Fwd: MyHeritage.org: BP's New Deal is a Raw Deal

June 18, 2010 | By Amanda J. Reinecker BP's New Deal is a Raw Deal Yesterday, BP announced that it would "voluntarily" place $20 billion into a government-administered fund to compensate victims of the Gulf of Mexico oil disaster and clean up the mess. The oil company also agreed to shell out another $100 million to a foundation that will support oil workers made unemployed by President Barack Obama's indefinite ban on offshore oil drilling. Now, no one is disputing that this oil spill is real disaster wreaking enormous havoc on the environment and the economy. And BP should absolutely have to pick up the tab for all efforts to correct this mess. It's the beauty of the "you break it, you buy it" mentality. But there are right ways – legal and constitutional ways – to go about assigning responsibility, and the Obama Administration isn't following them. Heritage Foundation legal scholar Hans von Spakovsky explains the law pertaining to the Gulf Coast situation: The Oil Pollution Act of 1990 (OPA) sets out exactly what BP and anyone else who caused the spill have to pay for. Under 33 U.S.C. § 2702, BP is responsible for all removal costs; all injuries to real or personal property; damages for loss of subsistence use of natural resources; loss of profits or impairment of earning capacity due to injury, destruction, or loss of natural resources or real or personal property; and damages for the cost of providing increased public services by any state. These categories of damages would cover all of the costs that everyone has been talking about… But the law says nothing about BP compensating the newly unemployed offshore oil workers. Why and how, then, can BP be liable? Legally, they can't. "Obama's moratorium is an unreasonable decision that is supported neither by the states in the Gulf nor experts in the oil and gas industry," von Spakovsky argues. In addition, the President's demand to transfer an immense portion of stockholders' wealth to the compensation fund without any legislation or court decision is extremely worrisome. So why would BP "voluntarily agree" to these costly measures? Perhaps the company was intimidated by Attorney General Eric Holder's threat to open a criminal investigation. Perhaps BP is under the impression this agreement places a cap on their costs. (It doesn't. The White House made clear that the $20 billion was just a down payment and in no way represented a cap on BP's liability.)  Or perhaps this so-called deal between the White House and BP represents little more than what Heritage's Conn Carroll calls of "shakedown of Godfather-like proportions." BP is by no means off the hook with this deal – it has to pay big-time; it is still liable to individual and state claims; and it received no assurances that economic damages would not be higher or that the White House wouldn't come back demanding more. But Carroll explains in a separate piece that BP is not the victim in this scenario. The rule of law is. Wednesday's 'voluntary' deal between BP and the Obama administration was nothing less than a continuation of President Barack Obama's ongoing assault on the rule of law. Capitalism only succeeds if it is a profit and LOSS system. Well-managed firms should have every right to keep their profits, but mismanaged firms must be allowed to suffer losses… Failure is a necessary component of capitalism. But this administration refuses to allow the rule of law to work. From Fannie Mae to Freddie Mac, from GM to Chrysler, from AIG to Citibank, our government continues to subvert the established rule of law. This lawlessness creates uncertainty in the business environment, and it is a huge reason why our economy is not recovering as it should be. Another reason to celebrate husbands and fathers! Did you know that the little gold band worn on a man's left ring finger is more than a sign of commitment and fidelity? It's a weapon against poverty for their children. "Now that's something to celebrate and encourage this Father's Day," writes Heritage's Ken McIntyre. Heritage domestic policy expert Robert Rector explains in a new report that "The principal cause of child poverty in the U.S. is the absence of married fathers in the home." Now, how come we never hear this in the news and media? Rector, the architect of the 1994 welfare reforms, says it's because "mentioning the bond between marriage and lower poverty violates the protocols of political correctness." It is virtually hidden from public view. Currently, more than $300 billion taxpayer dollars are pumped into means-tested government spending on low-income single moms and single dads. In his