March 26 (Bloomberg) -- The U.S. Senate agreed to take up legislation that would repeal oil-industry tax breaks, a signal that both political parties see an advantage in debating energy policy amid rising gasoline prices.
The 92-4 procedural vote today lets lawmakers consider the measure this week. The legislation introduced by Democrats is unlikely to garner the 60 members needed for passage in the Senate.
Republicans said eliminating tax breaks for oil companies, such as Exxon Mobil Corp. and Chevron Corp. would hurt the U.S. economy by encouraging producers to drill overseas and raising consumer prices. The lawmakers sought to link the proposal with President Barack Obama, whose 2013 budget proposes repealing oil industry breaks.
“Raising taxes will, in fact, translate into higher prices,” Senator John Cornyn, a Texas Republican, said today during debate.
Democrats said U.S. oil companies are profiting from high gasoline prices and can afford to pay more.
“The American people are sick and tired of paying ridiculously high gasoline prices at the pump and then paying Big Oil again with our collective taxpayer subsidies,” said Senator Robert Menendez, a New Jersey Democrat who introduced the bill.
The legislation would limit or repeal tax breaks for the largest oil companies operating in the U.S. The revenue would be used to pay to extend credits for alternative fuels and energy efficiency and to reduce the federal deficit.
Menendez’s bill would increase revenue by $24 billion over 10 years. Some of the funds would help to extend conservation and clean-energy tax breaks costing $11.7 billion over that period, according to the Joint Committee on Taxation. The difference would help reduce the federal deficit.
The Senate rejected a similar proposal from Menendez last May. Republicans sided with the oil industry last year to defeat the measure.
“Some bad ideas never seem to go away,” Stephen Comstock, tax policy manager for the American Petroleum Institute, an industry-backed trade association, said today in a conference call with reporters.
“We’ve been giving tax breaks to the oil industry for decades, and what have we gotten in return?” Peter Lehner, executive director for the New York-based Natural Resources Defense Council, said in a statement. “Gas prices that keep going up and an oil industry monopoly on our transportation system.”
Gasoline on average cost about $3.897 yesterday, according to AAA’s daily fuel report. That price is about 5 cents higher than last week, and about 32 cents more than the cost of regular unleaded gasoline in March 2011.
The oil tax bill is S. 2204.
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