Legal Lines with Locke Meredith
Bill Cassidy
Show #113

Mr. Meredith: Hello. I’m Locke Meredith. I’d like to invite you to join me on the next Legal Lines where are guest is United States Congressman Bill Cassidy. He is a Doctor and he is going to talk to us about the challenges in the United States Congress, the National debt, the budgeting process, and of course of great interest, he is going to talk to us about the oil rig spill in the Gulf of Mexico. So join us on the next Legal Lines with our United States Congressman Bill Cassidy.

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Mr. Meredith: Hello. I’m Locke Meredith and I am very pleased to have on the show today our United States Congressman Bill Cassidy. Bill thanks for being on the show again it’s been almost a year, actually probably a little over a year, I can’t believe it.
Congressman Cassidy: Thanks for having me.
Mr. Meredith: Tell the folks kind of what you have been up to. I know it’s been a busy, busy time.
Congressman Cassidy: This has been my first term in Congress. It’s been a great first term. I ran because I was upset about how our government was spending money. I hate to say that our government has spent even more but now because of the people, the discussion has been focused away from spending more to spending less.
Mr. Meredith: Which is a big shift.
Congressman Cassidy: A big shift. That’s because of the people, which has been really neat to see. We’ve talked about healthcare, which means a heck of a lot to me. Lastly, the oil spill which is so important to our State and so it’s been a privilege to be in the middle of that discussion trying to shape the conversation in a way that is good for the working people in Louisiana.
Mr. Meredith: You are our Congressman for District Six, which encompasses about what eight parishes?
Congressman Cassidy: I think it’s at ten. I have East Baton Rouge and some or all of each parish that surrounds it.
Mr. Meredith: Which is over seven hundred thousand people.
Congressman Cassidy: Yes.
Mr. Meredith: So you are representing seven hundred thousand people when you are up there in the House of Representatives.
Congressman Cassidy: And that is a challenge.
Mr. Meredith: I know it is. Last time we talked, the bottom line is that the Democrats had a super majority. Meaning that they controlled the house and didn’t need any Republicans to help them pass anything. In the Senate they had sixty votes and didn’t need any Republican Senators to help them pass anything. That changed when Senator Scott Brown was elected. How has it changed they dynamics of the communications between the Democrats and the Republicans?
Congressman Cassidy: There are significant philosophical differences between the two. Once Scott Brown got elected, it forced the conversation to come a little bit back towards the center because at least on the Senate side they needed some Republican support to get things through. When it comes to things such as the oil spill, there are folks in the left wing of the Democratic party that want no drilling anywhere off of the coast of any State. There are others who think we can still do that and import less from OPEC Nations, which you’re not quite sure in Louisiana how that would happen. That is the argument currently prevailing in the House. I think the American people are far more towards the center on that.
Mr. Meredith: Which is what position?
Congressman Cassidy: The position would be that we want responsible, safe drilling. An exploring of our own natural resources and the jobs that it creates and import less from OPEC nations as we enhance our own production.
Mr. Meredith: Let’s go ahead and talk about the Deep Water Horizon spill disaster. You’ve been pretty much involved in that because it is falling in the State of Louisiana. Tell the folks what is going on.
Congressman Cassidy: There are several committees that had jurisdiction. The primary committee is natural resources and I am fortunate enough to be on that committee. As the scientists said, the President asked scientists to review what happened and they said that there are identifiable causes.
Mr. Meredith: Meaning what?
Congressman Cassidy: It means that you can look at the way that pipe was set and see that BP cut corners as to how the pipe was set.
Mr. Meredith: In fact, I think I read, Bill, that the number of braces used to construct that was six instead of twenty-one which other folks like Exxon would have used.
Congressman Cassidy: Yes. So if the drill well is right, exactly in the middle, the cement or concrete from the bottom is better able to seal it. If the centering is off, if you will, then the cementing is not effective. It appears that the well may have been off to the side, the cementing was not effective and so when the oil and gas began to flow from the depths to the surface it was because that cementing job was faulty. That was identifiable; you could see how to prevent that in the future. The scientists that the President commissioned said we don’t need to have a blanket moratorium those things can be corrected now.
