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Senate takes up bill ending tax breaks for oil companies

 

The Senate voted Monday evening to move ahead with a Democratic-favored measure intended to repeal over $20 billion in tax breaks to the "Big Five" oil and gas companies.

Republicans joined with Democrats to advance the legislation, largely to position themselves for a broader fight with Democrats over gas prices and President Obama's energy policies -- a bipartisan vote on paper, if not in practice.

Ninety-two senators voted to begin debate on the measure; just four senators opposed it.

The "Repeal Big Oil Subsidies Act" sponsored by Sen. Robert Menendez (D-NJ) would curb tax breaks over the next 10 years for the five most profitable oil and gas companies -- BP, Exxon, Shell, Chevron, and ConocoPhillips. Menendez told reporters today the oil companies should not receive "wasteful taxpayer subsidies" on top of $1 trillion in profits.

"To me this is an easy choice, you're either on the side of big oil making record profits who certainly don't need the American taxpayers money' ... or you're on the side of the American driver and the American tax payer," Menendez told reporters.

Republicans joined Democrats in allowing the debate in hopes of framing the issue as a tax hike on energy prices. They've worked to pigeonhole the administration on this issue, as well as other energy initiatives like the Keystone XL pipeline.

Sen. John Hoeven (R-ND) said an amendment could be offered to the Menendez legislation that would green light the construction of the Keystone XL pipeline.

“We want to address energy policy, we want to reduce gas prices…we think we have great solutions that the American people want” he said today after he voted to move the measure ahead.

Senate Democrats say the money saved from ending the tax breaks could go toward deficit reduction and be used to extend a series of expiring clean energy tax incentives.

Michigan Sen. Debbie Stabenow (D), a co-sponsor of the bill, called the the measure a "no-brainer" that would be a fundamental change in the nation's energy policy.

"The last thing we need is hard earned tax payer dollars in the form of subsidies," she said.

Menendez and Stabenow did not directly address how the legislation might impact gas prices; Republicans argue that rescinding the tax credits constitute a de facto tax hike on gas, the cost of which would be passed along to consumers.

"In response to record-high gas prices, Democrats in Congress want to raise taxes on the very people who produce it," Senate Minority Leader Mitch McConnell (R-KY) said Monday. "Meanwhile, the president is blocking a pipeline that would decrease our dependence on Middle East oil and create thousands of American jobs."

Stabenow countered by recalling a hearing last year, where executives from the Big Five oil companies told the Senate Finance Committee that ending these tax breaks would not drive up the price of gas.

The Obama administration additionally backed the Senate bill on Monday, releasing a statement saying it fit with the president's energy strategy.

"There is no silver bullet when it comes to high gas prices, which is why the administration has consistently advocated for an 'all-of-the-above' approach when it comes to the nation's energy policy," the official statement of administration policy read. "By ending taxpayer subsidies to large oil companies and investing part of that money in a clean energy industry that has never been more promising, [the Senate bill] is consistent with that approach."

President Obama fired up a crowd at Ohio State University last Thursday by arguing that oil companies don't need any more help making profits.

"We have been subsidizing oil companies for a century. That's long enough. It is time to stop a taxpayer giveaway to an industry that's rarely been more profitable, and start making investments in a clean energy industry that has never been more promising," he said.