Senate prevents repeal of Big Oil tax breaks
A move by Democrats to repeal billions of dollars in tax breaks enjoyed by the biggest oil companies operating in the U.S. was blocked by the Senate.
Tue, May 17, 2011 at 08:14 PM
NOT OVER YET: Before the widely expected outcome, Majority Leader Harry Reid said the issue would be included in an upcoming budget deal. (Photo: ZUMA Press)
WASHINGTON, D.C. - The Senate blocked a move by Democrats to repeal billions of dollars in tax breaks enjoyed by the biggest oil companies operating in the United States, but Majority Leader Harry Reid said that paring back the incentives would be included in an upcoming budget deal.
Democratic sponsors of the bill, which would have used the savings from ending the tax breaks to pay down $21 billion of the deficit in ten years, got only 52 of the 60 votes needed to proceed on the measure on Tuesday. The bill would have cut back tax breaks enjoyed by Exxon Mobil Corp, Chevron ConocoPhillips, BP and Shell Oil, the U.S. unit of Royal Dutch Shell.
Before the widely expected outcome, Reid said the issue would be included in a budget deal. "I am confident before we finish our budget negotiations here in anticipation of raising the debt ceiling that will be part of it," Reid told reporters earlier on Tuesday.
Vice President Joe Biden is steering a deal between Democrats and Republicans to increase the debt limit and pare back spending that lawmakers hope reach before August 2.
Reducing the tax breaks that the companies have enjoyed for decades has long been a goal of President Barack Obama and his fellow Democrats. The call to do so has gotten louder ahead of next year's elections and as the big five oil companies made about $36 billion in profits during the first quarter of the year as oil prices rose to about $100 a barrel.
"The administration believes that, at a time when it is working with the Congress on proposals to reduce federal deficits, the nation cannot afford to maintain these wasteful subsidies," the White House said earlier on Tuesday.
On Wednesday Republicans in the Senate are expected to push a bill to open up offshore oil drilling, which they say has been locked up by Obama regulations after last year's BP oil spill in the Gulf of Mexico. But the measure faces an uphill battle in the Democratic-led Senate.
Environmentalists blasted Tuesday's outcome in the Senate.
"The Senate today had the chance to do right by American taxpayers," Frances Beinecke, the president of the Natural Resources Defense Council, said in a release.
"Instead, pressured by oil industry lobbyists and a misguided Republican leadership, it decided to continue to give tax breaks to highly profitable Big Oil companies that don't need any taxpayer incentives."
(Additional reporting by Richard Cowan and Ayesha Rascoe; Editing by John Picinich and Alden Bentley)
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