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The Western Caucus

Location: Washington, DC

Mr. Speaker, the Western Caucus has several members here tonight. We would like to talk about what is going on right now in the country. The administration seems to be waging a war on the western jobs, and that is carried out through a whole range of activities.

A couple of weeks ago, the administration and the President said that the administration is not doing enough to address the high gas prices. The President said in a speech at Georgetown that he would like to cut foreign oil by one-third by drilling at home. Well, we have been in the process of offering him the solution to what he said he would like to do.

Now, keep in mind that while the President is saying one thing, he's doing another.

While he says that we would like to drill for more oil here, understand that
he has increased the moratorium on the offshore drilling. They have made it more difficult to drill in on-land areas through the Rocky Mountains. Know that they rejected Shell Oil Company's $4 billion NEPA study because a paragraph was omitted.

So while we are hearing bold language from this administration about increasing the amount of oil that we are drilling here at home--and that would create American jobs but it would also create lower energy prices--understand that it appears that the President is not following through on what he said.

So in the past couple of days, this Congress, this House, has passed out H.R. 1229, which says that we are going to put the people back to work in the Gulf of Mexico.

I think everyone understands that BP is accountable and should be accountable for the problems that they caused, but we should not have killed 100,000 jobs offshore.

Our Nation is stuck at 9 percent unemployment. We are stuck with a deficit that is having to be financed by our own Federal Reserve. We are putting the Nation's economy at risk because of the way that we are treating jobs and because of our deficit.

So we are saying: Put the American workers back to work in the Gulf, produce American oil, produce American jobs, and bring lower prices of gasoline to the consumer.

The same bill improves the safety by reforming current law. It sets timelines for the Secretary to act on permits to drill. Right now, one of the things that the Secretary is doing is holding off approvals for those applications for permits to drill, the APDs. Know that the administration has within its power to improve the situation with jobs immediately, but instead they are doing the things that harm our work.

H.R. 1229 also establishes expedited judicial review processes.

We also have passed in this House H.R. 1230, which says we are going to restart the American Offshore Leasing Now Act. It passed last week. It requires that the four lease sales in the gulf and Virginia take place. Those lease sales were previously scheduled, but instead of going ahead with them, the administration has put them on hold. Let's simply produce the energy which has been verified to be there, which would create American jobs and which would aid American consumers by lower prices of gasoline.

H.R. 1231 has also been passed, which reverses President Obama's offshore moratorium. The President made a big deal just after he was sworn in 2 years ago about reversing the moratorium. But after one analyzed the moratorium that he reversed, we actually saw that he increased the moratorium, that more areas were put off limits to drilling rather than the message that he gave the American people.

So H.R. 1231 says to the President: We would like for you to join us in creating American jobs, jobs that the West would be proud of, jobs that would produce energy, jobs that would produce high-paying careers and not just jobs. We believe that these are the things that the American people are looking for. This is the leadership that they are asking for out of Washington.

H.R. 1231 requires each 5-year offshore leasing plan to include lease sales in areas containing the greatest known oil and natural gas reserves. Our offshore areas are tremendous reserves of energy. All we have to do is tap into them and use them. It requires that the Secretary establish a production goal when writing a 5-year plan.

I am joined tonight by several members of the Western Caucus. Each one has got their own particular interest area where the administration appears to be conducting a war on western jobs. So tonight, to lead off, I would like to yield time to my good friend Cynthia Lummis from Wyoming such time as she would consume.


I thank the gentlelady for her comments.

We are joined tonight by my good friend Mr. Thompson from Pennsylvania. Before I yield time to him, I would like to walk through just a brief list of some of the other ways that the government conducts war on Western jobs.

Consider the listing of endangered species. No one of us wants to see a species be extinct or go extinct, but what we have seen is an extreme interpretation of the rules which kill jobs at the same time. I think there are ways that we could keep jobs and preserve species, yet we are not doing that right now.

The Coho salmon was listed as endangered. As a result, the farmers in the Klamath Basin in Oregon have been forced into bankruptcy due to prohibitions on water use by the listing of the salmon.

The Methow salmon, water rights holders in the Methow Valley of Washington lost the use of their water, and property owners and timber owners face restrictions on their properties because of the imposition of egregious stream buffers to protect the listed salmon.

