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Drilling, oil taxes on docket as 'supercommittee' starts work

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While the law that created it focused on cuts, the biggest political questions swirling around tomorrow's first meeting of the congressional debt-cutting "supercommittee" relate to government revenue -- and the role oil should play in any new money raised.

The 12-member debt panel, evenly divided by party, begins its work with 11 weeks left until its legally binding deadline for voting on a package of up to $1.5 trillion in deficit reduction proposals. Though the supercommittee's purview is as vast as its mission, Republicans and Democrats alike are hoping to put major energy and environmental policy shifts in the mix to avoid the $1.2 trillion in cuts that would result if Congress does not approve its recommendations, a consequence fixed in last month's deal to raise the federal borrowing limit.

Tomorrow's first meeting, billed as organizational by the panel's co-chairs, Rep. Jeb Hensarling (R-Texas) and Sen. Patty Murray (D-Wash.), is likely to be dominated by opening statements that will give members a chance to lay out their overarching priorities for the high-profile process. Yet one senior Republican not on the supercommittee also seized that opportunity yesterday, calling for any new money the panel raises to come from expanded domestic oil and gas production rather than tax increases.

Avowing that the debt panel should consider "both spending cuts and raising new revenue" -- a principle most in his party did not endorse during this spring's fight over the borrowing limit -- House Natural Resources Chairman Doc Hastings (R-Wash.) wrote in a Fox News op-ed that "unlocking our nation's energy resources" would provide a billion-dollar boost to the economy while shrinking the deficit.

"Continuing to omit American energy production from the solution to our financial insolvency only increases the debt burden on future generations by sending more American tax-dollars overseas to unfriendly countries for energy we have the ability to produce at home," Hastings wrote.

Hastings cited an estimate by energy-industry firm Wood Mackenzie that found as much as $64 billion in new revenue could spring from the opening of five areas presently off limits to energy development, including the Alaska National Wildlife Refuge and "portions of the inter-mountain West." Two offshore drilling bills that Hastings steered through the House in May, however, yielded smaller-scale spending decreases and no revenue increases, according to the independent Congressional Budget Office.

As Hastings pushed the panel to consider drilling proceeds, a notion certain to run afoul of liberal lawmakers and environmental groups, Democratic supercommittee members continued to urge that elimination of tax benefits would solve the group's revenue puzzle -- a theme long pushed by conservationists, the Obama administration, and other proponents of rolling back benefits for major oil and gas companies (Greenwire, Aug. 10).

In a Washington Post op-ed published Monday, Rep. James Clyburn (D-S.C.) underscored the tax conundrum facing his party by noting that "the supercommittee does not have the time or resources to sufficiently reform the tax code.

"But we do have time to reduce inequities, close loopholes, and eliminate outdated and unnecessary tax subsidies," added Clyburn, a House Democratic leadership member.

Supercommittee co-chiefs Murray and Hensarling filled out the second-ranked advisory spot on their panel yesterday, tapping veteran Senate Budget Committee analyst Sarah Kuehl as deputy staff director. A Democrat, Kuehl will work alongside longtime GOP tax counsel Mark Prater, a Senate Finance Committee aide named staff director last month.

Joint Select Committee on Deficit Reduction schedule: The meeting is tomorrow at 10:30 a.m. in 2123 Rayburn.

Witnesses: None scheduled.