NEW ORLEANS -- Results late Tuesday night brewed strongly in Tim Columbus' high-caff legislative preview Wednesday. He was talking to the fuel refiners, marketers and retailers who make up the core of SIGMA's membership.
But before he would talk about renewable fuels or underground storage tanks or debit card swipe fees, the loquacious longtime SIGMA counsel offered his take into the Democrats' landslide victory.
First, Mitt Romney. No rightful Republican should blame Romney's general election performance. Rather, Columbus said, it was an ideologically unfit extreme in the GOP primaries led by "nuclear Newt [Gingrich] and ridiculous Rick [Santorum]" that forced Romney to swing hard right early on--a move that resulted in attacks on immigrants who would ultimately decide his fate.
Second, Barack Obama. "No, he's not a socialist, but he is not a moderate." Make no mistake, Columbus warned, Obama will pull the country further left if he has his way.
Third, the GOP's failure to capture the Senate despite a favorable landscape. "Old, fat white guys should not try to redefine rape," he said, referring to extreme statements made by Missouri Senate candidate Todd Akin and Indiana Senate hopeful Richard Mourdock. Akin, Columbus pointed out, actually enjoyed a 14-point lead over vulnerable incumbent Democrat Claire McCaskill before his lampooned statement about "legitimate rape."
"The Democrats will be where they are and conceivably pick up a seat," he said, later confirming Democrats would add one seat to their majority. "Somebody who would have predicted this a year ago … would have been laughed at."
And what does this all mean to the crowd of fuel marketers? "Going to Obama on a business issue is like going to a Jesuit on a marital issue."
Simply put, the news isn't so good.
"We have this fiscal cliff," Columbus said, and "we're going to lose the Bush tax cuts." Nancy Pelosi will enjoy an even more left-leaning Democratic caucus in the House. Republicans will have to compromise on addressing the national debt by acceding to some tax increases while Democrats confront their domestic sacred cows of Medicare, Medicaid and Social Security.
As for fuel marketers, Columbus touched on a number of issues including the following:
Credit & Debit Card Swipe Fees
Yes, the Durbin Amendment was a huge win for retailers but the victory has faced attacks on multiple fronts.
First, retailer groups, including SIGMA, are vehemently opposing a proposed settlement in the class-action antitrust suit against Visa, MasterCard and the major banks. "The settlement will do nothing for retailers," nor bring structural changes to fundamentally alter the oligopoly controlled by the major credit-card companies, Columbus said.
Second, four retailer trade associations and two companies filed suit against the Fed, challenging the final rule that gives a bigger cap on debit card interchange fees for banks with more than $10 billion in assets. The federal district court decision is expected by early next year.
And third, some lawmakers in the House have sought to repeal the Durbin amendment, and while efforts have garnered little support, Columbus said SIGMA must remain steadfast in support of the amendment.
Renewable Fuels Issues
Under the federal renewable fuels program, petroleum marketers must either produce a set amount of renewable fuel or purchase a Renewable Identification Number, known as RIN. Several operators were fined last year by the U.S. Environmental Protection Agency (EPA) for purchasing fraudulent RINs even though the companies believed the RINs were legitimate. Such penalties run in the tens of thousands of dollars and potentially significantly more.
SIGMA, Columbus said, is pushing and expecting Congress to clarify the definition of fraud. In Columbus' printed legislative summary to SIGMA members, he noted that three biodiesel companies have already produced more than 140 million fake RINs, accounting for between 5% and 12% of the current biodesel market for the credits; and that the EPA was investigating the matter and other potential schemes.
SIGMA backs reauthorization of the federal highway program, and supports raising the federal motor fuel excise tax as long as funds generated are funneled directly into highway infrastructure projects.
Columbus' big concern is that liquid transportation will foot much of the bill rather than a broader-based solution such as a higher fuels tax. "Something has to happen," he said, "or the over-the-road fuels guy is going to be hammered."