Senate votes to debate bill that would kill oil tax breaks

03 27, 2012 by POLITICO

As promised, Senate Republicans gave the green light Monday to debating a Democratic bill that would repeal billions in oil industry tax incentives — the latest twist in the parties’ struggle to seize the high ground on gasoline prices.

The 92-4 cloture vote allowing the Senate to proceed to the bill belies the fact that the legislation itself is doomed: In all likelihood, it ultimately won't get the 60 votes it needs to pass the Senate, and in any case it would be dead on arrival in the House.

The bill, by Sen. Robert Menendez (D-N.J.), would repeal five incentives worth about $2 billion annually for the five largest oil companies. Monday’s no votes came from Sens. Ben Nelson (D-Neb.), Mary Landrieu (D-La.), Mark Begich (D-Alaska) and Jim Inhofe (R-Okla.).

An initial parliamentary vote on a similar Democratic bill last May failed amid opposition from Republicans and from Nelson, Landrieu and Begich.

But this time, Republicans essentially called the Democrats’ bluff and voted for Monday's initial cloture vote, saying they welcome the opportunity to spend time on the Senate floor talking about gas prices.

"Today, Democrats will propose raising taxes on America's energy manufacturers, something common sense and basic economics tell us will lead to even higher prices at the pump," Senate GOP leader Mitch McConnell said ahead of the vote. "Frankly, I can't think of a better way to illustrate how completely and totally out of touch they are on this issue."

Majority Leader Harry Reid called tax incentives for profitable big oil companies "careless corporate welfare" and said Republicans were siding with the companies over consumers.

"Repealing wasteful subsidies, I repeat, won't cause oil and gas prices to rise, but reducing American dependence on foreign oil will cause prices to fall for sure," Reid said. He said "responsible" domestic oil and gas production and investments in clean energy technologies will reduce U.S. dependence on foreign oil.

The Menendez bill would redirect the money saved from ending the tax incentives, using it to reduce the budget deficit and extend expired and expiring tax incentives for renewable energy and energy efficiency.

The White House issued a statement supporting the bill, saying that "money can be better spent promoting domestic manufacturing, encouraging the development of clean energy technologies that will reduce our dependence on oil, and cutting the deficit."

McConnell said Republicans will tout their solutions.

"We're going to use this opportunity to explain how out of touch Democrats are on high gas prices, and put a spotlight on the common-sense ideas Republicans have been urging for years," he said. Republicans have criticized President Barack Obama for not authorizing the Keystone XL pipeline and for not allowing enough additional areas for oil and gas production.

The most likely scenario this week, according to a Reid aide, is that the Senate on Tuesday will vote on the actual motion to proceed to the bill. That shouldn't have trouble getting the necessary majority support. The Senate would then be expected to defeat an attempt to limit debate on proceeding to a separate postal reform bill — which Reid also filed cloture on last week — in order to stay on the Menendez bill, the aide said.

Reid will then file cloture on the underlying Menendez bill. That is the 60-vote hurdle — probably ripening Thursday — that Republicans are expected to go against, finally sinking the overall bill.

"Upshot is we'll be on it through at least until Thursday morning," the Reid aide said, adding: "Republicans are being cute with this but they can’t be cute to the point of actually cutting off debate" on the actual bill.

Begich said the Senate was wasting time.

"We should have a real energy debate, not this show and tell for campaigning purposes," Begich told reporters afterward. "This is the third act of the same play. It has the same outcome every time. ... 'Cause in two days, we'll have this exact same vote. Everyone on the Republican side who voted for this cloture will vote against cloture and we will have wasted 2½ days doing nothing on real energy policy in this country, and people are still going to be paying higher gasoline prices."