Mr. Meredith: That is a big issue for our State and that is the issue of the moratorium. Explain to the folks what is going on in that regard.
Congressman Cassidy: Yes. Right now.
Mr. Meredith: When we say moratorium, tell them what that means.
Congressman Cassidy: The President has said that there shall not be anymore outer continental shelf drilling until further notice. They have sent a signal that it will be November 30th but they can keep it longer or they can shorten it.
Mr. Meredith: In fact a law suit was filed by some of the energy producers and the trial court ruled that the moratorium was not appropriate.
Congressman Cassidy: Yes.
Mr. Meredith: The Administration as I understand it, appealed it? The bottom line is that no one is going to be spending millions until they know they are okay.
Congressman Cassidy: Judge Feldman in New Orleans said, “Listen Federal Government, President Obama; you have not made your case. I side with the working people of Louisiana. It seems that the benefits from your moratorium are far out weighed by the economic hardship upon the people of Louisiana.”
Mr. Meredith: In your opinion that is appropriate, because already we know that they did not construct this well properly, in the way a lot of the other energy producers would have.
Congressman Cassidy: Correct. We know that because again, the Presidents own scientists from the National Academy of Engineering gave that opinion. They are the ones that said there should not be a blanket moratorium, rather you should go and inspect and make sure the ones that are out there are doing it properly. If they are it can be done safely.
Mr. Meredith: The reason this is such a big deal for Louisiana is because, I was reading, one energy job creates with all of the other service energy jobs, five and a half more jobs.
Congressman Cassidy: These are well-paying jobs. As you and I know, folks who work two weeks on, two weeks off, they will go out to the rigs for two weeks, they return and stay at home for two weeks. In those two weeks on the rig they will earn enough money to send their kids to parochial school, buy two cars, have a house note, and take care of their family. If all of a sudden you shut down those jobs, then that’s a house mortgage, tuition, car notes that cannot be met. The President has set up a relief fund if you will.
Mr. Meredith: That’s the twenty billion dollars?
Congressman Cassidy: No, this is a hundred million. The twenty billion doesn’t apply because Mr. Finberg, the Attorney who has been put there said that the moratorium has nothing to do with the oil spill.
Mr. Meredith: So he is not paying any moratorium costs out of that twenty billion.
Congressman Cassidy: Now there’s a hundred million to compensate for lost wages but it is estimated that there will be seven hundred million in lost wages. The hundred million does not help the caterers or the grocery stores or anyone else who provides services to those folks offshore.
Mr. Meredith: Interesting. So what is taking place in the Federal government to deal with this spill now? You hear everyone say well, it looks like it is cleaned up. A story came out yesterday that says eighty percent of the oil is still in the Gulf. What is your understanding?
Congressman Cassidy: Clearly, we need to get more understanding of the facts. One misconception people have is that the oil is just like oil. Instead the oil is mixed in with the water in parts per million. That can still have an impact but what we in Louisiana need to know is certainty of how much oil is out there, if it is affecting our seafood, which right now its not, and what can we do to prevent this disaster from occurring in the future.
Mr. Meredith: All right and what are your thoughts regarding the twenty billion dollars set aside?
Congressman Cassidy: Finberg is going to do a good job. We met with him in D.C. He is going to take a broad understanding of the impact of this. If for example a realtor was about to close a deal on someone that was buying a home and their home had to be here because of their involvement with OCS drilling and now they are not going to buy the home, he will compensate the realtor. I think he is going to take a broad understanding of that and that will be good for our State.
Mr. Meredith: All right. Let’s also talk about the Clear Act on the next segment. This is Locke Meredith with our United States Congressman Bill Cassidy. We will be right back.
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Mr. Meredith: Welcome back to Legal Lines. I’m Locke Meredith and again I am very pleased to have on the show Bill Cassidy. He is our United States Congressman for District 6. Bill, we were talking about the spill in the Gulf and I know that there has been some legislation that has passed the House and it is being contemplated by the Senate. Explain to the folks what it is.
