesterday’s energy sources, we need to invest in tomorrow’s. We need to invest in a 21st century clean energy economy that won’t undermine food security and global stability and will keep America competitive. In the long term, that’s the answer. That’s the key to helping families avoid pain at the grocery store and the gas pump and reducing our dependence on foreign oil.
Read the rest of this entry »