U.S. bill ending oil company tax cuts clears Senate hurdle

Mon Mar 26, 2012 7:03pm EDT

* Bill would end tax breaks for biggest oil firms

* Republicans oppose bill, but want debate on issue

* White House said it supports the measure

By Ayesha Rascoe and Richard Cowan

WASHINGTON, March 26 (Reuters) - Legislation repealing tax breaks for major oil companies passed its first hurdle i n the Senate on Mo nday, but is unlikely to become law, as Republicans and Democrats seek to score political points over rising gasoline prices.

The Senate voted 92 to 4 to proceed with consideration on the bill that would eliminate billions of dollars in tax breaks for the "big five" oil companies: Exxon Mobil Corp, BP Plc, ConocoPhillips, Chevron Corp and Royal Dutch Shell Plc.

The Senate vote came amid increasing nervousness among U.S. politicians - from President Barack Obama to members of Congress running for re-election on Nov. 6 - over possible voter backlash from rising energy costs. U.S. gasoline prices jumped more than a nickel to average $3.92 a gallon in the past week, a record high for March. Voter anger over surging fuel costs has sent lawmakers scrambling to respond to consumers' energy woes.

But the legislation now up for debate in the Senate would not bring down those rising prices - one of the few points Democrats and Republicans appeared to agree upon.

The debate over U.S. energy policy has fallen mostly along partisan lines, with Democrats stressing the need to end tax breaks for oil companies and invest in alternative energy sources, while Republicans press for more domestic oil and gas drilling.

The lopsided vote in favor of moving ahead with consideration of the oil tax cuts bill reflected political maneuvering in the chamber, not actual support for the measure.

Both Democrats and Republicans think they will score points with voters by staging a Senate debate on tax breaks for the major oil companies - knowing that legislation ending these breaks will not clear the Republican-controlled House of Representatives.

Republicans overwhelmingly supported going forward with weighing the legislation, but only to air their grievances with the measure and to make their own separate case for addressing high gasoline prices.

CORPORATE WELFARE

Sponsored by Democratic Senator Robert Menendez, the legislation would save an estimated $24 billion over 10 years, with the savings going toward extending renewable energy tax credits and reducing the deficit.

With only about seven months before the Nov. 6 presidential and congressional elections, Democrats are hoping to spend time highlighting Big Oil's "taxpayer-funded subsidies," as a Democratic aide portrayed them. These subsidies, the aide added, come amid rising gasoline prices that further contribute to strong oil company profits.

"It's time to end this wasteful corporate welfare," Senate Majority Leader Harry Reid said in speech on Senate floor.

The White House issued a statement in support of the Menendez bill o n M onday. The Obama administration has repeatedly called for an end to tax breaks for oil companies, without success.

"This is the Democrat response to high gas prices," Senate Republican leader Mitch McConnell countered. "Frankly, I can't think of a better way to illustrate how completely out of touch they are on this issue."

Republicans, like the oil companies, think that with retail gasoline prices rapidly rising, now is not the time to saddle industry with higher taxes. "There's no evidence to show that raising a tax is going to lower gas prices," a senior Republican aide said.

The tax breaks also exist against a background of chronically high government budget deficits. Many Democrats, including President Barack Obama, argue that the wealthy should do more to help reduce those deficits by taking on a bigger tax liability.

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Comments (4)
LittleStream wrote:
So you are saying that Congress
“Republicans and Democrats seek to score political points over rising gasoline prices.”

So raising gas prices are not so much an issue of other countries oil as our own companies wanting to retain their undeserved and unneeded tax breaks – you want definition of entitlement – here it is boys!

Thinks that “eliminate billions of dollars in tax breaks for the “big five” oil companies: Exxon Mobil Corp, BP Plc, ConocoPhillips, Chevron Corp and Royal Dutch Shell Plc.” Everyone should sell their stocks in these companies and write to their Congressmen about ending the tax breaks.

Too bad Congress isn’t more worried about getting re-elected if they leave the tax breaks in place.

Mar 26, 2012 7:35pm EDT  --  Report as abuse
NewsDebbie wrote:
While I think giving anything to big oil is a big bad idea this bill will never pass the GOP controlled house. Once again the score is:
The People 0 Big $$/Corporations 10 Congress 0

Mar 26, 2012 7:44pm EDT  --  Report as abuse
NVresident wrote:
Let’s be clear, the rebates fought so hard for go to Republican based industries in Republican based states. While we don’t get to see donation lists in some of the largest super paks you can be sure that a a fair tithing will be returned to keep the political favors coming.

If you are comfortable with that type of reciprocal arrangement and you support Romney, then you can count on a similar relationship of closed door favors with the White House having a direct deposit arrangement to the Mormon church.

Mar 26, 2012 9:05pm EDT  --  Report as abuse
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