Senate Democrats set to attack big oil tax subsidies
May 10th, 2011
05:20 PM ET
4 years ago

Senate Democrats set to attack big oil tax subsidies

Washington (CNN) - Senate Democrats will open debate Wednesday on a controversial bill to eliminate several tax subsidies for the five largest oil companies and use the savings to reduce the deficit. While the measure is unlikely to make it through the divided Congress to become law, Democrats hope to score politically with voters frustrated by a confluence of deep budget cuts in Washington, sky-high prices at the gas pumps, and staggering profits on the oil giants' bottom lines.

The debate starts a day before chief executive officers from those five largest companies – ExxonMobil, Shell, ConocoPhillips, BP and Chevron – are to testify on the merits of those tax breaks.

"Seniors are struggling. Oil companies are not struggling," Senate Majority Leader Harry Reid, D-Nevada, said Tuesday. "Yet Republicans want to keep handing billions of dollars to the oil companies and ending Medicare as we know it."

"There is more hot air around this building about deficit reduction than any other topic right now," said Sen. Claire McCaskill, D-Missouri. "If we cannot end subsidies to the five biggest, most profitable corporations in the history of the planet, that come from the federal tax payer, than I don't think anyone should take us seriously about deficit reduction."

Echoing the views of most Republicans - and some Democrats - Senate Minority Leader Mitch McConnell, R-Kentucky, argued the bill would "punish this industry with higher taxes that will only destroy jobs and lead to even higher prices at the pump, instead of encouraging them to find solutions and to create jobs here."

Sen. Tom Coburn, R-Oklahoma, argued the subsidies that go to the oil companies are "legitimate business expenses" but added he was open to getting rid of them if Congress removed business tax subsides across the board.

"Why would you single out one industry?" he asked.

Sen. Jim DeMint, R-South Carolina, also said he'd like to "remove all loopholes" by creating a flat tax.

"If they're against corporate welfare, let's get it all," he said.

Democratic Sen. Mary Landrieu of Louisiana, whose state is heavily dependent on oil company jobs and royalties, said she thinks, "it's a real mistake to target any one industry in the nation, particularly an industry that employs nine million people."

And she disagreed that the issue will help Democrats politically.

"I don't think it's a very good message," she said. "I think Democrats are stronger when we're talking about creating jobs and doing the tough, hard work of (tax) reform."

Moderate Republican Sen. Mark Kirk of Illinois said he is "open minded" to getting rid of the subsidies.

"I think deficit reduction is the number one issue now," he said.

However, Sen. Orrin Hatch of Utah, the top Republican on the committee that will host the oil executives Thursday, blamed Democrats in Washington for "basically destroying the oil business in this country. A lot of them don't even do business in this country any more. And there's good reason for that– because they're constantly being mistreated by, basically, Democrats."


Filed under: Democrats • Senate
soundoff (31 Responses)
  1. charleeemanson

    Neither party has our best intrest at heart. I don't bother voting anymore. War on the middleclass starts with using oil,which in turn makes the price on everything go up, which also makes the things we need everyday unaffordable. If we can't afford to buy the things we need on a daily basis, then manufacturers can't to produce their products or hire employees to make them. And if someone does have a job, gas prices are so high that it has very difficult or next to impossible to get to work. So the next time you read an article about high oil prices please...please do not blame one party (democrats) for high oil prices. Both partys are to blame, when the sheets are pulled back you will see both partys in bed together taking kick backs from big business, and allowing their greed to run the once beautiful place called America straight into the ground.

    May 10, 2011 06:47 pm at 6:47 pm |
  2. Aaron

    Landrieu should be asking why the highest profit industry in the world is given tax breaks. She apparently doesn't realize that the U.S. is paying for billions after Katrina ravaged HER state.

    May 10, 2011 06:59 pm at 6:59 pm |
  3. Kurt

    The past two years, the Democrats controlled the White House, Senate and House and could have eliminated the tax subsidies if they wanted. If they were truly concerned about the subsidies, they would have eliminated them. But now they want to play politics and make an impression that they truly care for the common taxpayer. What a joke.

    May 10, 2011 07:08 pm at 7:08 pm |
  4. Albo58

    This President and his Dimwit allies are nothing but grandstanding buffoons with no SANE ideas on how to govern a country, economically, diplomatically, militarily, or any other category! OBO (Anybody but Obama) in 2012!

    May 10, 2011 07:54 pm at 7:54 pm |
  5. Ebu

    How can you Americans complain about gas prices? In my country, the gas prices are more than THREE TIMES what you pay, and the median income isn't that much higher.

    May 10, 2011 08:19 pm at 8:19 pm |
  6. Offsuit

    You people are hilarious. If you increase the tax burden on oil companies, do you think they'll care? Hell no, they'll just pass on the increased cost of doing business to the consumer, and rightly so.

    I'm all for eliminating subsidies for private corporations of all kinds (and lets put the ethanol industry and all the rest of the "green" favorites very next on the list to be slashed), but do you people seriously have so little understanding of economics that you think that corporations will just bend over and eat the difference? Do you think they're just sitting there saying, "Oh yes, we're evil, please punish us... let's just bend right over for you, and no lube please!". Don't be stupid. Any increase in costs for the oil companies will be immediately translated into an increase in costs for consumers.

    Between this tax break stupidity, and the equally stupid "speculators" idiocy, I fear there is no hope for there being anyone left in America who understands even the simplest basics of markets and how they function. You rail against the supposed "manipulation" of markets by speculators, while all the while completely ignoring the vastly more egregious manipulation of markets via taxation and subsidies of favored "green" industries by governments.

    It's almost funny, but make no mistake about who is going to pay for your ignorance, and it's certainly not the oil companies.

    May 10, 2011 08:33 pm at 8:33 pm |
1 2