McCaskill, Blunt at odds over impact of Big Oil tax breaks
WASHINGTON — Gas prices, Big Oil subsidies, budget deficits and energy “tax hikes” were the politically charged themes Thursday as Senate Democrats and Republicans clashed with sharply contrasting views on an unsuccessful effort to rescind tax breaks for the largest oil firms.
Despite a last-minute appeal by President Barack Obama for Congress to end the tax breaks, Senate Republicans — including U.S. Sen. Roy Blunt, R-Mo. — blocked the bill, which would have diverted some revenue to alternative energy. The 51-47 procedural vote fell short of the 60 votes needed to move forward.
After the vote, Sen. Claire McCaskill, D-Mo., lashed out at GOP senators for blocking what she described as an effort to end “tax giveaways for the most profitable companies in the history of the world.” She said “economic fairness” dictated that profitable oil firms be led away from “the taxpayer trough.” (Click here to watch McCaskill's speech.)
Shortly before the vote, Obama appealed to senators to end Big Oil's breaks because “it’s time they got by without more help from taxpayers who are already having a tough enough time paying the bills and filling up their gas tank.” The subsidies cost the government about $4 billion a year, Democrats said.
The bill, sponsored by Sen. Robert Menendez, D-N.J., would have reduced tax breaks for the five biggest oil firms: Exxon Mobil Corp, BP Plc, ConocoPhillips, Chevron Corp and Royal Dutch Shell Plc. Asserting that the companies produced less oil in 2011 than they had the previous year, Menendez argued that “they took your money and they didn't produce a drop more of oil.”
But Blunt, the fifth-ranking Senate Republican, and other GOP senators said that ending the tax breaks would raise costs for the biggest energy producers at a time when more U.S. energy production is needed. In fact, Blunt contended that oil companies would likely pass along the costs to energy consumers. (Click here to watch Blunt's speech earlier this week.)
“Instead of working to relieve pain at the pump, President Obama and the Democrat-led Senate are pushing for tax hikes that would be passed along to consumers — tax hikes they admit will do nothing to lower fuel costs,” said Blunt.
“The shortest path to more American jobs is more American energy. If we want to lower costs for consumers and spur economic opportunities nationwide, we need to work together on an ‘all-of-the-above’ energy plan.”
McCaskill took issue with GOP arguments that eliminating the tax breaks could lead oil firms to hike prices. She asserted that “contrary to the claims that some are making, repealing these subsidies would not raise gas prices.”
McCaskill said the tax breaks for Big Oil, if maintained, are projected to amount to more than $40 billion over a decade. In the last decade, the biggest oil firms have reported more than $1 trillion in profits, she said, and last year they spent $38 billion boosting their share prices through stock buybacks.
But Senate Republican Leader Mitch McConnell, R-Ky., said Democrats were picking a fight over a bill that did not address the pressing issue of how to lower gas prices. “Is this the best we have to offer folks who are staring at $4 a gallon gasoline?” McConnell challenged Democratic senators. “A bill that even Democrats admit won’t do anything to lower the price of gas?”
Blunt told reporters Thursday that, in his view, the Democrats who backed the bill voted to “eliminate the incentives to produce energy domestically, and raise taxes on energy companies — particularly, gasoline and diesel-producing companies.”
Echoing McConnell, Blunt questioned taking up such a bill “at a time when the president’s policies clearly are producing the wrong results on energy. Every group I’ve talked to this week — whether it’s the grocers, the restaurant manufacturers or transportation people — all have significant problems because of energy” costs.
Republicans said eliminating the oil tax breaks would not make much of a dent in the federal deficit, but McCaskill contended that GOP senators were bowing to “special interests” in defending what she termed as subsidies to big oil companies.
“How seriously can we take anybody who talks about debt reduction, if they’re not willing to pluck the low-hanging fruit of subsidies” to Big Oil, McCaskill said. “We’re borrowing money to prop up already wildly profitable corporations. If this was a fairy tale that I was reading to my grandsons, they would say that this obviously is fiction because this couldn’t be true.”