Category Archives: Federal Regulation (U.S.)

Benicia Author Stephen Golub – Norway??

The good, the bad and the ugly of GM’s Super Bowl ad.

By Stephen Golub, A Promised Land, February 8, 2021

Benicia Author Stephen Golub, A Promised Land

If you watched the Super Bowl, or even if you didn’t, you might well have seen the General Motors ad that features Will Ferrell pitching GM’s electric vehicles. It opens with Ferrell explaining that “Norway sells way more electric cars per capita than the U.S.” He then declares, “Well, I won’t stand for it,” before punching a globe and claiming that, with GM’s new electric battery, “we’re going to crush those lugers. CRUSH THEM! Let’s go, America.”

Ferrell, aka America’s loveable oaf, goes on to recruit Saturday Night Live’s Kenan Thompson and actress/comedian/celebrity Awkwafina to meet him in Norway, with him driving an electric Cadillac and them an electric Hummer to somehow get there. He actually ends up in Sweden and his two pals in Finland. But that’s beside the point.

Because the point’s been made: America will lead the world in EV use.

The Good

The ad doubles down on GM’s recent commitment to stop manufacturing gasoline and diesel vehicles by 2035. As this Atlantic article explains, that’s quite the about-face for the car company, given how it advocated for two regressive Trump administration positions: a rollback of anti-pollution rules and an attempt to block California’s regulation of vehicle emissions. Indeed, GM has been quite the laggard in this regard, as Ford and other automobile manufacturers opposed the administration on both issues.

Given how two-faced GM has been, we can’t be certain it will deliver on its promise until it’s further down the line. Still, the change itself couples with the company’s very public declaration of the move – you can’t get more public than a Super Bowl commercial – to reflect a decisive shift in the right direction for GM and the automotive industry more generally.

And it makes so much sense, even above and beyond environmental repercussions. According to the Atlantic piece:

In the future, Americans’ mass adoption of electric vehicles will seem inevitable. After all, EVs cost less to run than gas-powered cars (because electricity is cheaper than gas); they require cheaper maintenance; they break less; they are quieter. For many types of drivers—daily commuters, for instance, or errands-around-towners—they are already preferable to gas-powered cars.

The Bad

GM’s good news comes with a message that should curb our enthusiasm: Note that the vehicles it uses in the Super Bowl commercial are a Caddy and a Hummer. As environmental/energy expert Philip Warburg notes, “GM’s soon-to-be released electric vehicle flagship, the three-ton, 1,000-horsepower all-electric Hummer, stands as a warning that American auto manufacturers will not be abandoning their energy-wasteful giants, even as they move from internal combustion engines to electric power.”

Warburg goes on to caution that, even as the Biden Administration thankfully steers the United States toward an EV future, it must still focus on exhaust emissions from fossil fuel vehicles and on restraining vehicle size:

First, while the prospect of an all-electric vehicle fleet is alluring, we are decades away from achieving that goal. We therefore can’t afford to shrug our shoulders while most of our cars and trucks continue to rely on gasoline and diesel fuel.

Second, an electrified U.S. fleet dominated by oversized SUVs and pickups will consume substantially more energy than a leaner line of electric vehicles, making it much harder for clean electricity sources to edge out the gas and coal plants that still supply most of our electricity.

However affable a face Ferrell puts on GM’s shift, then, the government and public still need to force and pressure car companies to head in the right direction.

The Ugly

Though this ad will never win any awards for subtlety, it nevertheless plays up the unwittingly Ugly American in a creative and positive way. Ferrell’s taking umbrage at the idea that Norway (!!!) is beating America in EV usage is really a knock at the notion of any country besting us in this regard.

What’s significant here is that GM is making EV progress a matter of pride and patriotism. The commercial plays a bit on our national ignorance by bringing together the mindless “We’re Number One!” notion with Ferrell’s globe-piercing display and his little group arriving not in Norway but neighboring nations.

But hey, if a good-natured but cluelessly competitive American stereotype serves a good cause by highlighting how we must catch up with other countries, I’m all for it. At least in this instance, the Ugly American is a beautiful thing to behold.

[Hat tip: MS]
Stephen Golub, Benicia – A Promised Land: Politics. Policy. America as a Developing Country.