Congressman Cassidy: Well of course Congress wants to respond to the disaster. The Clear Act was originally introduced about two years ago. It had nothing to do with the disaster.
Mr. Meredith: So prior to the spill?
Congressman Cassidy: Prior to the spill. It was resurrected if you will, to address the spill but also as a vehicle for some other things. One of the things it does, that will be of concern for us in Louisiana is it creates unlimited liability for anyone who is drilling out in the Gulf. President Obama opposes this. Many Democrats oppose this but, none the less, it passed because frankly people want to punish BP.
Mr. Meredith: When you say unlimited liability, what do you mean?
Congressman Cassidy: It means if you are a mid-ranger, there are five notable companies out there. Exxon, Chevron, Shell, BP, they have huge holdings. They can do what BP is doing right now which is keep on writing checks until everything is made whole. There are other companies which employ about three hundred thousand people and get about ninety percent of the leases in the Gulf of Mexico.
Mr. Meredith: These are what we refer to as the Independent producers?
Congressman Cassidy: Independent producers.
Mr. Meredith: They are actually providing fifty percent of the jobs.
Congressman Cassidy: I have read higher than that. Let’s say its fifty percent, so three hundred thousand people are employed by these companies. They will go where the big companies wont go until the big companies see that these companies are making a profit. It’s really important to our economy. The way they have addressed it in the past is that there is a fee on every barrel of oil produced that goes to an oil spill trust fund. So if a smaller company has an incident, they would first have a legal liability, if there are criminal charges that liability can be much greater than the seventy-five million, but if they are doing everything right but there is a spill they have a seventy- five million dollar cap and then it kicks over to the oil trust fund.
Mr. Meredith: Are there any limits to access the money in that trust fund?
Congressman Cassidy: No. Technically there isn’t by law, but what happens is that there is so much deficit spending that the trust fund, even though it is not a tax on the people, and even though it doesn’t go to the deficit, in the accounting it makes the deficit spending worse. There is reluctance to spend that trust fund not because it couldn’t be used but because it offsets deficit spending elsewhere.
Mr. Meredith: It looks good publicly and in politics.
Congressman Cassidy: It hurts Louisiana but theoretically it helps the rest of the country. They are sacrificing Louisiana’s interest, the jobs that these independents produce in order to make it look better for the rest of the country. The Clear Act ultimately was a cynical exploitation of the tragedy for the benefit of interests elsewhere.
Mr. Meredith: You aren’t saying that you wouldn’t want folks who have been injured to be fully compensated. You are saying that the system as it exists cannot accomplish that.
Congressman Cassidy: Certainly, the system has it exists and as it has since been tweaked since the tragedy can accomplish that. There are still some things we can do further but in terms of big scale. For example, one thing that this bill did, it put the two dollar fee on every barrel of oil produced on Federal waters. That two dollar fee doesn’t go to rebuild the coast line it goes to buy park land across the United States.
Mr. Meredith: So it has nothing to do with the oil industry at all?
Congressman Cassidy: Nothing to do with the oil industry except so far they make domestically produced oil cost more, it make foreign oil relatively cheaper, and so it shifts jobs from domestic production to buying foreign oil.
Mr. Meredith: That is a national security interest concern of great weight.
Congressman Cassidy: Yes.
Mr. Meredith: Explain that to the folks.
Congressman Cassidy: If we buy more oil. Lets say we decrease production in the Gulf of Mexico by twenty percent. The people that we make that up from are typically OPEC Nations, think Venezuela. If we buy more oil from Venezuela, one their environmental protection is not as good, two they aren’t employing Americans, but we are putting money in the pocket of Hugo Chavez who doesn’t like us, and uses that wherever he can.
Mr. Meredith: Frankly, it’s the same thing over in the Middle East.
Congressman Cassidy: many of the countries in the Middle East.
Mr. Meredith: The money is going to the folks who for whatever reason don’t support America. As I understand it, you said that these independent producers would have ninety percent of the lease, they employ at least fifty percent of the folks so what we are doing is raising taxes on those guys and running them out of business thus shifting jobs overseas and requiring imports from overseas. We are reducing our ability to produce our own oil for our own needs.
