Politics

Freshman GOP lawmakers call out conservatives who support energy subsidies through the tax code

Chris Moody Contributor

A bipartisan House bill that would provide $5 billion in tax credits to the natural gas industry has the support of some of the most high-profile conservatives in the chamber, but two Republican freshman are claiming that the bill could hurt their colleagues’ free market credibility.

Republicans Mike Pompeo of Kansas and Raúl Labrador of Idaho are taking what is becoming a lonely stand against the “Alternative Transportation to Give Americans Solutions Act,” or NAT GAS Act, a measure with 186 co-sponsors that would extend up to $60,000 to companies that invest in vehicles that run on natural gas through tax credits. The bill is the result of years of a lobbying effort led largely by billionaire oil tycoon T. Boone Pickens, and enjoys wide support from both parties, including libertarian-leaning Texas Rep. Ron Paul and both co-chairmen of the House Progressive Caucus.

Citing the natural gas industry as just the latest example of the government “picking winners and losers” in the marketplace through the tax code, Pompeo on Friday unveiled a resolution that calls on Congress to end special tax credits and subsidies for all energy companies, including oil and renewable energy sources. The non-binding measure, which has only the support of a few Republican members, including Rep. Tom McClintock of California and Rep. Tim Huelskamp of Kansas, calls for an extension of the same tax benefits to all American companies instead of policies that target just one industry that lawmakers agree to fund.

“My resolution will begin the process of ending the bad policy of using taxpayer dollars to support targeted interests within the energy sector,” Pompeo said. “What we don’t need to do is to use our tax code to subsidize [energy companies], and pick them, and favor them. … I think it’s a fool’s errand when we try to predict it, and I think it’s bad policy when we do.”

Pompeo is an unlikely source of discontent within his caucus — he spent six years before running for Congress as the president of a company that sold equipment used to drill for natural gas — and the bill would likely provide a huge boost to his former friends and colleagues in the industry.

“It’s kind of an odd place for me to be,” he said.

The few members spearheading the effort against the bill also have the backing of some of Washington’s conservative powerhouses, including the Heritage Action, Grover Norquist’s Americans for Tax Reform and the Club for Growth. The organizations joined a coalition of about two dozen groups in March to send a letter to lawmakers urging them to vote against bills that subsidize certain energy companies through the tax code.

“We are writing this letter to express our collective concern over the massive increase in subsidies, set-asides and special treatment for politically connected energy sources that has largely defined American energy policy in recent years,” the letter read. “Instead of promoting a reliable and affordable energy industry, the subsidy-first energy policy that has prevailed the past three decades has created whole industries dependent on government and focused as much on ensuring their share of taxpayer largesse as they are on developing energy. This is no longer acceptable.”

Despite facing massive opposition from within the GOP, Pompeo’s efforts are making some small headway: Rep. Steve Pearce of New Mexico, once a co-sponsor of the bill, withdrew his support last week, citing concerns about the nation’s budget crunch.

“Congressman Pearce initially signed onto the bill because he believes its goal of promoting domestic energy jobs is well-intentioned,” Pearce spokesman Eric Layer told The Daily Caller. “However, further study revealed concerns over subsidies and other costs that the American people may not be able to afford during this difficult economic time.”

It is not yet clear if any other members plan to join him.

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