Benicia resident Stephen Golub offers excellent perspective on his blog, A Promised Land: Politics. Policy. America as a Developing Country.

To access his other posts or subscribe, please go to his blog site, A Promised Land.

Forget Trump: Biden is undoing harmful rules that have been in place since Reagan

US President Joe Biden signs executive orders for economic relief to Covid-hit families and businesses in the State Dining Room of the White House in Washington, DC, on January 22, 2021. (Photo by Nicholas Kamm / AFP) (Photo by NICHOLAS KAMM/AFP via Getty Images)
President Biden working for the people, not the powerful. (Photo by Nicholas Kamm / AFP) (Photo by NICHOLAS KAMM/AFP via Getty Images)
Daily Kos, by Ian Reifowitz, January 30, 2021

“It has the potential to be the most significant action Biden took on day one.” That’s what Senior Policy Analyst James Goodwin of the Center for Progressive Reform said about the executive order called Modernizing Regulatory Review (MRR)—although he recognized such a statement might sound “absurd” given everything else the new president did on that day. Goodwin was talking about an executive order (EO) that got little attention from mainstream journalists other than the HuffPost reporter who interviewed him. I initially heard about it thanks to Tim Corrimal’s show, but the Brookings Institute’s in-depth analysis of the MRR also generally tracks with the optimistic assessment from Goodwin. Cass Sunstein, who ran the Office of Information and Regulatory Affairs (OIRA) during President Obama’s first term, also strongly praised the change in a post at Bloomberg.

The memo directs the OIRA, which is housed in the Office of Management and Budget (OMB), to take a new approach when doing its job—namely reviewing regulations proposed by the executive branch. I know that the previous sentence may have left some of you nodding off into a dream about drowning in alphabet soup. (There are worse ways to go.) But trust me, if you breathe air, drink water, or buy, well, anything, there’s a pretty decent chance that what Biden just did will help you and yours stay safer and healthier—or maybe even just stay alive.


The key section of the document calls for the appropriate offices to “provide concrete suggestions on how the regulatory review process can promote public health and safety, economic growth, social welfare, racial justice, environmental stewardship, human dignity, equity, and the interests of future generations.”

In addition to those important priorities, this Biden-Harris EO mandates that the review of regulations “promotes policies that reflect new developments in scientific and economic understanding, fully accounts for regulatory benefits that are difficult or impossible to quantify, and does not have harmful anti-regulatory or deregulatory effects.”

Finally, the memo requires that any such review “ensure[s] that regulatory initiatives appropriately benefit and do not inappropriately burden disadvantaged, vulnerable, or marginalized communities.”

One might think all this would be obvious to anyone with a sense of fairness, an interest in actually getting things right based on the best available information, and a concern for justice. One who harbors such illusions clearly hasn’t dealt with Republicans.

Biden’s MRR differs from most of the other executive actions he has taken thus far in that it doesn’t target rules created by his immediate predecessor. Instead, the 46th president is going after a structure created by the godfather of modern conservatism in all its forms (including virulent race-baiting, although that’s not the topic of this post): Ronald Reagan.

With EO 12291 on Feb. 17, 1981, Reagan created the OIRA. Its goal was simple: Find ways to block regulations. The guts of the EO are contained in this section: “(R)egulatory action shall not be undertaken unless the potential benefits to society from the regulation outweigh the potential costs to society.” Sounds reasonable … until it’s time to define benefits and costs to society. Those definitions have rested solely on the basis of dollars and cents. If saving lives costs too much money, well, to paraphrase Col. Jessup from A Few Good Men, “people die.”

At the time, progressives knew what Reagan’s order would mean. Richard Ayres, a leading environmental activist who co-founded the National Resources Defense Council, called this approach to assessing the value of regulations “basically fraudulent.” Going further, he noted: “They are trying to put into numbers something that doesn’t fit into numbers, like the value of clean air to our grandchildren. Cost benefit analysis discounts the future. It allows costs to flow to small groups and benefits to large groups and vice versa. It is concerned with efficiency but not with equity. It is deceivingly precise and ignores ethical and moral choices.”