Congressman Cassidy: The Defense put out a white paper a year or so ago in which basically they recommended we become less dependent on countries in the Middle East. By having this outer continental shelf moratorium we are becoming more dependent on those countries.
Mr. Meredith: In fact, I read that one of the rigs, there a very limited number of rigs that can do these operations, is already headed to Africa.
Congressman Cassidy: Yes. Two or three of the rigs have already moved. The rigs rent for five hundred thousand dollars a day. So the question is that if the moratorium is going to stretch on for six months or more do you keep a rig here for five hundred thousand dollars a day for it to sit, maybe to be maintained but at some point you have done all of that or do you just say you are going to cash it in and take it to the coast of Brazil?
Mr. Meredith: So the great concern is, kind of to summarize. Let’s say there is a war in the Middle East, that is a distinct possibility, and oil production is interrupted or someone over there doesn’t like us and says they aren’t sending us anymore oil. Do we have the capacity to produce that oil for ourselves?
Congressman Cassidy: We don’t have the capacity to do it entirely. The degree that we shut down OCS drilling, we decrease our capacity to do it at all. I think that thirty percent of our domestic oil, domestically produced oil in the United States comes from the OCS drilling off the coast of the Gulf of Mexico and twenty percent of our natural gas. Thirty percent oil, twenty percent natural gas will be gone. Now you can say that the ones that are already producing will continue to produce but ultimately those will need to be replenished and that’s what we are talking about.
Mr. Meredith: All right. Let’s shift gears. Let’s talk about the economy because it all kind of folds together. We are so much in debt it is unbelievable and its truly affecting the economy. Tell the folks kind of where we are.
Congressman Cassidy: The American people I think understand this better than the folks in Washington D.C do. We have more debt than we have ever had in the history of our country.
Mr. Meredith: Which is how much?
Congressman Cassidy: I think there is fourteen trillion dollars and there are estimates of thirty to forty thousand dollars for every man, woman and child.
Mr. Meredith: Meaning every United States citizen from a one day old baby to a ninety nine year old person, the government has gone out and charged on our credit card that we have to pay back thirty to forty thousand dollars.
Congressman Cassidy: Absolutely. Now that begins to hurt the economy. The more the government borrows the less there is for private business to borrow and if they cant borrow they cant expand business and hire more workers.
Mr. Meredith: All right. Let’s continue this discussion on the next segment. This is Locke Meredith with our United States Congressman Bill Cassidy. We will be right back.
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Mr. Meredith: Welcome back to Legal Lines. I’m Locke Meredith and again I am very pleased to have on the show Bill Cassidy. He is our United States Congressman for District 6. Again Bill thanks for being with us. Let’s keep talking about the economy it is the number one issue for folks because we have 9.5 percent of the population who is unemployed and really it’s higher than that. The economy is going to do, they say, a double dip recession or at best we have a jobless recovery. So that means ten percent of our population is going to be unemployed. Talk to the folks about what we can do.
Congressman Cassidy: Well I have quickly learned in my first two years of Congress that business wants certainty. If they are going to make a business plan for the next three to four years they want to know what the taxes are going to be and what the regulations are going to be. If they are about to do a big expansion and then they get hit with a higher tax or regulations that consume some of their profits they cannot plan their business. So they will just hunker down. Right now there is uncertainty in both taxes and the regulatory environment that is inhibiting business from investing.
Mr. Meredith: As I understand it, come January 1st taxes are going to go up. Explain that to the folks.
Congressman Cassidy: President Bush came in and we had a recession about ten years ago he put in tax cuts for some people. So people who had previously paid taxes, no longer paid taxes. The people at the higher income levels paid less taxes. These are the so-called Bush tax cuts. They said they were only in affect for ten years. One of two things will happen in January. Your taxes wont go down. If they talk about extending the cuts they don’t mean that your taxes go down.
Mr. Meredith: They stay the way they are.
Congressman Cassidy: They either stay the way they are or if they are allowed to expire, the taxes will go up.
Mr. Meredith: For everybody?
