In it, but not of it. TPM DC

GOP Closes Ranks Around Continuing Oil Subsidies

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Both senators, and several others in the GOP, have publicly opposed the subsidies in recent years. Kirk voted as a member of the House to rescind most of them. But the Democrats have put the issue at the forefront of a broader debate about reducing long-term deficits and debt, to squeeze Republicans who have pledged not to raise taxes in legislation to increase the debt limit.

And so the GOP is closing ranks.

Ahead of Tuesday's vote, and to further wedge Republicans, Democrats are ratcheting up their campaign against the biggest companies in the industry. As gas prices have climbed and oil company profits soar, Democrats have been arguing that the tax subsidies should be repealed. Most of them now acknowledge that repealing the handouts won't impact fuel prices and instead have framed the issue on populists grounds as one of national priorities: if the government's most pressing issue this year is to reduce the deficit and spending, then gifts to major oil companies should be at the top of the list of things to cut.

On Tuesday, Democratic leaders in the Senate took this a step further, raising the question of whether oil refiners -- and particularly the big oil companies in the refining business -- have been engaging in collusive behavior.

"We write today to request the Commission begin an investigation into potential price fixing of gasoline by U.S. refiners," reads a letter from Senate Democrats to the chairman of the Federal Trade Commission. "Recent reports have indicated that U.S. refiners are cutting back on U.S. gasoline stockpiles in order to artificially keep prices high and inflate their bottom line."

At a press conference with Sen. Claire McCaskill (D-MO) Tuesday morning, Sen. Chuck Schumer (D-NY) made clear who the real targets are. "Who are the biggest players in refining?" Schumer asked. "Exxon, Chevron...."

Schumer insisted that Democrats will continue to push this issue after the tax subsidy bill fails in the Senate tonight.

"Our proposal for deficit reduction will include the elimination of these subsidies," he said.

About The Author

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Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight and the debt limit fight. He can be reached at brian@talkingpointsmemo.com