How’s that for a slogan that sums up an entire movement: “Conservatism: We’ve been ignoring ethical and moral choices for more than 40 years!”

California Rep. Henry Waxman, a long-time progressive champion, added: “It is very dangerous to think we can quantify the way we make policy judgments. We don’t know how to measure the true cost of health or disease.” Waxman was very clear about why this EO was one of the first actions taken during the Reagan presidency: It would enable Republicans to “use cost-benefit analysis to reach decisions that will favor business and industry in this country rather than the public.” Waxman couldn’t have been more right, either about this specific action Reagan took or about Republican priorities across the board.

President Bill Clinton issued a change in 1993 that reduced OIRA’s scope, but unfortunately left the basic framework relatively intact. Other tweaks have been made, including in 2011 under the Obama-Biden administration. But the order issued by the new Biden-Harris administration will, hopefully, usher in a new era for OIRA, one that differs not just by degree, but by kind.

By broadening the definition of costs and benefits beyond what can be calculated on a balance sheet, Biden’s MMR makes enactment possible for far-reaching protections likely to be blocked under the old system. Stuart Shapiro, a public policy professor at Rutgers University who used to work at OMB, explained that the previous approach to regulatory review stifled necessary measures: “Because the benefits are harder to measure, cost-benefit analysis always puts regulation at a disadvantage.” It’s more concrete to say that a specific environmental rule will cost businesses X dollars. However, what is the exact benefit in dollars to a life saved—or a life improved, for that matter? Those benefits are very real to actual people but were not given the proper weight because of the way the costs and benefits had been defined—until Biden came along, that is.

Don’t just take the word of progressives on how much of an impact this new policy will have; listen to how much conservatives despise it. The so-called Competitive Enterprise Institute is a libertarian think tank that, for all intents and purposes, never met a regulation it didn’t hate—especially on the environment. They published a post by Clyde Wayne Crews, a senior fellow and vice president for policy, which squealed that Biden’s MMR would end up “gutting the restraint of the past four years” and “effectively do away with cost-benefit analysis altogether.” Based on how that analysis operated, I’d say good riddance.

As for the last four years, the core of the twice-impeached president’s regulatory review policy was typical of the thoughtlessness of his administration in general. Rather than establish some kind of objective standards to measure the effectiveness of regulations—standards that would certainly favor corporate fat cats—the disgraced despot just said, “If there’s a new regulation, they have to knock out two.” That’s a direct quote—I’m not kidding. In a nutshell, that really was his new rule.

More broadly, The Man Who Tried To Overturn An Election He Lost seriously weakened environmental protections and totally hamstrung our country’s efforts to combat climate change. Hana V. Vizcarra, who researches environmental policy at Harvard, characterized what Trump did over four years as a “very aggressive attempt to rewrite our laws and reinterpret the meaning of environmental protections.” Trump’s anti-regulation regime went beyond the environment, including attacks on labor protections, health protections, education-related protections, and more.

The one wide-ranging piece of legislation enacted by the Republicans under Trump was the Rich Man’s Tax Cut, and Biden certainly needs to undo that giveaway to millionaires and billionaires as quickly as possible. But the other major policy “accomplishments” that need to be undone are in the area of regulation, where Trump had more room to operate by executive order and other executive branch actions. Now President Biden has that same authority, and his new MMR makes clear he knows how to use it.

We’ll likely be seeing one example of the impact of Biden’s executive order when he issues regulations—which we expect to see very soon—on so-called “forever chemicals.” The real name for them is per- and polyfluoroalkyl substances (PFAS), but their nickname derives from the fact that they “never break down in the environment,” as the Environmental Working Group explained. That’s not all:

Very small doses of PFAS have been linked to cancer, reproductive and immune system harm, and other diseases.

For decades, chemical companies covered up evidence of PFAS’ health hazards. Today nearly all Americans, including newborn babies, have PFAS in their blood, and up to 110 million people may be drinking PFAS-tainted water. What began as a “miracle of modern chemistry” is now a national crisis.

During his 2020 campaign, Biden promised to take action on PFAS as part of a wide-ranging plan to “secure environmental justice and equitable economic opportunity.” This is the first step among what will be many, but much of his agenda would likely have been neutered or even blocked under the old regulatory review rules. His new MMR was thus a vital first step in clearing the path for the specific changes he will carry out to protect all Americans’ health, safety, and much more.