Congressman Cassidy: It depends. Some would say let the taxes go up for everyone. Others would say only let the taxes go up for those who are higher income. The Republican concern about that is that if you let them go up for small business owners, who are going to be in the higher income folks.
Mr. Meredith: And as I understand it, small business owners produce sixty percent of the jobs in our economy.
Congressman Cassidy: They are the engines of economic growth in our country. Look at the statistics.
Mr. Meredith: But those taxes go up.
Congressman Cassidy: If taxes go up they will have less money to invest in other jobs. There is a fellow running, I think his name is Tim Scott, running for Congress in South Carolina, a Republican and he says if you make the small business owner pay higher taxes he cannot hire more people. It is kind of a nice way of putting it. That regulatory and tax uncertainty is inhibiting businesses from making the investments that would create more jobs.
Mr. Meredith: So what do you propose?
Congressman Cassidy: I think that we just need to send a signal to business women and business men that you are going to have a stable environment for both taxes and for regulation for the next five years.
Mr. Meredith: How do you do that?
Congressman Cassidy: The tax scenario is at least until we are through with this recession. Hold taxes as they are.
Mr. Meredith: Do you see that happening?
Congressman Cassidy: I think it depends on how the November elections turn out. If the Democrats retain control of the House then I think that taxes will go up.
Mr. Meredith: Let’s talk about the fact that the government has now borrowed so much money. We were talking about how it is thirty thousand per citizen, how that affects the economy. Which I guess that means there is less money out there for folks to borrow. Explain that.
Congressman Cassidy: When the stimulus package was passed by the President, at that time the Congressional Budget Office, an independent agency, they looked at it and said in ten years we will have less economic growth as a country because the money that the government borrowed is not available for business.
Mr. Meredith: The way I look at it, tell me if I am wrong Bill, in essence what the government did is they said we are going to take money that we would have spent over the next ten years right now and we are going to spend it right now. We are going to make you pay for it over the next ten years. They have only spent out of the two trillion dollars about twenty five percent or a third of it. The debt, the interest that we are going to have to pay really negatively effects because it has negative effects.
Congressman Cassidy: Absolutely. You are a small businessman. Ultimately your profits will in part be spent on taxes that are paid on that debt. The more they make you pay, the less you have to hire another worker.
Mr. Meredith: It boils down to philosophy doesn’t it? We are saying there’s this amount of money and either the government is going to spend it or the private sector is going to spend it and the question is who is going to spend it most efficiently and effectively to produce jobs and a good economy for folks.
Congressman Cassidy: One way to look at it is: who is more likely to spend the money efficiently to create jobs that last long-term. We heard about the bridge to no where a few years ago that was a bridge in Alaska that went no where. Well business never would have done that. Businesses would have said well no, we are going to have a bridge here where we will have a hundred thousand cars pass a day, that is where we build a bridge.
Mr. Meredith: Let’s talk about Louisiana and what you have done in terms of getting highway funds for Louisiana and different grants also.
Congressman Cassidy: Let me compliment the State Legislature and the Governor because both entities have attempted to get more money for highways here on the I-12 and the I-10. My office has attempted to do that on a Federal level. We work with the State Department of Transportation to come up with road projects where we can benefit this ten-parish area. Ascension, East Baton Rouge, Livingston, West Baton Rouge, all the parishes including the Feliciana’s and St. Helena have tremendous road problems. That is going to be a long-term goal. How do we build out that infrastructure so that we have more economic growth here so that we aren’t choke holding it by having an inadequate infrastructure?
Mr. Meredith: I know you have also been working on the erosion problem that we have with out wetlands. Explain that.
Congressman Cassidy: Well I tell my staff that we are lucky to be representing this District for a number of years. The coastline has to be our issue because even though it is technically not my district, it’s in my State. It all involves the Mississippi. We need to figure out how to use the Mississippi to save our coastland.
Mr. Meredith: That’s what you are working on now?
Congressman Cassidy: Yes.
Mr. Meredith: Bill, thank you so much. We appreciate you being on the show again. We look forward to having you again. This is Locke Meredith with Legal Lines and our United States Congressman Bill Cassidy.