The entire Democratic leadership in the House joined yesterday in warning the Reagan administration to keep its budget-cutting hands off the synthetic fuels subsidy program Congress created last year.
As the list of spending cuts proposed by the new administration circulated on Capitol Hill, including a big cutback in the federal underwriting of a massive synfuels development program, House Majority Leader Jim Wright (D-Tex.), who led the fight for the program in the last Congress, sprang into action.
Wright quickly organized a letter signed by Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass.) and other leaders as well as House energy specialists pleading with President Reagan not to cut back this program, which is intended to help the energy industry learn to profitably produce energy from alternative sources to oil and thus lessen dependence on imports.
The letter delivered to the White House last Friday called efforts to cut back the synfuels program false economy and said the program enjoys broad support in Congress. Since the program consists almost wholly of loan and price guarantees which may never be needed, cutting the program would contribute almost nothing to efforts to reduce federal spending, the letter said, but could defeat the whole effort to open up new energy sources. Congress has made a first installment of $20 billion in guarantees to start the program.
The letter puts the leaders of the Democratic Party, who spend most of their time speaking up for the little people, fighting for financial assistance to corporate giants who generally are more closely identified with Republicans. O'Neill in particular, coming from New England at the end of the energy pipeline, has never been a close friend of the big oil companies.
The outburst from the Hill was triggered by a proposal from the budget-cutters in the Office of Management and Budget to make the private sector pay more and the federal government pay less of the cost of finding economically feasible ways to extract oil from shale and turn coal into gas or oil.
The OMB proposals would rescind $5.3 billion already provided which the Department of Energy plans to use to help build five demonstration projects. OMB also supports a proposal by the Carter administration to take back money approved for construction of a coal gasification plant by the Tennessee Valley Authority. Federal aid should be limited to support by the Synthetic Fuels Corp. of construction of five to eight plants to demonstrate problems and costs, the OMB proposal said, but not to guarantee the success of production programs. It estimated such cutbacks could save $9.1 billion during the next four years.
Wright's letter to Reagan said: "Mr. President, it is important for you to be aware that a rescission of appropriations for this program will contribute nothing to your efforts at balancing the budget" because if all goes well no federal money will be spent. Cutting back on synfuels would send the message "that we are not really serious about making America energy independent once more," the House Democratic leaders wrote. "These projects should not be held back by a false sense of economy."