An Embarrassment To The Democratic Party

West Virginia has a new Democratic senator -- well, he calls himself a Democrat. Truth be told, he is a "blue dog" conservative who has been bought and paid for by the coal companies (which makes me wonder what nincompoop thought he should serve on the Energy and Natural Resources Committee). He will probably vote with the Republicans as much as he does with Democrats.

Yesterday Senator Joe Manchin (D-West Virginia) made his first speech before the U.S. Senate, and I'm sure Democrats all over the country wish C-SPAN hadn't broadcast the speech. Because in that speech, Manchin showed that he can tell a giant whopper of a lie as well as any Republican in the Senate. Maybe, like the Republicans, he thinks he can say anything and the American people will believe it. While that may work with teabaggers, Manchin needs to learn that the Democratic base expects a speech to be backed up with some facts.

In his initial Senate speech, Manchin decided to carry some water for the coal corporations. That would have been bad enough, but in doing so, he had little regard for the truth. He lamented the "fact" that while all other sources of energy get government subsidies, the poor coal companies don't get a penny. He said, "What I don't understand is the subsidies. The subsidies of energy, whether it be to oil, gas, wind, solar, biofuels, ethanol. The only energy source -- which is the greatest source that we have so far as we're dependent on -- is coal. It doesn't get a penny of subsidies."

Now some of you may be thinking that he just might not know the coal industry is subsidized by both state and federal governments, but that would be even worse. He served as the governor of West Virginia before being elected to the Senate. He'd have to be a complete idiot to not know the coal industry is subsidized. Unfortunately for Manchin, it didn't take Think Progress long to come up with a pretty long list of coal subsidies. Here they are:


Credit for Production of Nonconventional Fuels ($14,097)- IRC Section 45K. This provision provides a tax credit for the production of certain fuels. Qualifying fuels include: oil from shale, tar sands; gas from geopressurized brine, Devonian shale, coal seams, tight formations, biomass, and coal-based synthetic fuels. This credit has historically primarily benefited coal producers.


Characterizing Coal Royalty Payments as Capital Gains ($986) – IRC Section 631(c). Income from the sale of coal under royalty contract may be treated as a capital gain rather than ordinary income for qualifying individuals.



Exclusion of Benefit Payments to Disabled Miners ($438) – 30 U.S.C. 922(c). Disability payments out of the Black Lung Disability Trust Fund are not treated as income to the recipients.


Other-Fuel Excess of Percentage over Cost Depletion ($323)- IRC Section 613. Taxpayers may deduct 10 percent of gross income from coal production.


Credit for Clean Coal Investment ($186)- IRC Sections 48A and 48B. Available for 20 percent of the basis of integrated gasification combined cycle property and 15 percent of the basis for other advanced coal-based generation technologies.


Special Rules for Mining Reclamation Reserves ($159) – IRC Section 468. This deduction is available for early payments into reserve trusts, with eligibility determined by the Surface Mining Control and Reclamation Act and the Solid Waste Management Act. The amounts attributable to mines rather than solid-waste facilities are conservatively assumed to be one-half of the total.


84-month Amortization Period for Coal Pollution Control ($102) – IRC Section 169(d)(5). Extends the amortization period used in calculating the deduction from the generally applicable 60-month period available for other types of pollution control facilities.


Expensing Advanced Mine Safety Equipment ($32) – IRC Section 179E. The costs of qualifying mine safety equipment may be expensed rather than recovered through depreciation.


Black Lung Disability Trust Fund ($1,035)- As industry excise tax payments did not sufficiently cover early benefits payments, the BLDTF was given “indefinite authority to borrow” from the U.S. General Fund, and bailed out for $6.498 billion, 13 percent of which is relevant to the 2002-2008 period.


Financial support for the World Bank and other international financial institutions that finance fossil fuel use and extraction. Since 1994, these institutions have provided $137 billion in direct and indirect financial support for new coal-fired power plants.


U.S. Treasury Department’s backing of tax-exempt bonds and federally subsidized taxable Build America Bonds for use in the electric sector. $81 billion in tax-exempt debt was issued between 2002 and 2006 for electric power, most for coal plants.


U.S. Department of Agriculture’s Rural Utilities Service provision of loans, loan guarantees, and lien accommodations to public power companies that are investing in new or existing coal plants.


Tax credits, loans, and loan guarantees through the U.S. Department of Energy. In 2009, DOE issued $5.9 billion in loan guarantees for advanced coal projects.

Furthermore, cash-strapped state governments give millions of dollars in subsidies to coal, including $115 million from Kentucky, and $26 million from Virginia. In 2008, then-Gov. Manchin himself offered Appalachian Fuel $200 million in subsidies for a liquid coal plant.