Higher Energy Prices Dominate Legislative Activity

With higher gas prices undermining small business growth and potentially the economic recovery, various approaches addressing the issue are being pursued in the U.S. House and Senate.

Senate Majority Leader Harry Reid (D-Nev.) Senate Majority Leader Reid will open floor debate this week on the Democrats’ bill to raise taxes on the largest oil/gas companies. As the Congressional Research Service has reported, hiking energy taxes will only translate into higher prices and less supply. SBE Council adds “fewer jobs” to the list of ills. So, raising energy taxes will increase business costs even more as SBE Council President & CEO Karen Kerrigan noted at a May 9 media briefing at the National Press Club.

“Proposals that hike energy taxes are unthinkable given the fragile state of the economy. Small business owners continue to struggle with weak sales while their business costs tick higher. Raising taxes on energy will exacerbate uncertainty, and the real challenge that many small businesses face in regard to their ability to compete in and survive the tough economy. Higher energy taxes mean higher costs for small businesses, and it’s irrational for Washington to inflict more pain on our nation’s struggling entrepreneurs,” said Kerrigan. SBE Council has urged the Senate to reject these tax hike proposals and focus on solutions that increase supply and will help make energy costs more affordable.

“Washington needs to pursue and enact policies that promote business confidence, investment, certainty and growth for small businesses – indeed for all sectors and industries,” said Kerrigan. “Policies that encourage energy exploration and development, while promoting investment, will lead to a more reliable supply and lower energy prices. Raising energy taxes is the wrong approach.”

Meanwhile, over in the House, SBE Council is supporting two pieces of legislation that will be voted on this week. SBE Council sent letters to all members of the House communicating support for H.R. 1229, “Putting the Gulf Back to Work Act” and H.R. 1231, “Reversing President Obama’s Offshore Moratorium Act.” Both of these bills will help move energy policy in a positive direction by encouraging domestic exploration and development, which will bring more certainty to energy supply and foster affordability. For the thousands of small business owners and millions of employees whose livelihoods are tied to a vibrant energy sector, these two bills are also critically important.

The latest SBE Council Energy & Entrepreneurs analysis reviews why some politicians are pursuing vindictive policies against the energy sector in light of recent profit reports. “As sure as the sun rises in the east and sets in the west, no doubt existed as to what the reaction would be in certain political circles to recent reports on oil industry profits,” SBE Council chief economist Ray Keating writes. He sorts out the politics, the policies and the economics in the piece “Bonus Resource: Why Gas Prices are Rising – Let’s Investigate,” by SBE Council’s Keating.

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