Senate rejects move to end tax subsidies for oil companies

03 29, 2012 by The Times-Picayune

The Senate voted 51-47 on Thursday to block a vote on legislation that would end billions of dollars in tax subsidies for the five biggest oil companies. It was mostly a party-line vote, with the GOP leading the opposition, though four Democrats, including Sen. Mary Landrieu of Louisiana, joined the opposition.

Democrats, led by Sen. Robert Menendez, D-N.J. said with gasoline selling at nearly $4 a gallon the companies no longer need tax subsidies to persuade them to engage in domestic drilling.

But Landrieu and others said it is a mistake to target one industry that, despite all the anti oil company rhetoric, only gets about 13 percent of energy subsidies.

"We spend about $16.6 billion on U.S. energy subsidies over the course of one year on everything, and renewables, refined coal, nuclear, and others accounted for more than 85 percent of the subsidies," Landrieu said.

Sen. David Vitter, R-La., also fought the proposal to trim subsidies, though he joined with other Republicans to encourage the measure to be debated. The GOP believed the issue was a favorable one for Republicans, though Democrats say the public believes the highly profitable oil and gas industry doesn't need or deserve subsidies.

Vitter said that the proposal to raise oil industry taxes would increase the already high prices Americans are paying for each gallon of gas.

"Look, we can love the oil companies, we can hate the oil companies, but the Menendez bill increases taxes on U.S. energy companies and on U.S. energy production," Vitter said. "It increases taxes on those folks and on that activity. What do we think is going to be the result of that in terms of the price at the pump? The American people know."

Landrieu said she regretted that all sides on the issues were playing politics rather than engaging in a bipartisan pursuit of a sound energy policy - one that allows more domestic drilling and encourages alternative energy sources.

Landrieu said she favors more drilling than many of her Democratic colleagues and objects strongly when the industry is made a scapegoat. But she said the GOP is going overboard with its calls to open vast new areas for drilling, even in places where local GOP officials oppose it, and continuously putting all the blame for higher gas prices on President Barack Obama and his administration.

"We don't have to drill everywhere," Landrieu said on the Senate floor Tuesday night. "The resources are so spectacularly promising. I don't know if my friends on the other side remember who the president was when the governor of Florida, Jeb Bush, a Republican, opposed drilling off the eastern gulf. The president at the time, his brother, George Bush, honored that no drilling pledge."

"I remind my friends on the other side that their party is not blameless in this debate. They could do a lot better for the country if they would stop trying to throw President Obama under the bus every minute --although I don't agree with all his energy policies."
Before the vote, President Obama urged the Senate to end oil and gas tax subsidies.

"With record profits and rising production, I'm not worried about the big oil companies," Obama said. "I think it's time they got by without more help from taxpayers, who are having a tough enough time paying their bills and filling up their tanks."