A Magic Way To Make Billions (*Co Budget Boondoggle)

[UpInArms]

http://www.time.com/time/magazine/printout/0,8816,1167729,00.html

The wording is so bland and buried so deep within a 324-page budget document that almost no one would notice that a multibillion-dollar scam is going on. Not the members of Congress voting for it and certainly not the taxpayers who will get fleeced by it. And that is exactly the idea.

With Washington reeling from the Abramoff lobbying scandal and Republicans and Democrats alike pledging to crack down on influence peddling, with one lawmaker already gone from Capitol Hill because he traded favors for cash, you're probably guessing this isn't the best time for members of Congress to dispense a fortune in favors to their friends.

Guess again.

Buried in the huge budget-reconciliation bill, on which House and Senate conferees are putting the final touches right now, are a few paragraphs that accomplish an extraordinary feat. They roll back the price of a barrel of crude oil to what it sold for two years ago. They create this pretend price for the benefit of a small group of the politically well connected. You still won't be able to buy gasoline for $1.73 per gal. as you did then, instead of today's $2.28. You still won't be able to buy home heating oil for $1.60 per gal., in place of today's $2.39. But a select group of investors and companies will walk away with billions of dollars in tax subsidies, not from oil but from the marketing of a dubious concoction of synthetic fuel produced from coal and dependent on government tax credits tied to the price of oil.

<snip>

Today about 55 such plants around the U.S. process 125 million tons of coal or, in many cases, coal waste from an earlier mining era. For owners and operators, the whole point isn't creating a profitable new energy resource for the U.S.; it's about collecting the tax subsidy. Progress Energy Inc. of Raleigh, N.C., which owns electric utilities that serve portions of the Carolinas and Florida, reported in a filing with the Securities and Exchange Commission that in 2002-04 its synfuel-production losses added up to $400 million. No problem: the company claimed $852 million in tax credits, magically transforming a money-losing operation into a money-making business with $452 million in profits—courtesy of the American taxpayer. And that's not all. Like other synfuel producers, Progress Energy can't immediately use all the tax credits it mines because of tax-law limitations. As of Dec. 31, 2004, it was sitting on $745 million in deferred credits that it can write off against future earnings for years to come. And Progress Energy is not alone. Plants run by DTE Energy Co. of Detroit generated $1.2 billion in tax credits during the same years.

...more...

hmmmm.....

I wonder if all those "mine accidents" might be involved in the rush for your dollars? :eyes:

[Onlooker]

1. It's class warefare!

The rich and well-connected are waging class warefare on the American taxpayer!

[RUMMYisFROSTED]

4. It has always been war.

It's just that once in a while we get a few punches in.

[SpiralHawk]

2. The vast and half-vast Republican culture of corruption

enriching the cabal of Republican cronies at the expense of the USA

[UpInArms]

5. also from the linked article: Man on Dog Santorum inserted the language

When asked about the provision's origins, Senate Finance Committee aides at first said they did not know, only that it did not "originate" with Grassley. One aide noted that the Senator "ultimately is responsible for everything in , but routinely with such bills, other committee members propose certain ideas, and he accepts them or rejects them as he sees fit." Asked again by TIME to identify the author, the Senate Finance aide later wrote in an e-mail, "the provision originated as an amendment from Sen. Santorum . Sen. Smith had a similar amendment co-sponsored by several other Senators, Republicans and Democrats. Chairman Grassley accepted the Santorum amendment ... It's routine for him to accept non-controversial provisions that way rather than have the committee vote on each amendment ... So now the Santorum amendment is in the bill." When contacted by TIME, Santorum's staff had no comment.

and

Another Senate supporter of the credit is Orrin Hatch of Utah, the ranking Republican on the Finance Committee. An aide said Hatch believes the new provision in the Senate bill "helps make the current credit work better." Utah-based Headwaters Inc., one of the synfuel industry's most active companies, licenses its technology as well as sells materials to synfuel producers. "If the tax credits under Section 29 of the Internal Revenue Code are repealed or adversely modified," the company said in its latest annual report, "Headwaters Energy Services' profitability will be severely affected."

[TroglodyteScholar]

3. But aren't there any young women missing?

:eyes:

[ozymandius]

6. Just when we needed a diversion from a grand fleecing...

http://www.king5.com/localnews/stories/NW_022406WABmissingwomanKC.5e62acd9.html

and pregnant to boot...

[UpInArms]

7. I feel so much better now that the news can focus on something

that really affects us all! :sarcasm:

[wellst0nev0ter]

8. Geez, Am I In The Wrong Line of Work

just put a stick up my ass and call me a sucker :eyes:

[Rose Siding]

9. Is the concoction really "dubious"?

I know nothing about synfuel -never heard of it- and it sure looks like we're getting fleeced, but whole heartedly trusting Time on this is chaffing a little.

[pnorman]

10. The authors of that article, Bartlett and Steele,

are a team of crack investigative reporters. All their books and magazine articles are well worth reading. Their books can be ordered quite cheaply as "used", at Amazon.com.

They're also well worth searching out on the web. Here's a good place to start: http://www.google.com/search?q=%22DONALD+L.+BARLETT+AND+JAMES+B.+STEELE%22&hl=en&lr=lang_en&start=20&sa=N

pnorman

[maleficentia]

11. Makes sense

looking at this little blurb about Progress Energy on reuters...

http://tinyurl.com/kzl32

NEW YORK, Feb 13 (Reuters) - Progress Energy (PGN.N: Quote, Profile, Research) said on Monday it has been informed by Internal Revenue Service field agents that its four Earthco synthetic fuel facilities met a key condition to qualify for certain tax credits.

IRS field auditors also said that, once they receive written confirmation, they will close their audit without any disallowance of the tax credits. Through the end of last year, the company has generated $1.25 billion of tax credits from the Earthco facilities, the company said in a news release.

On Edit: added quote

[WhiteTara]

12. the fix for their little tax problem

Us. Thanks for the post maleficentia and welcome to DU :hi:

edited for laspe of mind

[wordpix2]

13. Santorum, Hatch, Grassley: unholy trinity of greed close IRS audit

snip:
IRS field auditors also said that, once they receive written confirmation, they will close their audit without any disallowance of the tax credits. Through the end of last year, the company has generated $1.25 billion of tax credits from the Earthco facilities, the company said in a news release.

[Coexist]

14. k & r

[Mythsaje]

15. Also known as

"Business as usual."

[mdelaguna2000]

16. Holy.Crap.

All those highly educated analysts in Washington and no one screaming from the rooftops over this!!! Good to see it's in time.com.

[WhiteTara]

17. the part that makes me so angry is that

the whole thing is a boondoggle. The fact that "coal gassification" is nothing more than spreading gas over some coal rather than extracting gas from coal (an alchemical feat of making gold from lead).

These monsters keep coming back up to bite us with ever larger jaws.

[markam]

18. This could be a good campaign ad against the snake santorum

I can see it. Picture of coal being sprayed. A voice. This company sprays coal with diesel fuel. They then sell it to a power plant, at the exact same price as regular coal. Why do they waste money doing that? In order to get 9 billion in your tax dollars. Who snuck in the regulation which gives this money to these companies? Rick Santorum.


GOD I HATE THAT MAN.