Yesterday, the Senate took the first step toward repealing wasteful taxpayer giveaways to oil and gas companies.

I was pleased that my Republican colleagues joined Senate Democrats to move this debate forward.

The country deserves to hear the truth about double dipping by oil companies: they take taxpayer money with one hand and raise prices at the pump with the other hand.

But don’t be fooled by last night’s bipartisan vote. Senate Republicans will never side with American taxpayers against Big Oil. It’s against their nature.

They proved it yesterday with rhetoric. And they proved it last year, with a nearly party-line vote against legislation to roll back billions in handouts to oil companies making record profits.

But despite Republican rhetoric, Americans understand it will take more than bumper sticker slogans to stop the pain at the pump.

We have to reduce the nation’s reliance on foreign oil. But we can’t drill our way to energy independence.

We must continuing looking for responsible, new, domestic oil sources. But we must also invest in the clean energy technologies of tomorrow to create good jobs today.

Repealing almost $24 billion in wasteful subsidies to oil companies would pay for those clean energy investments – with money left over to reduce the deficit.

America has only 2 percent of the world’s oil reserves, but consumes 20 percent of the world’s oil supply each year.

So drilling on American soil alone won’t solve our reliance on foreign oil.

Last year, America used a lower percentage of foreign oil than at any time in almost two decades, thanks to the Administration’s policies.

Domestic oil production has increased every year President Obama has been in office. Meanwhile, the America’s dependence on foreign oil has decreased each year.

Yet prices at the pump have continued to rise.

Here is why: for every penny the price at the pump goes up, the five major oil companies make an additional $200 million in profits each quarter.

Gas prices have risen 62 cents this year. Each of those 62 pennies represents pain for American consumers – and billions in profits for Big Oil.

Last year, Big Oil raked in a record $137 billion in profits. And they’re on pace for another year of astronomical profits.

So it is beyond ridiculous when Republicans argue that oil companies need billions in taxpayer subsidies each year.

Middle-class families are struggling. Oil companies that last year raked in $261,000 a minute – 24 hours a day, 365 days of the year – are not.

It should be obvious that America needs to reduce its reliance on foreign oil. But if anyone needs another reason, just look at the regimes that benefit from the global addiction to oil.

For example, Iran uses profits from global oil sales to support its terronuclear weapons program.

So it is critical that the Senate act now – and act quickly – to further tighten sanctions against Iran. These sanctions are a key tool as we work to stop them from obtaining a nuclear weapon, threatening Israel and ultimately jeopardizing U.S. national security.

The only way to get sanctions in place immediately is to take up a bipartisan bill that passed unanimously out of the Senate Banking Committee.

I have alerted the Republican Leader that I will soon ask consent to move forward on this measure.

Unfortunately, I understand my Republican colleagues will object to moving forward with these new sanctions because they want to offer additional amendments.

But new changes to the bill at this time will only slow down its passage.

There are a number of Democrats who would also like to offer amendments to this bill. But in an effort to get sanctions in place as quickly as possible, Democrats have agreed to streamline the process and refrain from offering their amendments.

We cannot afford to slow down this process.

Passing this bill immediately will help prevent Iran from acquiring a nuclear weapon. And that is a goal we can all agree on.

Washington, D.C.–Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding Republicans’ willingness to risk our economy to protect tax breaks for oil companies and corporate jets. Below are his remarks as prepared for delivery:

T.S. Eliot wrote in a poem “hurry up please it’s time.” He could have been writing to us here in the Senate.

“Yesterday this great nation celebrated its 235^th birthday. In those 235 years we have accomplished many admirable things, and we have done it together

We have landed on the moon, invented new ways to save lives and fought for Democracy and freedom around the world.

But now we stand poised to make a different kind of history. For the first time the United States of America stands at the brink of defaulting on our financial obligations.

The chief economist for the U.S. Chamber of Commerce has said allowing America to default on its debt “would be tantamount to writing a bad check.”

But unless we take action, tarnishing this great nation’s sterling reputation will be the least of our concerns. We also risk the very fate of this country’s economy, and the world economy along with it.

