WASHINGTON Senate Democrats on Wednesday introduced a bill to eliminate billions of dollars in tax benefits enjoyed by big oil and gas companies, one day after President Barack Obama renewed his call for plugging tax loopholes in his State of the Union address.
Obama and fellow Democrats for years have targeted oil and gas tax breaks, a move that Republicans and some Democrats from oil-producing states fiercely oppose.
The measure focuses on provisions such as immediate expensing for drilling costs and the use of a tax break for manufacturing.
A bill to end these benefits died in the Democratic-controlled Senate last year, with four Democrats voting to block it. This year's plan is unlikely to move forward in the Republican-controlled House of Representatives.
Sponsored by Senate Democrat Robert Menendez of New Jersey and with more than a dozen co-sponsors, the bill would curb breaks used by the "big five" oil companies: Exxon Mobil Corp, BP Plc, ConocoPhillips, Chevron Corp and Royal Dutch Shell Plc.
Ending the breaks would raise $24 billion over a decade to help reduce the federal deficit, its backers say. Some Democrats want to use money to stave off $85 billion in automatic spending cuts set to kick in on March 1.
"The industry is often thrown out there as a short-term revenue grab," Brian Johnson, a tax adviser for the American Petroleum Institute, said this week. "You will get revenue in the short-term. But the long-term economic consequences are a dramatic loss of revenue from our industry."
(Additional reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Xavier Briand)