Ky. lawmakers blast federal budget’s proposed coal subsidy cuts
President-elect Barack Obama
By Halimah Abdullah — habdullah@mcclatchydc.com
WASHINGTON — President Barack Obama’s fiscal 2011 budget would cut roughly $2.3 billion in coal subsidies over the next decade, a move Kentucky lawmakers worry will mean heavy job losses in economically poor but coal-rich regions of Appalachia.
“Coal subsidies are costly to the American taxpayer and do little to incentivize production or reduce energy prices,” said a White House Office of Management and Budget analysis released Monday.
“Removing these subsidies would reduce greenhouse gas emissions and generate $2.3 billion of additional revenue over the next 10 years, an amount that represents only a small percentage of annual domestic coal revenues — about one percent over the coming decade.”
The cuts, along with the repeal of roughly $36 billion in subsidies to the oil and gas industry, is part of the Obama administration’s efforts to uphold an agreement struck last year during the G-20 summit in which member states committed to phase out fossil fuel subsidies to help reduce global greenhouse gas emissions by 10 percent.
Lawmakers from Kentucky, which relies heavily on the coal industry for jobs and cheap electricity rates, have vowed to block the proposed cuts.
“Senator McConnell opposes both the president’s proposed new national energy tax and the tax on coal included in his budget outline unveiled today,” said Robert Steurer, a spokesman for Senate Minority Leader Mitch McConnell. “Both would hurt Kentucky families who are dependent on coal for their livelihood.”
Rep. Ben Chandler, D-Versailles, who voted last year for a measure that would cap carbon emissions and fine companies that go over set limits, expressed concern over the Obama administration’s proposed budget cuts.
“We’ll have to examine the new budget proposal we received this morning, but we are very concerned about any possible impact this repeal could have on Kentucky jobs,” Chandler said.
Environmental groups applauded the cuts.
The president’s “budget promotes America’s energy independence by reducing our reliance on foreign oil, starting the transition away from dirty fossil fuels, and investing in conservation and clean power like wind and solar,” said Wesley Warren, director of programs for the Natural Resources Defense Council. “Cutting harmful greenhouse pollution and ramping up renewable energy will secure our nation and foster innovation that will make our economy more competitive.”
Lexington has the country’s largest “carbon footprint” per person — leading the nation in greenhouse gas emissions that most scientists think contribute to global climate change. Other Kentucky cities follow closely, including the Cincinnati-Northern Kentucky area and Louisville, according to a study of the nation’s 100 largest metropolitan areas by the Brookings Institution.
The coal mining industry has donated heavily to the state congressional delegation’s campaign war chests, but lawmakers say taxpayers’ purse strings, not politics, are at the heart of their opposition to the cuts.
“The president can’t have it both ways. You can’t seek to end our dependence on foreign oil and get America working, while at the same time imposing policies that harm domestic energy production and kill jobs,” said Rep. Hal Rogers, R-Somerset. “This is just another politically motivated assault that takes dead aim at coal, severely limiting coal companies in their ability to create jobs and keep production lines open. Worst of all, it hurts Appalachia’s hardworking coal mining families at a time when the commonwealth faces over 10.7 percent unemployment.”
Others said the cuts are ill-timed as the nation struggles to recover from an economic recession, foreclosures and high unemployment rates.
Republican Sen. Jim Bunning, who is retiring, encouraged the Obama administration to “refocus their attention on funding clean coal technologies, along with the commercial deployment of advanced technologies that are necessary to ensure the United States has clean, reliable, and affordable energy.”
Filed Under: Barack Obama • Ben Chandler • Federal Government • Jim Bunning • KY-5th • KY-6th • Mitch McConnell
About the Author: John Stamper is the accountability editor for the Lexington Herald-Leader. A native of Monticello, Ky., he has been with the Herald-Leader in a variety of roles since graduating from Western Kentucky University in 2000. Reach him at jstamper@herald-leader.com
So what’s up, coal corporations? Can’t you survive this based on your “free market” mantra?
Oh, I forgot, that ridiculous economic theory lost any credibility this last September.
Anne, the fact that these subsidies exists helps disprove the myth that we even have a free market. Remove the subsidies, as you should remove all subsidies for anything. The reality is that coal is cheap enough to mine that even without the subsidies, the loss of jobs and income will be minimal. Our electricity rates will go up, but if they existed because of false government intervention into the marketplace, then so be it. There is no free market, Anne. That is the entirety of the problem.
While I agree that coal, (gas, and oil) subsidies should go away, this statement by the White House is way wrong and wacky: “Removing these subsidies would reduce greenhouse gas emissions and generate $2.3 billion of additional revenue over the next 10 years”.
Once again the Obama administration demonstrates that they think we’re dumb enough to buy whatever they’re selling. How in the hell will the removal of subsidies “GENERATE” $2.3 billion of “ADDITIONAL REVENUE”. And how will removal of subsidies lead to lower carbon emissions? Those claims are absurd! They’re misleading. They’re a lie. And we’ve come to expect nothing less from the Obama Administration.
Bottom line is this: while oil, coal, and gas MAY have needed subsidies in the past, current prices don’t support the continuation of subsidies. Oil, coal, and gas have been able to stand on their own two feet for quite some time.
But Obama doesn’t have to make up some fairy tail about Higher/Greener Revenues in order to sell the idea.
These guys needlessly over-complicate everything.
I agree, cut corporate subsidies. the agriculture subsidies are ridiculous. it will cause a couple of years of pain and some companies will go out of business, but int he long run it will be better.
I do remember Obamama saying he wanted to “bankrupt” coal companies… hmmm
We’ll see how long the coal capitalists last without their federal teats to suck dry. Big Ag is next, and if you think king coal wails like a baby, wait till you hear the big corporate farmers.
Boo hoo.
horse, coal, tabaco should go away. Kentucky is so poor partly because of those ‘signature industries’.
Keep on supporting and electing those democrates. The next thing you know, the only person still working in KY will be the person who wrote this article!
I hope everyone is very good a gardening!
There were $2.3 billion in coal subsidies to cut? Wow. Can we cut the rest too?
If we have to use tax money to increase the profit margins of a corporation, could it at least be one that doesn’t destroy our water and air?
Funny to hear the out of state coal companies cry about the government subsides being cut for coal. How will that effect Kentucky coal being dug? Will the coal move or something? No. The jobs will still be in Kentucky, because thats where the coal is.
The coal industry sucks our state dry and they expect government dollars to do it. What a joke.
These Kentucky lawmakers should reveal how much they received from coal corporations.
True conservatives like myself applaud the removal of subsidies. A country with our debt does not need to be shoring up an industry. Yes, coal-based energy costs will increase, but this will be an incentive for the development of other types of energy–AKA business growth.
These so-called Republicans need to make up their minds if they want to support a free-market system, or if they want to support their lobbyists. You can’t have it both ways. Unless, of course, your constituants are ignorati.
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