As Americans struggle with the price at the pump, oil companies are enjoying multi-billion dollar profits. According to the Wall Street Journal, the spike in oil prices “is expected to lift earnings by about 50% at Exxon Mobil Corp., and about 33% each at Chevron Corp. and ConocoPhillips, compared with a year earlier.” It’s clear we don’t need to be giving away billions in taxpayer dollars to the most profitable companies in the world and even ex-Shell CEO John Hofmeister agrees saying “with high oil prices, such subsidies are not necessary.”
House Republicans have made no secret of their close relationship with Big Oil from their deeply flawed “Drill Only” energy policy to their repeated votes against rolling back taxpayer subsidies. But with gas prices hitting American families and small businesses hard, the GOP is desperately trying to hide their unpopular romance. Last night, Speaker Boehner told ABC News that Big Oil “ought to be paying their fair share”:
“Everybody wants to go after the oil companies and, frankly, they’ve got some part of this to blame,” the Ohio Republican told ABC News today.
Blame aside, what about the cold, hard cash — the billions of dollars in tax breaks and other subsidies big oil receives every year? President Obama has proposed doing away with many of them, which he says would save $45 billion over the next 10 years.
“It’s certainly something we should be looking at,” Boehner said. “We’re in a time when the federal government’s short on revenues. They ought to be paying their fair share.”
That is a departure for the speaker on an issue that Republicans have long defended as necessary to encourage domestic oil production.
“A departure” is quite the understatement–House Republicans have repeatedly chosen Big Oil over the middle class. Just this month, they passed the Republican budget which ended Medicare as we know it while giving $40 billion to Big Oil in tax breaks! And that’s on top of voting down two amendments offered by Democrats earlier this year to have Big Oil, in Speaker Boehner’s words, ‘pay their fair share’:
Democrats Offer: Republicans Say:
An amendment on March 1st to repeal taxpayer-funded subsidies to Big Oil. The amendment would have prohibited large oil companies from receiving certain tax breaks, like the domestic manufacturing deduction in the 2004 international tax law. Repealing these tax breaks would save taxpayers tens of billions of dollars over the next decade.
An amendment on February 18th to make oil companies pay their fair share for drilling on public lands. To help reduce the deficit, the amendment would have fixed a flaw in 1998 and 1999 leases in the Gulf of Mexico that allow oil companies to drill without paying any royalties that could cost American taxpayers up to $53 billion over the next 25 years.
While Republicans try to decide if they are for or against funneling taxpayer dollars to Big Oil, they could start by joining Democrats in supporting common-sense solutions already offered this year:
Federal Price Gouging Prevention Act: Makes it illegal to sell gasoline at excessive prices and prevents Big Oil from taking advantage of consumers and engaging in price gouging. This is real help for consumers in this difficult economic time. Yet, House Republicans voted unanimously against bringing up this legislation. [Vote #165, 235-186, 3/9/11]
Releasing Oil from the Strategic Petroleum Reserve: Temporarily releases 5 percent of the oil from the government’s stockpile (known as the Strategic Petroleum Reserve (SPR)), and replaces it later with refined products like gasoline or diesel – in order to bring down prices now and update the reserves to provide long-term security. Past releases have brought down prices by up to 33 percent. (H.R. 1017)
Making Oil Companies Pay their Fair Share for Drilling on Public Lands: To help reduce the deficit, the Markey amendment would have fixed a flaw in 1998 and 1999 leases in the Gulf of Mexico that allow oil companies to drill without paying any royalties that could cost American taxpayers up to $53 billion over the next 25 years. Republicans rejected this amendment by a vote of 174-251 [HR 1, Vote #109, 2/18/11] despite their calls to reduce the deficit. (H.R. 1352)
Repeal Tax Subsidies for Big Oil: Revoke tens of billions of dollars of oil company tax breaks, such as a giveaway in the 2004 international tax law and a foreign tax loophole for large oil companies. (H.R. 601)
Ensure that Oil Companies USE It: Increase our energy supply by compelling oil and gas companies to produce on the drilling leases they already own, instead of continuing the practice by the oil and gas industry to “squat” on their leased lands without producing. Oil companies currently hold 80 million acres under lease, yet the oil and gas industry is only producing on 19.5 million of those acres. (H.R. 927)
But as President Obama wrote to Congressional leaders today, we need to reduce our dependence on foreign oil and invest in clean energy or we’ll find ourselves in the same cycle over and over again:
In addition, we need to get to work immediately on the longer term goal of reducing our dependence on foreign oil, and our vulnerability to price fluctuations this dependence creates. Without a comprehensive energy strategy for the future we will stay stuck in the same old pattern of heated political rhetoric when prices rise and apathy and neglect when they fall again.
I recently laid out my approach to a comprehensive strategy in my Blueprint for a Secure Energy Future, which includes safe and responsible production of our domestic oil and gas resources and doubling down on fuel efficiency in the transportation sector while investing in everything from wind and solar to biofuels and natural gas. None of you will agree with every aspect of this strategy. But I am confident that, in many areas, we can work together to help show the American people that we can make progress on an energy policy that creates jobs and makes our country more secure.
And I hope we can all agree that, instead of continuing to subsidize yesterday’s energy sources, we need to invest in tomorrow’s. We need to invest in a 21st century clean energy economy that will keep America competitive. In the long term, that’s the answer. That’s the key to helping families avoid pain at the pump and reducing our dependence on foreign oil.
UPDATE: This afternoon, Leader Pelosi called on Speaker Boehner to schedule a vote next week to end the taxpayer subsidies:
April 26, 2011
The Honorable John A. Boehner
Speaker of the House
H-232, The Capitol
Washington, D.C. 20515
Dear Mr. Speaker:
House Democrats have long advocated eliminating outdated and costly taxpayer subsidies that provide billions of dollars to highly profitable oil companies. As you know, the President today called upon Congressional leaders “to take immediate action to eliminate unwarranted tax breaks for the oil and gas industry.”
As you also know, we have had several votes on this subject in the House, and have been disappointed that these proposals have not been supported by the Republican leadership. Your comments yesterday acknowledged that oil companies ought to be paying their fair share. It makes little sense for American consumers — who are now paying over $4 a gallon for gasoline in most parts of the United States — to have billions of their taxpayer dollars subsidizing oil companies that are making record profits.
For these reasons, I am writing to request that you schedule a vote on ending these tax breaks on the House floor upon our return to Washington next week. I look forward to our working together to achieve this necessary change.
Thank you for your consideration of this request.