Oh great, the Gang of Ten is now the Gang of Sixteen. These terms are thrown around as if they're funny, when the serious truth is that the entire Congress is a Gang of 535. (Fine fine, Ron Paul fanatics, the Gang of 534.)

If you want to see a point-by-point critique of the original Gang of Ten plan, go here (pdf). In this post, I just want to elaborate on the political context.

Back in June, there was both a congressional and an executive ban on (new) offshore oil drilling in large portions of federally controlled areas. On July 14, President Bush rescinded the executive ban. (Incidentally, that's the exact day when oil prices began dropping like a stone.)

The congressional moratorium expires on September 30 with the federal fiscal year. That means the Congress will have to take positive steps to renew the ban, and the White House will have to sign it into law.

So you can see the pickle that the anti-drilling forces (mostly Democrats) are in. A substantial majority of Americans tell pollsters they want more domestic energy production. So the Democrats can't come out and renew the ban; the Republicans would have a field day in November with that.

Enter the Gang of Ten. By adopting a Paris Hilton compromise, it seems they are being very sensible and above politics--hey, that's so touching that they have five Republicans and five Democrats! Aww, I'm tearing up.

But this "compromise" is nothing of the kind. The plan has $84 billion in subsidies and tax credits for lefty pet projects (fuel efficient cars, biofuels, etc.), and it will pay for $30 billion of this by removing the manufacturing tax credit on oil and natural gas companies. (They didn't specify where the other $54 billion will come from, but I imagine it's not the Tooth Fairy.)

Oh, but at least it allows for more offshore drilling, right? Well, barely. It allows four coastal states to opt out of the current ban, if their state legislatures approve. BUT, even so there will still be a 50-mile buffer zone, meaning that even these four states still won't be allowed to drill anywhere near their coasts, even though some of the most promising known deposits are within 50 miles of the shore.

This is why commentators at the Wall Street Journal and the Excellence in Broadcasting Network are so mad at the Republicans who joined the Gang of Ten (Sixteen). The Republicans had a straightforward, winning issue by championing drilling. But now the Democrats can point to the bipartisan compromise plan, putting the onus back on Republicans to oppose it--and thereby risk a government shutdown blamed on them, if they can't agree on a new bill to fund the government by October 1--or to accept it, even though this will yield a piddling amount of new domestic energy production.

I think this is why purists couldn't believe I was wasting my time working for a think tank, trying to educate politicians about sensible policies. Even if it looks like the strategy is working--the voters are for it, the economics is right, and the "free market" politicians will be popular by supporting it--something will always happen to ensure that inefficiency wins the day.