Yesterday, after meeting with BP executives, President Obama announced BP will create a $20 billion disaster compensation fund for Gulf Coast workers, their families and businesses who have been affected by the oil spill. This fund will be administered by an independent third-party–Mr. Kenneth Feinberg, who oversaw the 9/11 Victims' Compensation Fund.
Gulf Coast citizens literally applauded this announcement and a new CNN poll shows that an overwhelming majority of Americans–82 percent–support the BP disaster compensation fund:
Yet, House Republicans are standing up for Big Oil and deriding the fund as a “shakedown” and a “redistribution-of-wealth” fund:
…I am ashamed of what happened at the White House yesterday. I think it is a tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown–in this case a $20 billion shakedown.
BP's reported willingness to go along with the White House's new fund suggests that the Obama Administration is hard at work exerting its brand of Chicago-style shakedown politics.
The president just called for creating a fund that would be administered by outsiders, which would be more of a redistribution-of-wealth fund.
In addition to residents directly affected by the spill and the vast majority of the American people, newspapers across the country support the BP disaster compensation fund:
Gulf Coast residents who have watched their livelihoods drown in a geyser of crude oil learned Wednesday how BP will make good on its promise to pay for the immense economic damage caused by its runaway oil well.
BP executives, who spent several hours with President Barack Obama at the White House Wednesday, announced a $20 billion compensation fund and said the company will pay more if necessary. That’s the most concrete assurance to date that BP will pay for the blow that this disaster has dealt to people’s incomes. The fact that there isn’t a cap on this fund is encouraging.
Given the size of the disaster in the Gulf of Mexico, we suspect that $20 billion may not be enough to compensate all of the people whose lives and futures have been derailed by the spill. But it's a good start…
Having $20 billion in guarantees should reassure the spill's victims, and all Americans, that BP will not be able to walk away from its responsibilities. It is also reassuring that the fund will be managed by Kenneth Feinberg, a veteran administrator who won high marks for overseeing the 9/11 victims' compensation fund.
The escrow fund is the fruit of the president’s first face-to-face meeting with top BP executives, who were summoned to the White House the morning after Obama addressed the nation from the Oval Office. It will be funded by BP but administered by an independent panel…
The $20 billion won’t cover all of BP’s liability. But it’s a start. And setting it aside now is crucial, as the company’s value plummets and its financial obligations soar.
BP’s agreement with the administration Wednesday to establish an independently managed $20 billion escrow fund provides assurance that the company will not be able to wriggle away easily from its promises to pay for damages caused by its leaking oil well in the Gulf of Mexico…
Obama’s choice to manage the fund also inspires confidence. It will be run by Kenneth Feinberg, who managed the Sept. 11 victims compensation fund…
Creation of the escrow fund at least secures a minimum amount for payout, and putting it under independent management with a formal process for payout protects against a change of attitude by BP once the media spotlight has moved to other issues.
The escrow fund is a major improvement over vague promises from BP.
For the president, the hoped-for home run swing may have come on Wednesday, when Obama announced BP’s agreement to fund a $20 billion escrow account to compensate Gulf Coast fishermen and others who have lost wages and work due to the spill. No question, this is good news for a change — a powerful boost to hopes for full, long-term recovery in the Gulf.
This is personal. The lives of fishermen and shrimpers all along the Gulf Coast follow seasonal rhythms that were utterly destroyed by the Deepwater Horizon spill. As were those of the thousands who make their livings from tourism. These folks deserve to be made whole, and in a timely manner. Creation of the escrow account is a welcome step; so is Obama’s promise to see this through, especially to so many who felt abandoned following Hurricane Katrina.
Putting $20 billion in escrow gives the government the ability to do what it needs to do to clean up the spill or pay claims of those whose livelihoods are damaged by the disaster without worry that BP has the money or the will to pay the bill.
The money should not be a problem for a company that made $63 billion during the past three years and has assets of more than $130 billion.
Announcement from the White House on Wednesday that BP will fund a $20-billion compensation fund, as well as provide $100 million for out-of-work rig workers, shows a promising start.
BP’s agreement to forego dividend payments for the rest of the year and deposit $20 billion over four years into an independent compensation fund goes a long way toward guaranteeing that Gulf Coast residents won’t repeat one grim element of the Alaska oil spill experience…
The Gulf disaster that began with the explosion on the Deepwater Horizon on April 20 is a long way from over. But the president’s insistence on an independent compensation agency is a step in the right direction for tens of thousands of Gulf residents and businesses.
And his appointment of Kenneth Feinberg to oversee compensation payments is a good choice.
UPDATE: Speaker Pelosi was asked about comments by Energy & Commerce Ranking Republican Member Joe Barton (R-TX) today on the disaster compensation fund at her weekly press conference:
Q: Do you think Mr. Barton should step aside as Ranking Member on the Energy and Commerce Committee? And do you think his sudden firestorm that's blown up around his comments represents kind of a turning point for the Republicans, and this attitude you describe of favoring big business?
Speaker Pelosi: A turning point for them supporting big business? They've always been on that track.
Q: Is this comment too far?
Speaker Pelosi: Well, let me just say that — that was one comment. I think it's important to note that it was not inconsistent with comments made the chairman of the Republican Study Committee — a part of the Republican leadership, Representative Tom Price. He said: “BP's reported willingness to go along with the White House new fund suggests that the Obama Administration is hard at work exerting its brand of Chicago-style 'shakedown' politics.”
So I think that Mr. Barton's comments fit comfortably among the leadership of the Republicans in the House of Representatives. It's up to them to decide who's in the leadership of their committees. But he is not alone in his association with sympathy for the oil companies.
As I said before, people in the Gulf are suffering from BP's negligence and recklessness. Republicans in Congress are apologizing to BP.