On Wednesday, Congressional Progressive Caucus leaders sent a letter urging top Democrats to repeal fossil fuel subsidies that are currently included in Democrats’ Build Back Better Plan, saying that the tax breaks only serve to pad the pockets of fossil fuel industry elites.
The letter was spearheaded by Congressional Progressive Caucus Chair Rep. Pramila Jayapal (D-Washington) and Deputy Whip Rep. Ro Khanna (D-California), who say that House leaders should axe tax breaks like one that allows oil and gas companies to write off drilling costs, and another that allows them to use “Last In, First Out” accounting methods to reduce the taxable value of their assets.
Climate advocates and energy experts say such subsidies play a large role in keeping the fossil fuel industry afloat. According to a new report by Friends of the Earth, Oxfam America and BailoutWatch, the Democrats’ tax plan leaves $35 billion in subsidies for the fossil fuel industry. “We were dismayed to see that the current version of the Build Back Better Act in the House is missing most of the domestic fossil fuel subsidies repeal passed by the Senate Finance Committee earlier this year,” the progressives wrote in their letter. “There is no reason that the fossil fuel industry deserves special privileges over other businesses.”
The Congressional Progressive Caucus leadership went on to point out that fossil fuel “giveaways” don’t go toward helping energy production or stability, but toward padding the fossil fuel companies’ profits. Indeed, they cite a study from earlier this year that found that in 2019, 96 percent of the value over minimum rate of return created by 16 fossil fuel subsidies went directly to excess profits.
At the end of August, just as Congress was beginning to draft the Build Back Better Act, over 50 House representatives sent a letter urging Democratic leaders to include the repeal of fossil fuel subsidies in the bill.
“We should not fall for the industry myth that these subsidies are necessary for good job creation,” the lawmakers wrote. “Despite the fact that big fossil fuel companies claimed $8.2 billion in 2020 from the CARES Act pandemic relief bill, the industry still laid off 16 percent of its workforce.”
On the campaign trail, President Joe Biden pledged to end fossil fuel subsidies and pressure other world powers to do the same. “I don’t think the federal government should give handouts to Big Oil,” he said earlier this year when signing an executive order directing agencies to repeal the subsidies.
In the president’s original tax plan, which the Build Back Better Act is based on, Biden proposed eliminating a small raft of subsidies, but climate advocates slammed the plan for being insufficient. He has thus far remained mum about the Democrats’ current tax plan and the subsidies contained in it.
Climate advocates say that fossil fuel subsidies must end in order to fend off the ever worsening climate crisis. Funding the fossil fuel industry only increases the nation’s dependence on fossil fuels, keeping the industry artificially dominant as the industry is generally on the decline otherwise, the report finds.
Many climate advocates say that in fact, it is the fossil fuel industry that should be paying the government and the public for destruction wrought by climate disasters. The continued use of fossil fuels will have far more expensive consequences than any action taken to mitigate the climate crisis now, advocates and progressives say.
Help us Prepare for Trump’s Day One
Trump is busy getting ready for Day One of his presidency – but so is Truthout.
Trump has made it no secret that he is planning a demolition-style attack on both specific communities and democracy as a whole, beginning on his first day in office. With over 25 executive orders and directives queued up for January 20, he’s promised to “launch the largest deportation program in American history,” roll back anti-discrimination protections for transgender students, and implement a “drill, drill, drill” approach to ramp up oil and gas extraction.
Organizations like Truthout are also being threatened by legislation like HR 9495, the “nonprofit killer bill” that would allow the Treasury Secretary to declare any nonprofit a “terrorist-supporting organization” and strip its tax-exempt status without due process. Progressive media like Truthout that has courageously focused on reporting on Israel’s genocide in Gaza are in the bill’s crosshairs.
As journalists, we have a responsibility to look at hard realities and communicate them to you. We hope that you, like us, can use this information to prepare for what’s to come.
And if you feel uncertain about what to do in the face of a second Trump administration, we invite you to be an indispensable part of Truthout’s preparations.
In addition to covering the widespread onslaught of draconian policy, we’re shoring up our resources for what might come next for progressive media: bad-faith lawsuits from far-right ghouls, legislation that seeks to strip us of our ability to receive tax-deductible donations, and further throttling of our reach on social media platforms owned by Trump’s sycophants.
We’re preparing right now for Trump’s Day One: building a brave coalition of movement media; reaching out to the activists, academics, and thinkers we trust to shine a light on the inner workings of authoritarianism; and planning to use journalism as a tool to equip movements to protect the people, lands, and principles most vulnerable to Trump’s destruction.
We urgently need your help to prepare. As you know, our December fundraiser is our most important of the year and will determine the scale of work we’ll be able to do in 2025. We’ve set two goals: to raise $130,000 in one-time donations and to add 1422 new monthly donors by midnight on December 31.
Today, we’re asking all of our readers to start a monthly donation or make a one-time donation – as a commitment to stand with us on day one of Trump’s presidency, and every day after that, as we produce journalism that combats authoritarianism, censorship, injustice, and misinformation. You’re an essential part of our future – please join the movement by making a tax-deductible donation today.
If you have the means to make a substantial gift, please dig deep during this critical time!
With gratitude and resolve,
Maya, Negin, Saima, and Ziggy