Mollohan Knocks Explosives Tax Out of Spending Bill

Mollohan Knocks Explosives Tax Out of Spending Bill

Congressman Alan B. Mollohan, D-W.Va., has derailed the Bush administration's plan to put a new tax on explosives, which are heavily used in West Virginia's coal mining industry.

"At a time when we are trying to decrease our dependence on foreign energy, it makes no sense to increase the cost of producing coal - our most plentiful and reliable source of domestic energy," Mollohan said.

President Bush called for the new "user fee" on explosives in his 2007 budget proposal for the U.S. Justice Department. Mollohan, who is the top Democrat on the panel that drafts the Justice budget, opposed the levy because of the harm it would cause to West Virginia's economy.

On the House floor Tuesday night, he argued that including the tax in the Justice Department spending bill also was a violation of House rules. Those rules prohibit any changes in existing law - such as a new tax - from being included in an appropriations bill.

Mollohan's "point of order" succeeded and the explosives tax was dropped from the measure.

"The Bush administration may have tried to sell this as a ‘user fee,' but in reality it was a tax and it would have hit West Virginia harder than any other state," he said.

As proposed by the administration, every pound of explosives sold in the country would have been subject to a 2-cent charge. The tax would have generated an estimated $120 million, with $16 million collected in West Virginia alone.

Mollohan said the president's proposal put Congressman Frank Wolf, who chairs the Justice Department spending panel, "in a difficult position." The Virginia Republican included a lower, 0.5 cent-per-pound tax in the bill that the panel sent to the House floor.

While calling the reduced rate an improvement, Mollohan said it still would unfairly target West Virginia's coal industry and should be removed from the bill.

The measure - without the explosives tax - is expected to pass the House later this week.

http://www.house.gov/mollohan/news06-28-06.htm