Dems Admit Bill Not Meant to Reduce Gas Prices
May 10, 2011
Posted by David Lungren David_Lungren@epw.senate.gov
"Sponsors Agree That Their Bill Would Have Little Impact on Soaring Prices" - "Bill Not Meant to Reduce Gas Prices" - "Won't Do Anything About Gas Prices Exceeding $4 a Gallon" - "Bill Likely to Fail"
Inhofe EPW News Roundup
AP: Menendez acknowledged that the legislation - slated for a vote next week - won't do anything about gas prices exceeding $4 a gallon in many places. - Republican opponents say the companies would simply raise prices if the measure became law. Menendez acknowledged that the legislation - slated for a vote next week - won't do anything about gas prices exceeding $4 a gallon in many places. The measure would also eliminate the so-called oil depletion allowance for the five oil companies. That allowance permits producers a tax deduction comparable to the break given manufacturers for depreciation of the value of an investment in plants and equipment. The other companies that would be affected by the legislation are BP, Chevron, and ConocoPhillips. "It's a shame that this industry hasn't been appreciated for all of the good that it does," Landrieu said.
Politico: Democrats will still have to answer the question of what they are proposing to do to address gas prices - Democrats will still have to answer the question of what they are proposing to do to address gas prices - despite the general consensus that there is little, if anything, lawmakers can do at least in the short term. "It is dishonest for any of us to say that there's some magic wand that can be waved and bring down gas prices, unless of course we want to have government price fixing, which I don't think any of us are interested in doing," McCaskill said.
The Hill: Bill Not Meant to Reduce Gas Prices - Sen. Claire McCaskill (D-Mo.), one of the most vulnerable Senate Democrats going into the 2012 election, said Tuesday she would not support a bill to cut tax breaks for the largest oil companies unless the savings from the plan go to deficit reduction. "I will not support the bill if it goes for any other purpose," she told reporters in the Capitol. McCaskill's comments underscore the growing sentiment among top Democrats that a bill to slash oil industry tax breaks is more politically viable if the savings are used for deficit reduction rather than for clean energy programs. The position puts McCaskill and a slew of other Democrats at odds with Senate Finance Committee Chairman Max Baucus (D-Mont.), who outlined a proposal late last month to eliminate tax breaks for the five largest oil companies and direct the savings to clean energy programs. [...] "If we can't remove subsidies from these profitable oil companies, then I don't know if we can ever get to the difficult work that lies ahead," McCaskill said. "This should be about the easiest step to take on deficit reduction," Brown of Ohio added. Asked whether he would oppose a bill that gives savings from the tax breaks repeal to clean energy programs, Brown said, "I would support any one of these bills, but I would prefer to do it this way." But the legislation faces an uphill battle in the Senate; two similar efforts failed in recent months with a handful of Democrats voting against the measures. Democrats are hoping that high gas prices and reports of soaring oil industry profits will turn the tides in their favor. The bill, Democrats stressed, is not meant to reduce gas prices. "Nobody has made the claim that this bill is about reducing gas prices," Sen. Robert Menendez (D-N.J.) said.
E&E News: "Sponsors Agree That Their Bill Would Have Little Impact on Soaring Prices" - A trio of Senate Democrats up for potentially tough re-election battles next year today floated a new measure that would end a suite of federal tax breaks for the five largest oil companies. [...] But the new measure introduced today is not the only one in the works. Senate Finance Chairman Max Baucus (D-Mont.) is also drafting a bill that would repeal some of the oil industry tax breaks to finance investments in clean energy technologies. Baucus is planning to hold a hearing on the topic later this week. And various news outlets are reporting that the top executives from Chevron Corp., Royal Dutch Shell PLC and ConocoPhillips Co. will be on Capitol Hill to testify. Reid is expected to discuss the issue in the Capitol later this afternoon and likely will endorse Menendez's plan. "I believe our leadership is in support of the legislation we are introducing today," Menendez said. But when pressed for further details about the issue, Menendez demurred. "I'll let Leader Reid speak later today." The oil industry is staunchly opposed to such changes to its tax structure, saying it is a "vindictive use of the tax code" and that the industry already pays enough in taxes and other fees to the federal government. "More taxes would do nothing to lower prices. They would not affect the global economics underpinning oil supply and demand, which explain today's gas prices," Brian Johnson, a tax policy adviser for the American Petroleum Institute, said yesterday at an event in Washington. "They would, however, hurt the economy by reducing energy investment and the new jobs that would flow from that investment." The sponsors of the new legislation today agreed that their bill would have little impact on soaring prices at the gasoline pump.
National Journal: "Bill Likely to Fail", "Vulnerable Democratic Class" - The bill will likely be the one that Senate Majority Leader Harry Reid, D-Nev., brings to the floor, signaling that he has decided not to move forward with a plan that Senate Finance Chairman Max Baucus, D-Mont., floated last month. Baucus's plan also repeals the tax breaks for the largest oil and gas companies. But it would have diverted the money to fund clean-energy technologies. By putting the money back into deficit reduction, the Democratic leadership is trying to put Republicans in a tough political position by forcing them to vote on a bill that would repeal tax breaks for the benefit of reducing the debt. By reallocating the money to another set of energy subsidies, Democrats worry that the political messaging would get muddled. Reid and his office have not indicated when he will bring the bill to the floor, but it likely won't be until next week at the earliest. It will likely fail, given that efforts to repeal the breaks within the past year have failed. Although the political rhetoric against Big Oil has risen since those votes, it's likely still not enough to get 60 votes. Brown and McCaskill are emblematic of the vulnerable Democratic class up for reelection in 2012. Brown previewed the introduction of the bill at a press conference at an Ohio gas station on Monday. Menendez is also up for reelection, but he is not as big of a target as Brown and McCaskill, because they both hail from energy-intensive swing states. The debate over the tax breaks will continue later this week with a Senate Finance Committee hearing on Thursday, where top executives from the five major oil companies are expected to testify.