The last time this country was plunged into a major recession – three short years ago – we took the world with us. When Wall Street greed caused the near collapse of our financial system, Americans across the country lost their jobs, their homes and their savings. And so did people across the globe.

This country is only beginning to recover, and the world with us.

But the crisis we face now is one of even greater proportion. Without exception, the most respected economists and business minds of our time have said that if America defaults on its debt it will have dire consequences here and around the globe.

“Catastrophe” they have called it.

That same U.S. Chamber of Commerce economist said a failure to avert this crisis “is not a possibility.” He could not even conceive that Republicans in Congress could shirk their duty.

Defaulting on our debt would risk millions of American jobs. It could halt tax refunds, Social Security checks, Medicare payments and even paychecks for our troops. And the depression it would cause here at home would ripple around the globe.

This default crisis is not a new problem. It has loomed for months.

But we no longer have those months – or even weeks – to avert this catastrophe. We have days.

Yet my Republican colleagues have walked away from the negotiating table when we were nearing a solution and so close to disaster.

Why? To protect oil companies. To protect the owners of yachts and corporate jets. To protect corporations that ship jobs overseas. To protect millionaires and billionaires from paying their fair share.

Twenty percent of all the income earned in this nation is earned by the top 1 percent of its citizens. It is this top 1 percent that Republicans are determined to protect. Republicans walked away from negotiations to protect them.

Meanwhile, the rich are getting richer and the poor are getting poorer. And the middle class Democrats have worked to make stronger is disappearing. Middle-class families are struggling to make ends meet.

That is why I have brought to the floor legislation demanding millionaires and billionaires contribute their fair share to this crucial deficit reduction struggle.

When Republicans talk about shared sacrifice, they mean the sacrifice should be shared by those who can least afford it. Democrats believe the sacrifice should be shared by the richest 1 percent as well. The others have all sacrificed too much already.

As we debate this in the U.S. Senate this week, negotiations with the President and Vice President must continue.

The invitation to Republicans to help prevent a catastrophic default remains open. To become part of the solution, rather than part of the problem, all Republicans have to do is accept that invitation.

The time is here for my Republican colleagues to put politics aside. Simply put, we are out of time.

But Democrats cannot negotiate with ourselves. When one side comes to the table and the other side refuses, it is impossible to negotiate.

So, this week, we will debate the solution to this crisis whether Republicans like it or not.

Democrats will be clear about what is at stake: the fate of the global economy.

We will be clear about our priority: to avert a catastrophic default and protect our fragile economic recovery.

And we will be clear about the middle ground we have already found: we must cut the deficit to get our fiscal house in order.

Democrats are willing to compromise. But compromise does not mean allowing our Republican colleagues to put the wants of a few millionaires and billionaires ahead of the needs of this nation and the world.

I repeat the words of T.S. Eliot: “hurry up please it’s time.”

Washington, D.C.–Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding Republicans’ willingness to risk our economy to protect tax breaks for oil companies and corporate jets. Below are his remarks as prepared for delivery:

Yesterday I sat down with the President to talk about how to avoid a default crisis that would be black mark on this country’s reputation.

If we fail to avert this crisis, it would be the first time in our nation’s history that we have defaulted on our financial obligations. And it would send shock waves through the global economy.

I’m not the only one saying that. The most respected voices in the business and financial community are saying the same thing. Default would be awful.

Business leaders, economists, bank executives, credit rating agencies and even a Republican advisor to Presidents Ronald Reagan and George H.W. Bush have used some very serious words to describe the kind of crisis defaulting on our debt would cause.

The word many have used is “catastrophe.”

Warren Buffett said allowing the United States to default on its debt would be Congress’ “most asinine act” ever.

Treasury Secretary Timothy Geithner said a failure to avert default would have “catastrophic economic consequences that would last for decades.”

Failure to avert this crisis would have dire consequences. It would result in the most serious financial crisis this country has ever faced. Millions of Americans could lose their jobs. Social Security checks could stop. So could paychecks to our troops.

