Budget watchdog group calls failure to extend Black Lung excise tax another subsidy to coal companies.

Press ReleaseBudget watchdog group calls failure to extend Black Lung excise tax another subsidy to coal companies.

Energy & Natural Resources,  | Analysis
Dec 10, 2019  | 4 min read | Print Article

Washington, D.C. – Taxpayers for Common Sense released a report today blasting Congress for failing to extend the coal excise tax earmarked for the Black Lung Disability Trust Fund used to pay health benefits to coal miners dying of pneumoconiosis, also known as black lung disease.

“By failing to extend the excise tax, Congress is shifting billions of dollars in liabilities from coal companies to taxpayers. This is effectively another taxpayer subsidy for one of the most subsidized industries in history,” said Autumn Hanna, Vice President of the group. Taxpayers for Common Sense is a nonpartisan budget watchdog that has served as an independent voice for the American taxpayer since 1995.

The report cites projections from the nonpartisan investigative arm of Congress, the Government Accountability Office (GAO), that estimate the Trust Fund will owe taxpayers in excess of $15 billion by 2050, and as much as $27 billion.

On January 1, the excise tax reverted to its 1977 rate of $0.50 per ton for underground coal sold and $0.25 for surface coal. This is less than half of the rates set in 1986. If adjusted for inflation, these rates would have the equivalent purchasing power of $0.12 and $0.06, respectively, in 2019.

“Congress created the Trust Fund so that coal companies, not taxpayers, bear the costs of black lung disease,” said Hanna. “Taxpayers are already subsidizing coal production through special tax breaks and sweetheart deals, and now are being stuck with the tab for this too. That’s ridiculous.”

Since 1968, black lung disease has contributed to, or caused the death of more than 78,000 miners. The Centers for Disease Control and Prevention has reported higher incidences of black lung recently, citing the practice of mining thin coal seams or cutting rock to access coal, particularly in Appalachia. This practice may expose miners to higher concentrations of silica and silicates, which cause black lung disease.

Coal bankruptcies are adding to the financial strain on the trust fund. In some cases, black lung liabilities of bankrupt coal companies shift to the government. Recently, one of the largest coal producers in the country, Murray Energy, filed for bankruptcy.

This is the first year Congress has failed to extend or increase the coal excise tax earmarked for black lung disability payments since it first increased them almost 40 years ago, in the Black Lung Benefits Revenue Act of 1981.

The GAO estimated the excise tax would have had to increase by 25 percent at the beginning of 2019 for the trust fund to achieve solvency by 2050. Instead, it decreased by 55 percent.

Congress could move forward on an extension this year. In June, the House Ways and Means Committee approved a 10-year extension as part of a broader package. Freestanding legislation has also been introduced by Rep. Bobby Scott (D-VA) to renew the higher rate through 2029.

“Congress correctly placed the burden of black lung disability payments on the coal industry in 1977. Now lawmakers’ inaction is shifting it back to taxpayers,” said Hanna.

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FULL REPORT AVAILABLE HERE.

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ABOUT: Taxpayers for Common Sense (TCS) is a nonpartisan budget watchdog that has served as an independent voice for the American taxpayer since 1995.
TCS works to ensure that taxpayer dollars are spent responsibly and that government operates within its means.

MEDIA CONTACT: sohini@taxpayer.net

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