As British Petroleum continues the business of plugging a destroyed oil well in the Gulf and helping Gulf coast communities to cope with oil coming ashore under the 1990 Oil Pollution Act, a whole new political drama is about to unfold.
Tonight, Tuesday, June 15, President Obama will propose on national TV that BP set up an escrow fund, to be administered by an indepenedent panel, to pay for compensation to "victims" of the oil spill in the Gulf. Read it all here at the WSJ.,<\a>">here at the WSJ. Senate Democrats have graciously advised BP to start its payments to the fund at $20 billion.
BP has more than 600 claims personnel working to pay fishermen and others that have suffered economic damage. It has vowed to pay all "legitimate" claims and has worked through 20,000 of 42,000 submitted so far, at a cost of $53 million. BP has also promised it will not limit its payments to the Oil Pollution Act's $75 million cap on these damages, and last month it announced it would hire an independent mediator to review claims. Any claimant denied payment has the right to sue for redress under the law, which means BP has an incentive to get these payouts right.
Here is the bottom line for such a political agenda: Democrats are vowing this fund will be tightly crafted and used only for oil-spill payments. But only last week Democrats on Capitol Hill wanted to siphon money out of the Oil Spill Liability Trust Fund—established in 1986 and funded by oil taxes to help clean-up spills—to pay for their extension of unemployment benefits. The history of such government funds is that they are always raided for politically favored purposes.
Remember, this is the White House that says, never let a crisis go to waste. True to form again!
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