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."
The subsidies must go. I'm sick of paying for them, that's why!
It's basic economics. ANY elimination of subsidies will result in a hike in gas prices to accommodate the loss in profits. Unfortunately, Obama and his liberal army of politicians have brainwashed the ignorant voting populace into zombies who chant "Capitalism is unfair" and "Corporations are the enemy".
Make no mistake about it – the Congressmen and Democratic leaders who push for this legislation are knowingly pushing for an increase in prices at the pump. They are willfully trying to make you pay more, and hate more. They know that this is the only way this plays out, just as I do. Do you?
I would like to take this opportunity to thank our president for the highest sustained gas prices in my lifetime. Thanks for me not being able to afford to drive within my own county to pick up my kids from school. Thanks for not being able to afford to drive to find a job. Thank you so much for not releasing permits to drill for oil. Thanks for not releasing any of our reserves to lower the prices. You are truly the best thing that ever happened to Jimmy Carter. Attacking the oil companies will do nothing but hurt us further.
Were not paying for subsides. Eliminating them will cost us more at the pump. Drill Here!!!!!!!!!!!!!!!!11
Yeah, those bad bad Democrats don't treat the oil barons right – imagine, they made BP take financial responsibility for the disaster in the Gulf! It's a good thing we had Republicans to apologize to them.
No tax subsidies allowed for any oil company because they are making huge profit every year and they still get the tax subsidies, which don't make lot of sense. However, if they are losing money every year, then they should receive tax subsidies .
Lie. Obfuscate. Deny. Stall. Muddy the Water. The GOP playbook never changes.
The United States Oil Industry has petroleum specific tax breaks Mr. Colburn. As a senator, you should know that. For example, oil royalties in Saudia Arabia are treated differently than royalties in Texas. Shouldn't they all be the same? I say we repeal this patchwork of special interest corporate welfare that the oil industry gets today. They have made, and will continue to make, record profits. They don't need a handout from the Federal Government.
I thought you GOP'ers stood for cutting spending. Why are we spending money on oil companies?
Let's drop the "offsetting flags" approach that suggest more than one party deserves to be punished and let's correct the wrongs that we see staring us right in the face.
When are they gonna attack big government for the costs that their bureaucratic bull imposes on the price of oil? I am sure there are some corporate tax benefits that could be cut but they should also apply to GE. What if Obama and the Democrats had instead of pushing a trillion dollar stimuless package that created nothing but additional debt had put forth a trillion dollar grant and loan program for a combined energy program of domestic fuel sources as well as innovation of new technologies like electron guns and hydrogen fuel cell research? How about that instead of the same old increase tax that results in increased costs to the consumer, it is a viscous cycle of stupidity out of our government, both sides!
Chris, how can you blame Obama for the second most highest gas prices, when good 'ol boy George Bush set the record for everything gas,food, and housing. Now how you like them apple, Chris
First cut the subsidies to these corporate parasites and second, don't issue any new drilling rights to them until they have used American labor to build new refineries within the U.S. borders. Remember that the real bottle neck is their limited capacity refineries. I'd like to see a couple of Republican back this, but I ain't holding my breath.
Why stop at Big Oil? Many other sheister Big $ lobbyists take advantage of the system and rig the tax laws. With the exception of agriculture...ALL subsidies should be abolished. Don't stop there...make all corporations pay the same tax rate and nobody gets to zero-out. How do gigantic corporations like GE get away with not paying any tax? Why do only the fat cat Robber Barons get to write-off all their "expenses" and likewise not pay ANY tax in many cases? While the Middle Class gets hammered and if you're single with no property...you get hit the maximum tax rates. It is just nuts...fix this mess.
I will take the flat tax. I'll give 25% of my gross(12 fed, 8 state, & 5 local). If I make money you get money, not a dime more.
No sales,gas tax,no levies,surcharge,just 25% and stay off my back.
and would you ck on the hedge fund guys while your at it...
Chris-what can you say, you just can't argue with stupid? Econobamics and Terrence is not only the Professor but the fruit salesman...
Drill baby drill on febural land and sell the gas at the pump those oil company will get the message real fast.
First repeal the "green" subisdies. Green (what a patheitic label) power sources receive 21 TIMES the subsidies as a percentage of revenue then oil, gas or coal. Solar and wind must be backed up by conventional power sources because they are UNRELIABLE and do not sustain themselves over long periods of time. Cloudy days and no wind. Furthermore a solar farm of 20 sq. miles supplies the same power as an average conventional powerplant on 20 acres. What a joke. What ever Bush may have started Obama has aggravated it and made it worse.
It about Time the OIL Company are making Billion of dollar In Profit , The don't need these Tax Subsidies too. Put that money to help with the Budget cut.
I'm reading here- drill more, we will pay higher prices if sunsidies are removed. People – CLEAN ENERGY! get rid of oil.! Stop thinking of how to make this disappearing resource cheaper or more plentiful, Replace it!
"Senate Democrats set to attack big oil tax subsidies"
Which will thereby cause the price of gasoline to go even higher. The only people who don't understand this are Senate Democrats.
I'll also point out, again, that the oil companies make a profit of only about 2 cents per gallon of gas sold in the US. Governments, on the other hand, take an average of 48 cents per gallon in taxes. Just who's doing the gouging here?
I remember in late 1998, gas was like 98 cents a gallon. Then Bush got elected and the cost of everything started going up. This is not Obama's mess – he is still cleaning up after the Republicans.
Thank you President Obama for actually trying to do something for struggling Americans. You will win by a landslide in 2012. Most people in this country will never elect a Republican again because people now understand how the right wing has destroyed our America for the sake of a few wealthy people and corporations.
Great on foreign policy – check
Understands economics for struggling Americans – check
Fighting for immigration reform – check
Pushes back on Republicon lies and deception – check
Now just what is it about Obama the cons don't like? Oh yea – he's actually trying to help people and not just rich people.
Not only do oil companies get billions of dollars in profits, they pay no taxes, and actually paid billions more out of tax payer money. It doesn't make sense to take money from elderly and the poor to give even more to the oil companies.
she said. "I think Democrats are stronger when we're talking about creating jobs and doing the tough, hard work of (tax) reform."
Raising taxes and growing the government is not the kind of tax reform or job creation America wants or needs.
Coburn is right that we don't need any subsides for any corporations. Lets cut it all across the board. Oil & Gas prices are going higher this summer with the Campaigner and Chief in charge. The anti business President I am sure will stick it to Big Oil but GE who does more business overseas with our enemies than anyone pays no taxes. I can tell you the result of those hearings – NOTHING. The prospects of no campaign cash is the poison pill for most politicians zeal against any lucrative industry – especially oil & gas.
Give money to big oil, take money from the elderly, poor and powerless
Each of those companies pays taxes on the country where those moneys are earned. Just like Honda, Nissan, Shell, BP, Philips and many foreign companies pay taxes in the US of moneys made here.
Will we double tax our own companies who make profits over seas for the benefits of American investors, by forcing a double tax on their earnings, and make them less competetive? Or will we tell Honda and Mitsubishi and NewsCorp that since they are foreign companies, they should pay their taxes in their home country and not in the US where they make their money?