The listing of the salmon in general, the court case over whether hydroelectric dam operators have done enough to prevent the death of salmon in Washington and Oregon, billions of dollars have been spent to accommodate, according to Bloomberg Business Week, but the environmental groups continue to sue.

The northern spotted owl, the listing has killed the entire timber industry in much of the West, especially in northern California and Oregon. The Mexican spotted owl, that listing also killed the timber industry in New Mexico and Arizona. Hundreds of thousands of jobs have been lost.

The Delta smelt, the listing of that species, a small 2-inch fish that lives in the San Joaquin Valley, killed 27,000 jobs there. The San Joaquin Valley was the source of 80 percent of our Nation's vegetables. Now those vegetable farms are gone. Bankruptcy. We are now importing food from countries that can spray pesticides that are outlawed in this country, so our food supply is less safe. Fewer jobs, bigger government deficit, greater cost of vegetables and unsafe food supply.

The gray wolf was listed by the Fish and Wildlife Service as endangered and has killed agriculture and mining jobs throughout the West. Still the list goes on and on. So it is not that these are just hypothetical ideas that the war on Western jobs is occurring by a government. These are ongoing processes.

One group, the Center for Biological Diversity, has declared they are going to list over 1,000 species this year, that they are going to petition for the listing of over 1,000 species this year. Understand that their lawyers get reimbursed at the rate of $350 to $500 per hour. For every lawsuit that they bring against the government, every lawsuit that kills jobs provides employment for lawyers in those groups, so know that the taxpayer is footing the bill but yet losing jobs in the meantime.

I would like to recognize Mr. Thompson now, and thank him very much for being here tonight.


I thank the gentleman from Pennsylvania for his comments. So far, the quote of the night is ``prosperity is a good thing.'' Yet our government seems to have a war on prosperity. Why is our government trying to undermine the economy when we're struggling with high deficits and unemployment? It defies imagination that that's going on.

I would like to recognize now my good friend from Georgia (Mr. Broun) for such time as he may consume. I appreciate your being here. Georgia and Pennsylvania in the Western Caucus, that's the way it should be. We're west of somewhere. Thank you for being here tonight.


I thank the gentleman from Pennsylvania for his comments. So far, the quote of the night is ``prosperity is a good thing.'' Yet our government seems to have a war on prosperity. Why is our government trying to undermine the economy when we're struggling with high deficits and unemployment? It defies imagination that that's going on.

I would like to recognize now my good friend from Georgia (Mr. Broun) for such time as he may consume. I appreciate your being here. Georgia and Pennsylvania in the Western Caucus, that's the way it should be. We're west of somewhere. Thank you for being here tonight.


I thank the gentleman for his comments and his perceptions.

As he mentioned, it seems that Washington has a war on profits. I think that maybe our friends on the other side of the aisle don't understand that profits pay high salaries. If you work in an industry with no profits, you work at low salaries.

Profits pay to reinvest in new buildings, creating construction dollars in neighborhoods. Profits are put into youth training, baseball leagues, soccer leagues. Profits are reinvested into new equipment, causing manufacturing firms to thrive. Profits are invested in dividends, and they cause increased values of stocks, helping retirees.

And, finally, profits are the only thing that corporations pay tax on. They do not pay taxes on losses. So when we begin to talk about taking away the profits of companies, understand that we're talking about undermining the American way of life. This attack on profits is an attack on the American way of life.

I am pleased to be joined tonight by a good friend from Utah (Mr. Bishop), and I yield to the gentleman.


I thank the gentleman for his comments. He pointed out that this Nation is rich in shale oil. We do, in fact, have 2 trillion barrels in reserve in shale. That all was outlawed from use by the American consumers back in 2007 in a bill passed by Nancy Pelosi off the floor of the House.

To put that in perspective, what does 2 trillion barrels of shale oil mean? We have only used 1 trillion barrels of oil completely in our history in just shale oil. That's not natural gas. That's not normal petroleum. We have double in shale oil what we've consumed up to this point.

Another comment that was made earlier is that we subsidize and that consumers end up paying for things that they don't know they're paying. I just talked to a constituent last week. He said that he was given a tax credit for 40 percent of a solar facility that he put on his own home. That was from the Federal Government; from the State government, another 10 percent. So about 50 percent of the cost of the program was completely reimbursed by the government. But the big deal is they're paying him 22 cents per kilowatt hour of energy that he is able to sell back into the system. Now, that 22 cents needs to be compared to the 7 cents that electricity normally costs. So the consumer is tagged with three times the cost of electricity that is provided by solar power that is bought from individual producers. The consumer will pay more for the power. It is not an easy process to understand, but consumers will ultimately pay all of the higher energy costs.

