The failed vote on eliminating tax credits for Big Oil was not about gas prices.
The Congressional Research Service analysis of S. 940, the Close Big Oil Tax Loopholes Act, concluded that the bill would have a negligible effect on what consumers pay at the pump. But the American public wanted the repeal anyway – 74 percent were in favor of repealing subsidies for the big five oil industry majors. Despite this, Republican senators and three oil state Democrats decided that if the bill was not going to address gas prices, then it wasn’t worth passage – or at least that was their defense. Democrats and the two Republicans from Maine rose to support the bill in the name of deficit reduction and fairness – seemingly a win-win.
The bill would have eliminated $21 billion in tax credits for the big five – ExxonMobil, Chevron, Shell, ConocoPhillips and BP – over the next decade. The recouped billions were to be applied directly to deficit reduction. It is worth noting that this was part of a compromise to persuade Republicans to consider the repeal. The original intent was to invest the money in clean energy and alternative fuels – part of the president’s plan to address gas prices or oil dependency. During the floor debate on the bill Republicans steered clear of this point.
However they did engage in the question of fairness. Taking their cue from ConocoPhillips CEO, James Mulva, who at a recent hearing called the repeal “un-American”, Republicans accused bill proponents of looking to score cheap political points by demonizing the uber-profitable oil industry. Democrats dug into the meat of the bill by pointing out the loopholes they sought to close, namely, a provision that allows the oil industry to claim a manufacturing tax credit even though oil is extracted, not made, and a loosely drafted foreign tax credit that allows oil companies to claim lease payments to governments abroad as foreign income tax. Taken together, these two loopholes allow oil corporations to avoid paying $21 billion over the course of 10 years.
At the end of the day, the vote came down to party lines with a few exceptions.
Democrats who stepped over the line were Mary Landrieu (D-La.) , Mark Begich (D-Alaska) and Ben Nelson (D-Neb.). Republicans who voted to eliminate unnecessary tax perks for Big Oil were Susan Collins (R-Maine) and Olympia Snowe (R-Maine).
At the end of the day, Democrats lost the vote. Those who voted against the measure are now branded as oil industry lackeys. But the biggest losers of all are taxpayers, who will still see prices rise and services cut in the name of fiscal responsibility.
Who cracked open a bottle of champagne last night? Oil Industry top brass and the 633 lobbyists – employed in the first quarter of 2011 – that ensured another big victory for Big Oil at the expense of the American people.