June 23rd, 2004

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Energetic to Subsidize Energy

Wednesday, June 23rd, 2004

Take away an inch from Congress’s special-interest friends and supporters, and Congress moves heaven and earth to give that inch back, plus a mile more. Sometime back the World Trade Organization ruled that a particular export subsidy was a breach of international trade agreements. The European Union could legally retaliate with tariffs. High ones. So bye-bye subsidy. But wait!

Why not give money to the favored interest another way? Tax credits would get around the WTO, so special tax breaks were devised, just for companies in select industries and states. In a recent column, Bob Novak listed some of the recipients:

  • Shopping centers and malls
  • Regional and intercity rail service
  • Natural gas companies
  • Coalbed methane gas production

Most of these are earmarked for congressional districts, so the special bond issue to the tune of 227 million bucks won’t spread too thin among the nation’s malls. Just a few malls get the money. Spending tax money on railroads has become a tradition, so who’s shocked by another billion or so? And we’re all worried about “energy,” so encouraging new technology makes sense, right?

Well, the coalbed gas producers had been getting along fine without subsidies. All these hidden subsidies amount to far more than the one they replaced. And Congress snuck all this into a bill that had nothing to do with energy. It hasn’t passed yet. But, knowing our Congress, it will. What a waste in money, time and . . . energy.

This is Common Sense. I’m Paul Jacob.