Pelosi wants oil spill liability bill on the floor ‘quickly’ – aide

Several House and Senate Democrats introduced legislation this week – dubbed the “Big Oil Bailout Prevention Act” – that would raise the cap on economic damages under the 1990 Oil Pollution Act to $10 billion for offshore oil well spills, among other provisions.

The White House is also calling for congressional action. In a post on the White House blog Tuesday, communications director Dan Pfeiffer said that beyond cleanup and containment, BP must be responsible for economic damages.

“To help make sure of that, the Administration – in the context of a comprehensive energy bill which would help move us to a clean energy future – strongly supports efforts on Capitol Hill to raise the Oil Pollution Act damages cap significantly above $75 million,” he wrote.

But Pfeiffer also noted that under existing law, “if BP is found to be grossly negligent or to have engaged in willful misconduct or conduct in violation of federal regulations, then there is no cap under this specific law for damages. Simply put, the $75 million cap on damages under the Oil Pollution Act would not apply under these circumstances.”

BP CEO Tony Hayward has said in recent days that the oil giant will pay all “legitimate claims” for damages from the spill, which threatens the Gulf Coast’s seafood and fishing industries, and other sectors. The spill stems from the April 20 explosion of the Deepwater Horizon rig that BP had leased from owner Transocean for drilling a deepwater prospect.

“I think it is inevitable that the [liability] cap will be exceeded,” he said yesterday.

The House version of the legislation is sponsored by Democrats Rush Holt (N.J.), Paul Hodes (N.H.), Artur Davis (Ala.), Jay Inslee (Wash.), and several Florida members.

The Senate plan is sponsored by Democrats Bill Nelson (Fla.), Frank Lautenberg (N.J.) and Robert Menendez (N.J.).

As we noted on our On The Money blog, Nelson said Wednesday that raising the $75 million cap could be part of legislation to extend expiring tax breaks.

“We started talking about it today as putting it as a part of the very necessary tax extenders bill that we’re going to pass to keep some of those tax cuts in place for middle-income people,” Nelson told MSNBC.

Alexander Bolton and Vicki Needham contributed.