Currently, the laughably low $75 million cap privatizes the profit but socializes the risk of a catastrophe like we are now seeing in the Gulf of Mexico. Democrats want to raise the cap and by doing so, force companies to bear full financial responsibility for their actions.
The Republican argument against raising the cap is that without corporate welfare and the promise of a government bailout if anything goes wrong, some companies might find the risky business no longer profitable enough to undertake:
Inhofe also said that raising the cap by such a drastic amount would hurt independent oil producers, since all but the largest oil companies could weather such a large liability cap.
That is an amazing statement from a supposed believer in the “free market.” It’s also complete nonsense. Smaller companies don't need to weather the liability alone. They can buy insurance to spread the risk. If, without a corporate welfare program, a company no longer takes an action because the cost of insuring against potential liability makes that action unprofitable, that is a good thing. That is how the market should work, without moral hazard. We don't want companies taking foolish risks that are only profitable because the taxpayers have promised a bailout if anything goes wrong.
The Republicans love corporate welfare, privatized profit, socialized losses and endless bailouts. They fought against universal single-payer government-run health insurance for middle-class families, but they think a de facto version for oil companies is a great idea. That’s what the liability cap is: the government insuring corporations against their own risky behavior.
If anyone should be protected from the harshest aspects of the free market, it’s regular people, not corporations. I support single-payer health insurance because the market should not be choosing who lives and dies, who gets treatment and who suffers. I'm more than happy, though, for the market to decide which corporations live and die. Let the market decide which actions by oil companies are too risky to be profitable, and which companies should go bankrupt for their mistakes.
Senate Republicans want a government welfare program to protect oil companies from the market and socialize their risk. The poor oil companies need a government safety net. The health of the average person can be subject to the whims of the free market.
Republicans actually support "socialism," government-run insurance and bailouts--for big companies. Will crusading for unlimited benefits for irresponsible oil powers be a winning campaign message for Republicans in the midterm elections? If Democrats can't capitalize on this ridiculous hypocrisy, they don't deserve to win either.