The GOP-led House Appropriations Committee Tuesday last week voted out a $27.5 spending bill that makes deep cuts in funding for the Interior Department and Environmental Protection Agency (EPA) for fiscal year (FY) 2012.

The measure cleared by 28-18, with the vote breaking down along party lines. The bill included $9.9 billion in funding for Interior in FY 2012, which is $720 million below the level for the current fiscal year and $1.2 billion below President Obama’s request; and $7.1 billion for the EPA — $1.5 billion less than last year and $1.8 billion below the president’s request for the agency (see NGI, July 11). It is expected to reach the House floor at the end of the month or the beginning of August. The Senate’s budgetary knife isn’t likely to be as sharp.

Rep. James Moran (D-VA) offered an amendment to restore the president’s proposal to raise inspection fees on onshore and offshore production, but it was defeated 29-20. The president proposed raising onshore and offshore fees by nearly $100 million.

“This [amendment] is the right thing to do,” Moran said, adding that he was only asking for that part of the president’s request to be included in the bill.

“I have no problem charging [oil and gas companies] what it costs the federal government to do these inspections,” said Rep.Michael Simpson (R-ID), chairman of the House Subcommittee on Interior, Environment and Related Agencies. But he noted that the matter should be left to the authorizing committees of jurisdiction.

Moran called the appropriations bill a “virtual ‘dump truck'” of provisions for corporate interests, such as oil producers, cattle grazers and miners. He said the bill was more of a “wish list” for special interests than a spending measure.

The decision to cut funding for the EPA by 18% in FY 2012 was decried by Democrats on the appropriations panel, but Republicans justified their action by saying they were trying to rein in the “out of control” regulation by the agency. “This legislation by regulation must come to an end,” said one lawmaker. Republicans specifically cited the EPA’s “obstruction” of Outer Continental Shelf (OCS) permitting.

Congress is fed up with this “dubious legislation by regulation,” said committee Chairman Harold Rogers (R-KY).

The spending bill incorporates House legislation (HR 2021), which was passed last month, that would force the EPA to act on exploratory air permits within a six-month time frame and would limit the ability of opponents to use the EPA’s Environmental Appeals Board to invalidate the permits for offshore exploration (see Daily GPI, June 24). Sen. Lisa Murkowski (R-AK) has introduced a companion bill in the Senate.

Simpson said the measure provides additional funding for Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement to hire new inspectors and move forward with offshore oil and gas permitting and leasing.

Simpson said the cut to the EPA budget was justified. “Earlier this year I said that the scariest agency in the federal government is the EPA. I still believe that. The EPA’s unrestrained effort to regulate greenhouse gases, and the pursuit of an overly aggressive regulatory agenda, are signs of an agency that has lost its bearing.”

While Congress moves forward with legislation, the deficit reduction and debt ceiling talks between the Obama administration and congressional leaders are capturing the most attention. With the federal government facing possible default on its debt obligations in less than three weeks, the most divisive issue on Capitol Hill is whether to raise taxes for specific groups, such as oil and gas producers. Republicans are opposed to this while Democrats support it.

The Independent Petroleum Association of America (IPAA) last Monday called on House and Senate leaders to reject any proposals that would impose a tax increase on a specific industry.

“Much has been said about the elements of a compromise to address the forthcoming expiration of the statutory debt ceiling and the challenges of reducing the federal deficit. Among the issues that have been raised are targeted tax increases on specific industries,” wrote IPAA President Barry Russell in his letter to the House and Senate leaders.

“President Obama targeted the oil and natural gas exploration and production industry in many of his recent statements. As the most active advocate for America’s independent producers, the Independent Petroleum Association of America requests that these proposals to target a specific industry for tax increases be rejected,” he said (see NGI, July 4).

©Copyright 2011Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.