May 20, 2010; Source: The Hill | Can you find any good news in the disastrous offshore oil leak in the Gulf Coast? Not one that compensates the region or the nation for one scintilla’s worth of the environmental damage caused by BP, but according to The Hill, members of Congress have discovered a way of using BP’s excise tax penalty payments for purposes other than the oil spill clean-up.
All of the excise tax proceeds are paid into the Oil Spill Liability Trust Fund, currently with $1.5 billion in assets. While the trust fund falls short of the $14 billion in estimated damages from the oil spill, clean-up costs paid for by the fund will take the place of direct federal expenditures, thus “saving” the government money. The “saved” moneys can then be used for other purposes, which Congressional Democrats hope will be summer jobs and municipal bonds.
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How is this possible? The Hill explained, “The accounting gimmick is possible because the Congressional Budget Office (CBO) only scores acts of Congress. Payments from the oil liability trust fund are merely administrative actions and therefore will not be counted by the CBO.” The “saved” moneys therefore can be used as offsets on new expenditures like expanded summer jobs programs and the proposed “Build America Bonds” program to subsidize municipal building projects.
We suspect that there are lots of potential programs that might be funded by this accounting mechanism that treats the trust fund as sort of “off the books” for CBO acounting purposes, especially if President Obama succeeds in getting BP to pay more than the $1 billion excise tax cap. If it does work to pay for a new or expanded round of summer jobs, nonprofits would be benefiting from the worst oil spill since the Exxon Valdez.—Rick Cohen