It’s very important to remember that what Trump did was no different than what other Republicans have done going back four decades. Conservatives, over and over, wrongly decry as “red tape” the very rules that prevent a relatively small number of immoral, greedy sharks from causing real injury in the blind pursuit of profit—not to mention making it that much harder for the honest business owners who act morally to successfully compete.

Since long before the Orange Menace moved into the White House, his party has been in thrall to corporate interests, and hostile to the interests of consumers—also known as the American people. Even if Republicans purge Trumpism and the Trumpists from their party—something they absolutely must do for the sake of our democracy—the conflict between the parties on regulatory issues will not go away.

When it comes to regulations, one party favors the powerful and the wealthy, and the other works for all of us. It really is as simple as that.


Ian Reifowitz is the author of  The Tribalization of Politics: How Rush Limbaugh’s Race-Baiting Rhetoric on the Obama Presidency Paved the Way for Trump (Foreword by Markos Moulitsas)

‘Stealth Bailout’ Shovels Millions of Dollars to Oil Companies – Valero gets $110 million in pandemic giveaway

Photographer: Vincent Mundy / Bloomberg

Bloomberg News, By Jennifer A Dlouhy, May 15, 2020

  •  Stimulus tax change helps translate losses into instant cash
  •  Oil companies are uniquely poised to benefit, analysts say

As it headed toward bankruptcy, Diamond Offshore Drilling Inc. took advantage of a little-noticed provision in the stimulus bill Congress passed in March to get a $9.7 million tax refund. Then, it asked a bankruptcy judge to authorize the same amount as bonuses to nine executives.

The rig operator is one of dozens of oil companies and contractors now claiming hundreds of millions of dollars in tax rebates. They are employing a provision of the $2.2 trillion stimulus law, called the CARES act, that gives them more latitude to deduct recent losses.

“This is a stealth bailout for the oil and gas industry,” said Jesse Coleman, a senior researcher with Documented, a watchdog group tracking the tax claims. It’s geared to companies “that have been losing money over the last few years — and now they get that money back as a check from the taxpayers. That’s exactly what the oil industry has been doing.”

relates to ‘Stealth Bailout’ Shovels Millions of Dollars to Oil Companies
Electronic drilling with cyber chairs Source: Diamond Offshore Drilling Inc.

The change wasn’t aimed only at the oil industry. However, its structure uniquely benefits energy companies that were raking in record profits in 2018 as crude prices reached $76.41 per barrel, only to see their fortunes flip a year later.

More than $1.9 billion in CARES Act tax benefits are being claimed by at least 37 oil companies, service firms and contractors, according to a Bloomberg News review of recent filings with the Securities and Exchange Commission. Besides Diamond Offshore, which declined to comment, recipients include oil producer Occidental Petroleum Corp. and refiner Marathon Petroleum Corp.

Read More: Occidental Seeking Federal Lifeline For U.S. Oil Industry

Other oil companies say they didn’t lobby Congress for the change, which is widely available across all industries. “We did not request any benefit, but we are obligated to follow the tax laws as passed by Congress, which apply to all corporate manufacturers nationwide,” said Jamal Kheiry, a spokesman for Marathon, which got a $411 million benefit.

Congress embedded the tax change governing losses in the stimulus measure early on, as lawmakers moved rapidly in March to steer trillions of dollars in aid to coronavirus-ravaged workers and companies. Alongside expanded unemployment payments and payroll loan programs, lawmakers saw an opportunity to harness the tax code to help get cash flowing to companies struggling to pay rent, workers and insurance.

It “was sold as help for the little guy — help for small business,” said Steve Rosenthal, a senior fellow with the Urban-Brookings Tax Policy Center. “In the name of ‘small business,’ we’re shoveling out billions of dollars to big corporations and rich guys.”

The provision loosened rules governing how businesses deduct net operating losses — incurred when deductible expenses exceed gross income. For years, companies were able to apply those net operating loss deductions to previous tax returns as well as going forward — but Congress ruled out retroactive relief as part of the 2017 tax cut law.

