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Administration Urged to Repeal Tax Breaks in Deficit-Cutting Deal

A coalition of 20 Senate Democrats has called on Vice President Joe Biden to make sure a provision stripping major oil and natural gas producers of an estimated $21 billion in tax breaks over the next decade is included in any deficit-reduction package negotiated with Republicans.

The coalition led by Sen. Robert Menendez (D-NJ) made the request in a letter sent Tuesday to Biden, who is representing the administration in efforts to reach a deficit-cutting deal with Republicans, The Hill reported.

"As you work to forge an agreement between the parties to reduce the deficit, we urge you to ensure that the agreement include an end to the billions of dollars in subsidies that oil companies receive," the coalition said.

On May 17 "a majority of the Senate voted for legislation to close these loopholes for the Big Five oil companies, and this mandate cannot be ignored," the group told the vice president. While 52 senators, including three Republicans, voted for the bill to repeal the tax breaks, the measure was blocked because the majority failed to get the 60 votes needed to advance the bill (see Daily GPI, May 19).

The bill, sponsored by Menendez, sought to revoke the tax breaks for Chevron, BP, Royal Dutch Shell, ConocoPhillips and ExxonMobil. Following the bill's defeat, Senate Majority Leader Harry Reid (D-NV) said he expected the legislation to resurface.

"Over the last decade, the Big Five oil companies have raked in nearly $1 trillion in profits and tens of billions of dollars in taxpayer subsidies. Since 2005, these companies have spent over seven times more on stock buybacks and dividends than they have on oil exploration or efforts to reduce gasoline prices," the Democratic coalition said.

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