House Democrats Target $40 Billion in ‘Big Oil’ BreaksJim Snyder
U.S. House Democrats are seeking to end tax breaks for oil companies such as Exxon Mobil Corp. and BP Plc valued at $40 billion for five years to fund initiatives including clean-energy programs.
Representatives Edward Markey of Massachusetts, top Democrat on the House Natural Resources Committee, and Earl Blumenauer of Oregon led Democrats in introducing the “Ending Big Oil Tax Subsidies Act” today in Washington. Subsidies undermine investment in cleaner sources of energy, increase the deficit and weaken U.S. energy security, the Democrats said.
“It’s certainly no longer necessary to simply fatten the bottom lines of five of the most profitable corporations the world has even known,” Blumenauer said at a news conference.
The bill, which needs support from Republicans who run the House, would repeal 10 tax breaks and subsidies, targeting the largest producers. It would rescind a tax break for domestic manufacturing, a credit to spur production of “marginal” wells and a policy that credits companies for taxes they pay overseas.
“Singling out the oil and natural gas industry through tax increases is bad public policy,” said Eric Wohlschlegel, a spokesman for the American Petroleum Institute in Washington, the largest oil and gas company trade group. “It would actually discourage new energy projects and new hiring in one of the nation’s most dependable job-creating industries.”
Senator Jeff Bingaman, a New Mexico Democrat and chairman of the Senate Energy and Natural Resources Committee, said on Jan. 31 that ending oil-industry tax breaks failed to win support in the past two year in Congress. “I would be surprised if it got a great deal of traction” this time, he said.
Senator Mary Landrieu, a Louisiana Democrat, told Bloomberg Businessweek that taking away oil and gas subsidies would be “counterproductive” given the jobs the industry supports.
The proposed cuts in subsidies are based on reductions that President Barack Obama has already sought from Congress and has failed to push through. The president said he would try again in his State of the Union address on Jan. 25.
The House Democrats’ push comes as Republicans seek to cut $100 billion in spending this fiscal year. Party leaders proposed yesterday to end funds for the public service AmeriCorps, the Corporation for Public Broadcasting among 60 programs.
Representative Jim Moran, a Virginia Democrat, said the tax break for oil companies is a $40 billion grant so they “can maintain what are essentially obscene profits.”
Markey said oil companies should “pay their fair share.”
Exxon had the biggest quarterly profit in more than two years in the final three months of last year, the company said on Jan. 31. Profit rose 52 percent to $9.25 billion.
Oil and gas companies gave more than $25 million to congressional candidates for the 2010 election, with 77 percent, or $18.9 million, sent to Republicans, according to the Center for Responsive Politics, a Washington-based group that tracks the financing of campaigns. The money comes from political action committees and oil and gas executives and employees.
Exxon, the second-largest contributor behind Koch Industries Inc., gave more than $1.3 million to federal candidates, about 87 percent to Republicans.
Houston-based Exxon paid $63 billion in taxes from 2005 to 2009, about $19 billion more than it earned in the U.S. during that period, according to a company blog written by Ken Cohen, Exxon’s vice president for public and government affairs.
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.
- In One Tweet, Kylie Jenner Wiped Out $1.3 Billion of Snap’s Market Value
- U.S. Companies Abandon the NRA as Boycott Call Grows
- China Regulator Seizes Anbang, Chairman Faces Fraud Prosecution
- The Two Words That Will Help Get an Airline Upgrade Over the Phone
- Prime-Age Men May Never Return to U.S. Workforce, Fed Paper Says