Tax Law Changes May Limit Benefits of New Loss Carryback Perk

That new forward-focused approach works well when the economy is expanding, but the promise of using today’s losses as tomorrow’s deductions isn’t much help to coronavirus-battered companies with no guarantee they will survive long enough to claim them. So in the stimulus package, Congress gave businesses the chance to carry back all their losses — and claim immediate tax refunds — for five years from 2018, 2019 and 2020.

“The thought was temporarily we should bring them back so that firms that are seeing significant losses in the next year or over the past year or two can carry those back and get some short-term liquidity,” said Garrett Watson, a senior policy analyst at the Tax Foundation, a non-profit that supports pro-growth tax policies.

Traditionally, the ability to deduct net operating losses is meant to ensure companies get fair tax treatment even amid volatility, Watson said — a plus for the notoriously boom-and-bust oil industry. “You are going to see the biggest benefits for firms like oil and gas that are seeing volatile profits — and now, of course, extreme losses,” he said.

The combination of big losses now and the congressional tax changes mean it may be years before some oil companies have to pay corporate income taxes at all.

“We’re going to have some large losses this year,” ConocoPhillips Executive Vice President Don Wallette said in an April 30 earnings call. The company is in “a zero-tax-paying position in the U.S. and expect to remain there for quite some time,” Wallette said.

There’s no limit on how the new refunds can be used — and even bankrupt firms can get them.

Oil for Less Than Nothing? Here’s How That Happened: QuickTake

Consider Diamond Offshore. Once one of the world’s largest drilling rig contractors, it filed for Chapter 11 bankruptcy protection on April 26 after crude prices plunged along with demand for its high-tech drillships.

In a first quarter filing, Diamond, which is majority owned by Loews Corp., said it had recognized a tax benefit of $9.7 million as a result of the carryback change. In an emergency motion filed with a federal bankruptcy court May 1, the company asked for the freedom to dole out $16.7 million in cash incentives to 85 of its 2,300 full-time employees, including as much as $9.7 million for nine senior executives.

The company said at the time that deteriorating market conditions and the collapse of Diamond’s stock had made its existing equity-based bonus program “largely worthless.” The tax filing did not specify how the $9.7 million would be used.

Dozens of other oil businesses have reported reaping the benefits, including $55 million for Denver-based Antero Midstream Corp., $41.2 million for supplier Oil States International Inc. and $96 million for Oklahoma-based producer Devon Energy Corp.

Occidental Petroleum, which enlisted its employees to ask Congress to “provide liquidity to the energy industry,” said it now anticipates a cash refund of about $195 million as a result of the carryback provision and a separate change in the stimulus bill that allows the immediate refund of unused alternative minimum tax credits. An Occidental spokesperson declined to comment.

Millions in Refunds
National Oilwell Varco Inc., a manufacturer of oil and gas equipment, expects a $123 million refund by carrying back its 2019 losses and applying them to its 2014 tax filing.

San Antonio-based refiner Valero Energy Corp. recognized an extra $110 million by carrying back losses to 2015 — when the corporate tax rate was 35% instead of the current 21%.

Valero spokeswoman Lillian Riojas said that is tied to tax losses generated in the first quarter, since the company did not generate a net operating loss for federal income tax purposes in 2018 or 2019. And she said the actual refund will be dependent “not only on the company’s performance for the remainder of the year, but also on the impact” of other tax provisions.

The benefits are “turbo-charged,” said Rosenthal, with the Urban-Brookings Tax Policy Center. That’s because businesses can carry back losses to offset income at a higher corporate tax rate of 35%, before the 2017 tax cut law lowered it 14 points. “Getting those losses at 35% is very, very favorable — especially in 2020 when the losses are going to be devastatingly large.”

The filings themselves reveal only part of the picture. Private companies are able to generate tax refunds too — without disclosing it to the SEC. And while some public companies said they benefited from the tax break, they didn’t reveal by how much.

For instance, refiner Phillips 66 boasted an effective income tax rate of just 2% for the first quarter — well below the federal statutory income tax rate of 21% — partly because of the carryback. But the company did not specify the amount of its expected refund.

