How Oil Taxes Will Make A Mark On Campaigning

Mar 28, 2012
Originally published on March 30, 2012 1:14 pm
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From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.

In the Senate today, a familiar debate: Whether to end billions of dollars in tax breaks for the country's five biggest oil companies. Last year, Democrats failed to repeal those tax breaks and they fully expect to fail again. Still, senators from both parties have been eager to engage in the issue.

As NPR's David Welna reports, each side expects a payoff in November.

DAVID WELNA, BYLINE: As debate got under way on repealing tax breaks for oil companies, majority leader Harry Reid stated a premise he and his fellow Democrats plan to campaign on this year in their bid to keep Republicans from taking over the Senate.

SENATOR HARRY REID: Senate Republicans would never ever side with American taxpayers against Big Oil.

WELNA: New Jersey Democrat Bob Menendez, who faces voters this fall, is the lead sponsor of the oil subsidies repeal. The budget that House Republican Paul Ryan proposed and Mitt Romney endorsed, he says, cuts as much money for educating children with disabilities as it gives to the oil companies.

SENATOR BOB MENENDEZ: Tell these children under the Romney-Ryan budget they cannot be helped to fulfill their God-given potential because we just can't afford it. But we can afford to give these five companies, who made $137 billion in profits, that we should give them an additional $24 billion of our taxpayers' money.

WELNA: But according to Senate Republican Leader Mitch McConnell, the American people really care about one fact - that gas prices have doubled during the Obama administration.

SENATOR MITCH MCCONNELL: And I'm starting to wonder if this might as well be the Democrats' official slogan: Vote for us and we'll make things worse.

WELNA: As for the oil companies' tax breaks, Kentucky Republican Rand Paul makes no apologies. We, as a society, he declared on the Senate floor, need to glorify those who make a profit.

SENATOR RAND PAUL: Instead of punishing them, you should want to encourage them. I would think you would want to say to the oil companies, what obstacles are there to you making more money?

WELNA: And Jon Kyl, the Senate's number two Republican, issued this warning.

SENATOR JON KYL: Everybody talks about reducing the price of gas at the pump and reducing U.S. dependence. What these tax increases would do is to further that dependence and increase the prices at the pump.

WELNA: Democrats call that argument Republican snake oil. Economists tend to agree. Severin Borenstein co-directs the Energy Institute at U.C. Berkeley's Haas School of Business.

PROFESSOR SEVERIN BORENSTEIN: Removing the tax incentives might have a very tiny effect on incentive of oil companies to drill a couple of new wells. But even in the context of U.S. production it would be so small, it would have no effect.

WELNA: Republicans, nonetheless, plan to kill the bill repealing oil subsidies in a vote tomorrow morning.

David Welna, NPR News, the Capitol. Transcript provided by NPR, Copyright NPR.