Senate Democrats are pushing hard on ending tax breaks for oil companies, linking the issue to the deficit and high gas prices, which have boosted profits in the industry to new heights.
In a floor speech on Tuesday, Majority Leader Harry Reid (D-NV) said the Senate would target $4 billion in benefits for oil companies with the intention of using the savings to help address the nation’s growing debt.
“If we’re serious about reducing the deficit, this is an easy place to start,” Reid said. “It’s a no-brainer. Let’s use the savings from these taxpayer giveaways to drive down the deficit, not drive up oil company profits.”Democrats had already made attacks on tax breaks for oil companies a central part of their political strategy going into budget talks given the unpopularity of the industry amid high gas prices, but they have stepped up their rhetoric even further since Speaker John Boehner (R-OH) suggested in an interview last month that he might be open to ending the subsidies as part of a deficit reduction plan. Republican leaders have since indicated that they likely would not support getting rid the tax breaks as a standalone measure, but as part of a broader tax reform deal that lowered corporate rates.
Bolstering Reid’s morning speech, a group of Senate Democrats including Bob Menendez, (D-NJ), Claire McCaskill (D-MO), and Sherrod Brown (D-OH), and Jon Tester (D-MT). held a press conference on Tuesday to debut the “Close Big Oil Tax Loopholes Act,” which would end subsidies to the five largest oil companies. All four face competitive re-election contests next year.
“There is more hot air around this building about deficit reduction than any other topic right now,” McCaskill said at the event. “If we cannot end subsidies to the five biggest most profitable corporations in the history of the planet that come from the federal taxpayer, than I don’t think anyone should be talking about deficit reduction.”
“It’s bad enough that Ohioans have to pay more than $4.00 a gallon at the gas pump. They shouldn’t need to subsidize the oil industry through the tax code as well,” Sen. Sherrod Brown (D-OH) said in a statement.
Democrats will get another crack at big oil on Thursday, when Sen. Max Baucus (D-MT) holds a Finance Committee hearing on ending industry incentives.