Thursday, February 10, 2011

Senate Democratic leaders echo Obama’s oil tax call

As US House Republicans tried to find $32 billion in spending cuts, Senate Majority Leader Harry M. Reid (D-Nev.) and nine other Democrats from that side of the Capitol suggested ending what they called “giveaways to oil companies” to save at least $20 billion over 10 years.

Majority Whip Richard J. Durbin (Ill.), Policy Committee Chairman Charles E. Schumer (NY), Democratic Conference Secretary Patty Murray (Wash.) and Sens. Bill Nelson (Fla.), Robert Menendez (NJ), Benjamin L. Cardin (Md.), Sherrod Brown (Ohio), Sheldon Whitehouse (RI), and Kirsten Gillibrand joined Reid in making the suggestion to House Speaker John A. Boehner (R-Ohio) in a Feb. 8 letter. President Barack Obama is expected to call for elimination of the percentage depletion allowance, drilling cost expensing, and other oil and gas production incentives, along with the manufacturers’ tax exemption for the oil and gas industry, when he submits his fiscal 2012 budget request to Congress on Feb. 14.

“There is broad, bipartisan agreement on the need to rein in spending, make government more efficient and bring down the deficit,” the senators wrote. “We believe that the question before us is not whether we should do any cutting, but what exactly should be cut. So, as you consider spending-cut ideas for the remainder of this fiscal year, we ask that you focus on cutting programs that are wasteful and inefficient, as opposed to those that help create jobs and spur economic growth.

“We are concerned that some of the cuts you may propose could undermine future growth just as our economy is beginning to recover. Instead, we urge you to consider ending a number of tax loopholes and other subsidies that benefit big oil and gas companies,” they told Boehner. “Closing these loopholes would save the federal government more than $20 billion over 10 years. This is just one example of a wasteful item in the budget that could be cut in order to make a down payment toward reducing the nation’s deficit. If the House chooses to adopt this suggestion, it would represent a good first step towards cutting spending in a bipartisan way.”

The 10 Senate Democrats, who did not include Energy and Natural Resources Committee Chairman Jeff Bingaman (NM), said that ExxonMobil Corp.’s 53% higher fourth quarter earnings and Chevron Corp.’s 72% year-to-year improvement for the period show that “oil and gas companies are doing just fine while many Americans are still struggling to find work and support their families.

“The days of big oil companies making billions in record breaking profits while receiving billions in taxpayer-financed subsidies must end. It defies common sense to cut programs that are creating jobs, helping jumpstart our manufacturing sector and strengthening the middle class while protecting taxpayer-funded handouts to big oil companies that add little to our economic or energy security,” they maintained. “During these tough economic times, closing more than $20 billion in loopholes for big oil and gas companies would send a clear message that we can cut spending while protecting the middle class.”

Boehner did not formally respond, but he apparently does not plan to take the suggestion seriously. Independent producers, stripper well owners, refiners and others do because they would suffer significantly if the repeals find their way into the final fiscal 2012 federal budget.


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