book, Audacity of Hope, then-Senator Barrack Obama wrote, "policies that strengthen marriage for those who choose it and that discourage unintended births outside of marriage are sensible goals to pursue." Well said, Mr. President. But if our own President understands this, why isn't government doing more to share the facts on the role of healthy marriages in reducing poverty and improving the well-being of children? Why not teach skills for selecting a wife or husband? Why not explain the importance of developing a stable marital relationship before bringing children into the world? Marriage is not an antiquated institution or a red-state superstition. "Research shows that a child raised in a home where Dad is married to Mom is much less likely to live in poverty, get arrested as a juvenile, be suspended or expelled from school, be treated for emotional or behavioral problems, or drop out before completing high school," explains McIntyre. So let's get the facts straight and share them. And we can start by celebrating all the great husbands and fathers and honor their commitment to strengthening families. Happy Father's Day! > Other Heritage Work of Note Join The Heritage Foundation for a special teleconference with the ranking member of the Senate Judiciary Committee, Jeff Sessions (R-AL), and Heritage distinguished fellow and former Attorney General Edwin Meese. The two will preview the upcoming Senate confirmation hearings for President Barack Obama's Supreme Court Nominee, Elena Kagan. Join us on Wednesday at 2:00 p.m. for this timely discussion. Register today!  Correction: The USA Today essay challenge advertised in Tuesday's newsletter is a "letters-to-the-editor" project, rather than a contest with winners and prizes. Certain submissions will be selected for a package of letters, which USA Today will publish around July 4. We encourage all of our members and supporters to participate in this letters to the editor project, but we would like to clarify that it is not a contest. We apologize for any confusion. On Wednesday, the Senate voted 45-52 against the "extenders "bill, which would extend a bailout of state Medicaid programs and increase Medicare's reimbursement of doctors above what current law allows. Right now, these Medicare payments are scheduled to be reduced automatically to control costs, but Congress routinely overrides these cuts. "[Permanently] adjusting the doctor reimbursement rates is necessary to avoid reimbursement cuts and limits to patient access," argues Heritage's Brian Blase. Congress, however, continues to kick the issue down the road six months until the temporary fixes expire. "Obama and congressional proponents of [cap-and-trade] had for months tried to repackage it as a jobs bill (all the green jobs from the new clean-energy economy) and an energy-independence bill (cap-and-trade will stick it to OPEC)," explains Heritage energy policy analyst Ben Lieberman. Unfortunately, they're back at it. Only this time, this scheme is now presented as the answer to the oil spill, and it comes in the form of a slightly watered-down version of cap-and-trade. Lieberman also wrote an article for the New York Post on the potential for $7-a-gallon gas under the Obama energy plan. It drew plenty of attention, including a prominent link from the Drudge Report. > In Other News On Wednesday, Rep. Steve King (R-IA) filed a discharge petition, a maneuver which, if it receives signatures from a majority of representatives, will force an up-or-down vote on Obamacare. The Obama administration plans to sue Arizona for enforcing immigration laws. Speaker Pelosi withdrew the DISCLOSE Act before it could be voted on. The law would have imposed onerous restrictions on free speech in the name of campaign finance reform. U.S. jobless claims rose by 12,000 to 472,000 in the week ending June 12. The consumer price index, a measure of inflation dropped 0.2 percent. The Wall Street Journal reports that many banks may eliminate their free checking accounts in response to Congressional schemes to regulate financial transactions. The new fees on checking accounts would replace revenue sources like overdraft fees charged to less responsible consumers. Russia is sharply criticizing the U.S. and the E.U. for planning additional Iran sanctions in addition to measures recently imposed by U.N. Security Council. Amanda Reinecker is a writer for MyHeritage.org—a website for members and supporters of The Heritage Foundation. Nathaniel Ward, the Editor of MyHeritage.org, and Stephen Congdon, a Heritage intern, contributed to this report.    Donate    |   Heritage on Facebook View as HTML  |   Update Your Profile   |