House Democrats Unveil $3 Trillion Aid Bill With Cash for States

Dennis Nuss, a spokesman for Phillips 66, declined to comment when reached by phone Thursday. Representatives for Oil States, National Oilwell Varco, Antero and Devon didn’t respond to messages seeking comment.

The importance of the provision hasn’t been lost on President Donald Trump’s administration. Energy Secretary Dan Brouillette recommended oil companies consider taking advantage of the expanded deduction in an April 21 interview with Bloomberg TV, calling it one of several “important liquidity tools that are going to help the industry.”

Congressional tax analysts initially estimated that the expanded loss carryback provision would cost $25 billion over 10 years — just when used by corporations. Now, some are questioning whether the final pricetag could be much higher, and Democrats are seeking to limit the value of the tax break after raising concerns it overwhelmingly helps corporations and the wealthy.

In a new stimulus bill advanced Tuesday, House Democrats proposed scaling back the provision so companies could only apply losses back to 2018. Their plan also would prevent companies with “excessive” executive compensation or stock buybacks from claiming the tax break — a change that would be retroactive back to March.

Rosenthal stressed that it was logical for Congress to help businesses that were profitable before the pandemic. “But the CARES Act goes too far, tilting its benefits overwhelmingly to the wealthiest Americans,” he said in an essay. “I think Congress did not know the extent of what it was doing.”

— With assistance by Ari Natter, Laura Davison, David Wethe, Kevin Crowley, Leslie Pappas, and Rachel Adams-Heard

Benicia Crude By Rail remembered in today’s news

[Today’s news is welcome.  Rep. Garamendi doesn’t represent Benicia, but he does represent uprail cities that would have been affected by Valero’s dangerous and dirty proposal to bring oil trains across California.  Garamendi’s bill, HR 5553, has 4 co-sponsors, but does not include Benicia’s representative Mike Thompson.  Let’s hope Mike will get behind this effort!  – R.S.]

John Garamendi introduces crude-by-rail safety bill

Vallejo Times-Herald, by Nick Sestanovich, January 9, 2020
U.S. Rep. John Garamendi, CA 3rd District

Rep. John Garamendi, D-Solano, introduced legislation Wednesday to ensure safer standards for the transport of crude oil and other hazardous materials by train.

House Resolution 5553, also known as the “Crude By Rail Volatility Standards Act,” aims to establish a safety standard for the maximum volatility for crude oils and similar materials transported by rail. It also requires that all crude by rail in America adhere to the New York Mercantile Exchange’s maximum Reid vapor pressure for crude-oil futures contracts of 9.5 pounds per square inch, Garamendi’s office wrote in a news release.

The current industry standard would remain in place until the Pipeline and Hazardous Materials Safety Administration (PHMSA) completes the rule setting a maximum volatility standard that was first announced in 2017 after the attorneys general of six states, including California, petitioned the U.S. Department of Transportation and PHMSA to finalize the regulation nationwide.

“Every day we delay the implementation of a stronger safety standard for the transport of Bakken crude oil-by-rail, lives are at risk,” Garamendi said in a statement. “My bill simply requires oil companies to decrease the volatility to market levels, rather than carrying unstable products through communities. I am committed to enacting this legislation into law this year as part of the surface transportation reauthorization.”

Garamendi, who is a senior member of the House Committee on Transportation and Infrastructure, has been trying to get legislation passed since 2015 to prohibit crude oil from being transported by rail unless it adheres to the New York Mercantile Exchange’s maximum Reid vapor pressure. Garamendi’s office wrote that the actions were influenced by numerous crude-by-rail derailments in previous years, including an accident in Lac-Megantic, Quebec in 2013 which killed 47 people and led to changes in operations for Canadian railways.

The topic of crude by rail became a hot-button issue in Solano County in 2013 when the Valero Benicia Refinery announced plans to extend rail lines to have crude-oil delivered to its plant by train rather than by boat. The project — which would have passed through Dixon, Suisun City and Fairfield — was met with opposition and was subsequently voted down by the Benicia Planning Commission and then the City Council.

Garamendi’s co-sponsors on the bill are Reps. Barbara Lee, D-Oakland; Bill Foster, D-Ill.; Nita Lowey, D-N.Y.; and Jamie Raskin, D-Md.