This vote was on an amendment by David Vitter, R-La., that would have prohibited any money raised increasing taxes on oil companies and deposited into the Oil Spill Liability Trust Fund from being used for other purposes, or to offset the deficit in certain budgetary calculations.  The amendment was offered to a bill that would extend several expired tax provisions, unemployment insurance benefits, Medicaid assistance to states, Medicaid doctor payment increases and other items.

Vitter said his amendment is intended to ensure that money set aside for cleaning up the oil spill in the Gulf of Mexico doesn’t get diverted for other unrelated purposes.  He said often money that gets put into the Oil Spill Liability Trust Fund gets diverted for deficit reduction or to pay for other priorities.

“As soon as all of that new revenue goes into the trust fund, $15 billion over 10 years, it is stolen. It is spent on unrelated spending. It isn’t a true trust fund. It is spent on other government deficit spending. It is used essentially to hide deficit spending elsewhere,” Vitter said.  “My amendment is simple. It says two things: Anything that goes into the Oil Spill Liability Trust Fund can only be used to clean up oil spills. Pretty basic, pretty simple. Secondly, it cannot be double counted, used as an offset for other unrelated government deficit spending. That is pretty simple. I think it is a minimum requirement we should ask in the midst of this ongoing crisis in the gulf.”

Max Baucus, D-Mont., said Vitter’s amendment would essentially prevent the underlying bill from increasing taxes on oil companies that are deposited into the Oil Spill Liability Trust Fund.

“In this bill, we propose to raise that tax to 41 cents a barrel. That is a very modest increase, where today oil in the market is roughly $72 a barrel.  You hear this argument—it is not even an argument. It is like Alice in Wonderland stuff. I do not know where this stuff comes from. It is Alice in Wonderland stuff, that somehow we should not do this because it is double counting or something like that. The money that is raised from the oil spill liability tax goes to the Oil Spill Liability Trust Find. And our Federal Government has a cash flow system of accounting, so by definition we will start to lower the budget deficit. That is not double counting. That is just the way it works,” Baucus said.  “It sounds as though the Senator from Louisiana either does not want to lower the budget deficit or he does not want to increase the tax on oil companies from 8 cents a barrel, which is so small. The fact is, what he is doing is saying this: He is saying that the Budget Office, for budget purposes, cannot count the oil spill liability tax to reduce the budget deficit. So, in effect, what he is saying is, there is no oil spill liability tax. What he is saying is the taxpayers should pay for the cleanup, not the oil companies.

By a vote of 48-49, the amendment was rejected.  Every Republican present voted for the amendment.  Of Democrats present, eight voted for the amendment and 48 voted against it (including a majority of the most progressive members).  The end result is that the measure went forward without language that would have sought to ensure any new money raised for the Oil Spill Liability Trust Fund did not get diverted for other purposes or used to reduce the deficit in certain budgetary calculations.