Politics
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Energy tax credit bill divides conservatives, even splits Ron Paul from group he founded

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Chris Moody
Contributor

The House is expected to consider a bill soon that would offer $5 billion in tax credits to the natural gas industry, a proposal that is causing a split among conservative members and groups.

The bill, called the The New Alternative Transportation to Give Americans Solutions, or NAT GAS Act, would provide a generous tax credit to transportation companies that buy a vehicle that runs on natural gas. The measure has 180 bipartisan co-sponsors, including many of the chamber’s most conservative Republican members. But some are crying foul over the special treatment that the government would be providing to the natural gas industry, arguing that it is not Washington’s role to “choose winners and losers” by offering tax credits to promote one energy industry over another. The bill’s proponents, however, say promoting natural gas — a plentiful resource in the United States — will help wean the country off foreign oil, provide resources to alternative energy sources and increase the nation’s energy security.

A coalition of nearly two dozen free-market and conservative groups sent a letter to members of Congress in March urging them to avoid new subsidies and tax credits, and they plan to blast anyone — especially Republicans — who do.

The divide is so deep in fact, that it has even split the libertarian advocacy group Campaign For Liberty, a co-signer of the March letter, with its founder, Texas Republican Rep. Ron Paul, who is co-sponsoring the tax credit bill. Paul discussed his support for tax credits during a recent interview with MSNBC, arguing that they are not subsidies, as his critics would call them, but rather another form of tax reductions.

“I don’t consider any tax break as a subsidy. That was not a spending bill, that was not a grant,” Paul said, referring to tax credits for oil companies, a separate bill that Congress plans to take up soon. “I vote to always give tax credits, and I always cut spending.”

But the letter calls for an end to “spending through refundable credits in the tax code,” which Paul supports.

On Capitol Hill, members of the Republican Study Committee — one of the most conservative House caucuses — are divided as well. (The bill was originally introduced by a RSC member, Oklahoma Rep. John Sullivan.) But during an Energy and Commerce Hearing last week, Kansas Republican Rep. Mike Pompeo, also a RSC member who, incidentally, made a fortune in natural gas, ripped into the bill.

“I can’t understand for the life of me why we’re talking about all these subsidies, all these handouts, all this taxpayer money going to help these industries as if we know best which technology will ultimately but the victor,” Pompeo said during the hearing.

A spokesman for RSC Chairman Jim Jordan said the Ohio Republican is “still reviewing” the bill and has not taken a public stand.