26 February 2009 23:53 [Source: ICIS news]
WASHINGTON (ICIS news)--US chemical, energy, housing and general business interests on Thursday blasted President Barack Obama’s $3,600bn (€2,844bn) budget proposal for fiscal year 2010, warning it will deepen the recession and raise energy costs.
Obama sent his massive budget proposal to Congress on Thursday, outlining major tax increases on upper income Americans, businesses and energy companies in particular in order to pay for an expanded national health care plan and alternative energy research and production.
The budget also assumes significant revenues in 2012 from a federally mandated cap-and-trade emissions control plan that is still in the early stages of discussion in Congress.
Charlie Drevna, president of the National Petrochemical & Refiners Association (NPRA), said Obama’s budget “will do more harm to American businesses than help”.
“Asset and wealth transfer is a recipe for job loss, higher consumer energy costs and diminished energy security,” Drevna said.
“The costs and other challenges associated with implementing a cap-and-trade scheme for regulating greenhouse gas emissions have been well documented,” he said.
Drevna and other business leaders also criticised the budget proposal’s elimination of tax credits for energy companies. Repealing those tax credits “will only weaken, not strengthen our nation’s energy security by stifling both the will and the ability to increase domestic oil and gas production”, he said.
Jack Gerard, president of the American Petroleum Institute (API), also criticised the budget’s cutting of tax credits for oil and gas development firms.
“More taxes could reduce our nation’s energy security by discouraging new investment in domestic and natural gas production and refining capacity and pushing those investments - and American jobs - abroad,” he said.
The Independent Petroleum Association of America (IPAA) called Obama’s budget “a devastating blow to the American oil and natural gas industry in proposing an astonishing $30bn tax increase on American energy producers, most of whom are small businesses”.
“These proposals make no sense during this economy when increased American energy could result in new jobs and more tax and royalty revenues,” IPAA president Barry Russell said.
Bruce Josten, executive vice president for government affairs at the US Chamber of Commerce, said that “the president’s disappointing budget proposal appears to move in exactly the wrong direction”.
“More taxes, heavy-handed regulations, and command-and-control government will not hasten recovery,” Josten said. “Instead, it will delay it and do so at a terrible cost to taxpayers, businesses and working families.”
“You don’t build a house by blowing up its foundation,” Josten added.
The budget proposal also raised alarm in the long-troubled
“With the housing market still reeling from its worst downturn since the Great Depression, this is not the time to talk about raising taxes on home buyers and home owners,” said Joe Robson, chairman of the National Association of Home Builders (NAHB).
Robson said the proposed budget will increase the cost of housing for many middle-class families in high-cost real estate areas such as
“The notion of robbing Peter to pay Paul just won’t work,” Robson said.
Robson was joined by Charles McMillan, president of the National Association of Realtors (NAR) who said that “There is never a good time to propose something that undermines the basic foundation of homeownership, but given our current housing crisis, this has to be the worst possible time.”
The National Association of Manufacturers (NAM) said that the “high taxes and anti-investment provisions proposed in the administration’s budget plan will stifle our economy’s ability to recover, grow and create jobs”.
The US Chamber’s energy unit said that “perhaps the most troubling piece of the budget is the assumption that the government will be collecting significant revenues from a cap-and-trade system by 2012”.
“Assuming such revenues without a full and thorough national debate is premature and ignores the political process and the principal need to determine the economic impact on our nation’s industries and citizens,” the chamber said.
($1 = €0.79)
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