February 11, 2016

Cassidy Pushes Back on Obama’s Budget, Defends Revenue Sharing

WASHINGTON— U.S. Senator Bill Cassidy, M.D. (R-LA) delivered remarks in response to President Obama’s fiscal year 2017 budget, which proposed repealing the existing revenue sharing law. Louisiana’s state constitution dedicates 100% of revenue from offshore energy production to coastal restoration.


Watch the video here and read the transcript below:

On the 10th anniversary of Hurricane Katrina, I went down to the Lower Ninth Ward. President Obama had a little convocation, which I was privileged to be part of. And I pointed out that his budget that year attempted to take the money that the federal government has committed, voted on by a majority of this chamber, to share in the offshore revenue from Louisiana’s coast, Texas’ coast and other Gulf Coast states, with those states.


And I said, Mr. President, your budget is taking this money away. If you look at the devastation brought by Katrina, it was brought because we’ve lost our wetlands. A loss directly connected to the federal government’s decision to channel the Mississippi River for the benefit of the rest of the country’s economy. And also because of the Army Corps of Engineers failing to build—and this has been established in court—levees to the degree that it would protect the city of New Orleans.


The president clearly agreed. He said so. He looked at his budget man, Shaun Donovan, and said, why would this be? We need this state to have that money. I paraphrase but it was essentially that. And he committed to taking care of that issue so that our state would not be confronted with the kind of disaster Katrina was. He did not want this to happen again.


On Tuesday, the president released his fiscal year 2017 budget once more. Despite his words, he proposed repealing existing revenue sharing law, which would deny Louisiana and other Gulf Coast states billions. Louisiana will use this money in critical coastal restoration. By doing this, the president betrays the commitment he made in the Lower Ninth Ward.


The president and some in this chamber want to repeal a law that received bipartisan support with over 70 senators supporting the original legislation in 2006.


By the way, it is also a law that anti-poverty and environmental organizations support. I hold up a letter from Oxfam. Oxfam America states in this letter that, ‘America’s Gulf Coast is home to some of our nation’s highest rates of poverty, greatest risk of natural disasters like sea level rise, hurricanes, flooding, and coastal land loss.’ Passage of Amendment 3129, which is, by the way, my amendment to the energy bill, which brings more equity and revenue-sharing, will provide new resources to address the glaring inequities facing these communities.


In response to the president’s fiscal year 2016 budget, the Environmental Defense Fund, the National Wildlife Federation, the National Audubon Society, the Lake Pontchartrain Basin Foundation stated that they are ‘Disappointed by the budget’s proposed version of critically needed and currently dedicated funding for coastal Louisiana and the Mississippi river delta. This proposed budget undercuts the administration’s previous commitments to restore critical economic infrastructure and ecosystems in the Mississippi River delta, where we are losing 16 square miles of critical wetlands every year, a preventable coastal erosion crisis.’


So if you’re pro-environment and pro-helping poverty-stricken communities, how can one not support revenue sharing for coastal states?


Now, coastal restoration is critical to Louisiana’s economy and safety but also to America’s economy. Every 38 minutes, Louisiana loses about a football field-size chunk of land. I’m presiding next. At the bottom of the hour, Louisiana has lost another football field of land. This revenue sharing helps reverse that.


And by the way, in Louisiana, our constitution dedicates 100% of revenue from offshore energy production to restoring and rebuilding our coastal wetlands. Now I’ll say, a strong coast protects families and businesses against a storm surge. It prevents posters like this, ‘why New Orleans still is not safe,’ and posters like this, and many other posters.


Now, with our coast so degraded, it puts Louisiana’s economy in jeopardy but also, it puts America’s energy and trade infrastructure in jeopardy. And most importantly, loss of coastal wetlands puts American lives in jeopardy.


Not only do we need to protect this revenue sharing that was promised, but I and others feel that we must increase that revenue-sharing amount if we are to truly protect our coast. Royalties to states from energy produced offshore is a fraction of what states that produce energy onshore receive. In fiscal year 2014, the federal government received $4.6 billion—with a “B”—in royalties from energy production in the Gulf of Mexico. The coastal states who provide the energy infrastructure received $3.4 million, with an “M.” 0.07% of the royalties. In comparison, states who produced energy onshore—I think the presiding officer’s state is such—gets 50% of those royalties. 0.07%. 50%. There’s no equity there. 


Now, I’ve introduced a bipartisan amendment to the Senate energy bill, that I hope we can keep working on, to provide this greater equity and revenue sharing for states that do host offshore energy production.


For decades, energy activities in the Gulf of Mexico have produced billions of barrels of oil, trillions of cubic feet of natural gas. The Gulf of Mexico offshore oil production accounts for close to 20% of the U.S. crude oil production. Over 45% of total petroleum refining capacity in the United States is located along the Gulf Coast, as well as 51% of total U.S. natural gas processing plant capacity. The Gulf States provide the docks, roads, railways, refineries and other infrastructure that make energy production possible to fuel America’s economy.


On top of this, our waterways support trade throughout the country. Farm crops produced throughout the upper Midwest pass through the lower Mississippi on its way to international markets. We need equitable revenue sharing to continue hosting these industries, ensuring that America continues to have a resilient domestic energy supply and access to the goods and services we need.


If the president is serious about protecting families, our environment, enhancing the resiliency of the Gulf Coast and improving the nation’s economic infrastructure, he should work with Congress to ensure that this never happens again.