Democrats' deficit-cutting plan: Big Oil subsidies the first target
Senate Democrats on Tuesday began enumerating ways to cut the US budget deficit. Tax breaks for oil and gas companies topped their list, as they challenged Republicans to whittle 'subsidies.'
Senate Democrats launched an assault on tax breaks for Big Oil on Tuesday in what has become a ritual in a closely divided Congress. But this time the target isn’t just Big Oil but also big deficits.Skip to next paragraph
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The targeted tax breaks for the top five oil companies – Exxon Mobil Corp., Royal Dutch Shell, BP, Chevron Corp., and Conoco Phillips – account for about $21 billion in taxpayer subsidies over 10 years, or $2 billion a year. The billions that Democrats expect the US government to recoup by zeroing out various tax breaks would go to relieving the nation’s budgetary shortfall.
“If we cannot end subsidies to the five biggest, most profitable corporations in the history of the planet, that come from the federal taxpayers, then I don't think anyone should take us seriously about deficit reduction,” said Sen. Claire McCaskill (D) of Missouri at a briefing with reporters on Tuesday. Other sponsors include Sen. Robert Menendez (D) of New Jersey and Sen. Sherrod Brown (D) of Ohio. All are up for reelection in 2012.
Sen. Max Baucus (D) of Montana, who chairs the Senate Finance Committee, is also developing legislation to trim tax breaks for oil companies, but he plans to redirect the taxpayer savings to encourage clean-energy sources.
"These oil companies made $36 billion in profits during the first quarter of this year,” said Senate majority leader Harry Reid in a floor speech on Tuesday. “And yet the US government has given these companies billions of dollars in corporate welfare every year. If we’re serious about reducing the deficit, what an easy place to start.”
House Speaker John Boehner (R) laid down a marker in negotiations with Senate Democrats and the White House on Monday when he called for trillions in spending cuts to accompany any vote to raise the national debt limit – now set to expire in mid-May, forcing a default by Aug. 2 unless Congress acts. Mr. Boehner says everything is on the table toward meeting that target, except tax increases.