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Senate Republicans block action on oil tax breaks

'How long do you have to give corporate welfare to oil companies?' asks Democrat Barbara Boxer. GOP senators in turn will push for an expansion of offshore drilling, a measure also likely to fail.

May 17, 2011|By Richard Simon, Los Angeles Times

Reporting from Washington — Senate Republicans on Tuesday blocked a Democratic effort to scale back oil industry tax breaks, underscoring the difficulty of getting Congress to agree to any significant measures aimed at bringing down gas prices.

All but two Republicans — along with three Democrats — voted against bringing the repeal measure up for debate, even though the $2 billion a year in additional tax revenue from five major oil companies would have been steered into reducing the federal budget deficit, a Republican priority.

"This bill is just pure political demagoguery," said Sen. David Vitter, a Republican from oil-producing Louisiana. Democrat Mary L. Landrieu, also from Louisiana, added, "It might make us feel better to beat up on Big Oil … but it will not lower prices at the pump."

"Excuse me if I don't cry for Exxon," Sen. Barbara Boxer (D-Calif.) said. "How long do you have to give corporate welfare to oil companies?" Boxer was joined by fellow California Democrat Dianne Feinstein in voting to take up the tax repeal.

The 52-48 vote, short of the 60 needed to advance the measure, came as gas prices have moved center stage on Capitol Hill.

Democratic senators also called for an investigation into whether U.S. refiners were cutting back on gasoline production to keep prices high.

An industry group dismissed the request as political theater. Jon Leibowitz, chairman of the Federal Trade Commission, said the agency was "always on the lookout for potential price-fixing" and pledged to "take action whenever we find wrongdoing."

Republican senators, meanwhile, will push Wednesday to expand offshore oil drilling. That too is expected to fail.

After losing in their bid to scale back the industry tax breaks, Democrats pledged to continue to press the issue during negotiations on a broad deficit-reduction plan.

The Close Big Oil Tax Loopholes Act was supported by the Obama administration.

The oil and gas industries receive $16 billion a year in federal subsidies, according to the watchdog Taxpayers for Common Sense. The bill targeted about $2 billion a year in tax breaks to Exxon Mobil, Chevron, Shell, ConocoPhillips and BP.

The push to scale back the tax breaks comes as 31% of those surveyed in a recent Pew Research Center/Washington Post poll blamed greed, speculation or a push for higher profits among oil companies for the recent gas price increases.

The nonpartisan Congressional Research Service said that scaling back the tax breaks would have a negligible effect on pump prices.

Republicans contend that the tax breaks are necessary to encourage domestic production. The repeal effort also was opposed by the oil and gas industries, which contributed more than $21 million to House and Senate candidates — about three-fourths of which went to Republicans — in the last election cycle, according to the nonpartisan Center for Responsive Politics.

Landrieu, Mark Begich of Alaska and Ben Nelson of Nebraska were the Democrats who cast "no" votes. Maine Sens. Susan Collins and Olympia J. Snowe were the only Republicans to vote to take up the measure.

richard.simon@latimes.com

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