We hear much today in Washington about the subsidies for Big Oil. Be aware that there are no subsidies for Big Oil. There are simply write-offs that every company is allowed to take legally; write-offs to encourage them to invest in machinery; write-offs that sound like depreciation, amortization; write-offs that are allowed by accounting techniques across the board in this country. Understand that when we begin to penalize these oil companies, we're going to cost America jobs.

So let's talk just a bit about the different

supposed subsidies that are, in fact, legitimate write-offs that companies are given.

The suggestion was made that we repeal the expensing of the intangible drilling costs. The intangible drilling costs usually represent 60 to 80 percent of the cost of a well. Historic U.S. policy allows a deduction for development. That's since 1913 in this government's Tax Code; and yet, today, we're talking about reversing it at a time when we're starving for jobs, 9 percent unemployment, and we're going to talk about making it harder to employ people in this country.

Other businesses are able to expense their research and development projects. Pharmaceutical companies, IEC specifically targets U.S. oil and gas companies. It will discourage innovation in the energy sector at a time when we need more innovation, not less. Disallowing the expensing of intangible drilling costs will put the American consumer in a worse position and endanger American jobs.

The second idea that's talked about in raising taxes for oil companies is to do away with the write-off, the dual capacity rule. The dual capacity rule was to ensure that income that is taxed by another nation is not also taxed by the U.S. It's something that the U.S. has been alone on in taxing double. We tax not only the amount that is made here but the amount that is made in other countries, the profits made in other countries. That's a tax inversion that has cost us many jobs.

Now then, we have the allowance of dual capacity rule in place to stop that, and yet our friends on the other side of the aisle are saying that we must stop this practice. All it's going to do is make the U.S. more inhospitable for investment in energy resources. At a time when we're seeing $4 gasoline, at a time when our economy is struggling, when we need jobs, we're talking about making American businesses less competitive and making American jobs more scarce.

The final section is maybe the most egregious of all, that is, the repeal of section 199 manufacturing exemptions for oil and gas companies. In 2004, the Congress enacted section 199 for manufacturing companies to encourage them to bring jobs back to this country. From 2004 to 2007, the oil and gas industry was responsible for 2 million new jobs that were created. The oil and gas companies currently support 9.2 million jobs. Almost all manufacturers receive a 9 percent credit. That's, again, in order to encourage them to come back to this country.

The oil and gas companies have only been receiving a 6 percent credit because they've already been picked on by the people in this town. But now they're suggesting that we would want to completely do away with the manufacturing credit. Keep in mind, that's the refining of gasoline. That's the definition of manufacturing in oil and gas.

So at a time when we're starving for jobs, we're going to make U.S. manufacturers, the U.S. refineries, less competitive. We're going to encourage Venezuela and Hugo Chavez to send more jobs there, to take more jobs and to send more gasoline here. It just doesn't make sense.

Tonight, I'd like to wrap up with this one picture about the status that our country is in. Our country right now has a tremendous problem with its economy. The problem is this: in Washington, we spend $3.5 trillion. Our revenues to the government are $2.2 trillion. That's a $1.3 trillion deficit. The accumulated deficits over the lifetime of this country are almost $15 trillion.

I show those deficits running out the end of the pipeline into our debt barrel to show the accumulated debt to the Nation. I also show a green sludge pouring over the edge of the barrel because we've got $202 trillion of accumulated costs of Social Security, Medicare, and Medicaid. These are the things that are wrecking our economy.

This chart given by OMB and CBO, the Congress, and the White House both show that our economy is going to fail in 2038 because of these practices. At a time when we're starving for jobs, this administration has a war on western jobs. It has a war on our energy. It has a war on the jobs in the timber industry. It has a war on our way of life.

This is not the time to be conducting partisan politics in this town. It's a time for us to create jobs. With each job created, the 2.2 is greater because each person pays in increment more taxes, but they also are no longer receiving welfare, unemployment, and food stamps. So the 3.5 decreases.

The path forward is simple. We simply ask that the President get on board.

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