So, what could be so important that my Republicans colleagues are willing to put our economy at such dire risk? What could be worth walking away from the negotiating table? Tax breaks for wealthy oil companies and corporate jets.

Republicans have gone to the mat for Big Oil – fighting again and again to preserve wasteful taxpayer-funded giveaways to companies that made $32 billion in profits in the first quarter of this year alone. And Republicans walked away from the negotiating table to save tax breaks for corporate jets.

So, which big industries and special interests will they fight for next? Oil companies? Companies that ship jobs overseas? Corporate jets?

If they were truly serious about reducing the deficit, they would admit this kind of waste must end.

Yet some top Senate Republicans say eliminating these subsidies shouldn’t even be part of the discussion as we find a way to reduce the deficit and avoid a catastrophic default.

Several rank-and-file Senate Republicans have said handouts to oil and gas companies and other wasteful tax breaks should be on the table as we negotiate. And 34 Republicans endorsed the view that ending taxpayer giveaways should be part of the solution when they voted to eliminate subsidies for ethanol.

It seems Republicans can’t even agree among themselves whether subsidies and giveaways are sacrosanct.

The one thing they can agree on: they’re willing to balance the budget on the backs of seniors instead. They’re willing to end Medicare as we know it. They’re willing to slash Medicaid, jeopardizing coverage for 80 percent of American seniors in nursing homes.

Republicans’ priorities are clear. They’re also dead wrong.

Democrats know we need to make difficult spending cuts to reduce our deficit. But to dig ourselves out of this financial hole, we must also create jobs to spur our economy. And we must break the cycle of wasteful giveaways – not break our promise to seniors.

The junior Senator from South Carolina, a Republican, threatened that any Republican who votes to avert a default crisis will be “gone” – voted out in a wave of Tea Party anger. This kind of inflammatory language is irresponsible. There is simply too much at stake.

Also, he didn’t mention that 235 Republicans in the House and 40 in the Senate – including the junior Senator from South Carolina – have already voted to increase our debt this year. Their ideological budget would have increased the debt by more than 60 percent over the next 10 years. That’s nearly $9 trillion in a decade.

And what did Americans get for their $9 trillion? A plan that ends Medicare as we know it. A plan that would slash Medicaid, jeopardizing coverage for 80 percent of American seniors in nursing homes. A plan that protects tax breaks for billionaires and oil companies while putting millions of seniors at risk.

The psychologist Alfred Adler once said that “it is easier to fight for one’s principles than to live up to them.” Republicans shouted loudly and repeatedly about reducing the debt. Then they gave us 9 trillion reasons not to trust their rhetoric.

The time for empty rhetoric is over. Now it is time for my Republican colleagues to put the good of our economy ahead of their own good politics.

I am happy to see Republicans opening up to what Democrats have being saying all along: cutting wasteful subsidies to big oil should be on the table if we are going to reduce the deficit.

Yesterday my friend, the senior Senator from Tennessee, said we should consider ending taxpayer subsidies for oil companies making record profits.

Democrats agree. Handouts like these – to companies that made $36 billion in the first quarter of this year alone – must be part of the discussion as we get our fiscal house in order.

As we decide where to cut, we will need to make some tough choices. But not every choice has to be difficult.

If we are serious about reducing spending, ending tens of billions in taxpayer giveaways to big oil companies shouldn’t be one of the difficult decisions.

And when the other side says the alternative is to end Medicare, slash Medicaid and put millions of seniors at risk, the choice is that much clearer.

We cannot take with one hand from those who can least afford it and give with the other to those who can.

Before we end Medicare as we know it or eliminate Medicaid funding for nursing homes, as the Republicans have proposed, we should cut wasteful spending.

During the course of a year, one in five Americans will be on Medicaid. The cuts Republicans propose affect real people.

The elderly man in the nursing home. The child missing her yearly checkup. The pregnant woman whose baby depends on proper prenatal care. The person with a disability who is able to live alone thanks to the helping hand Medicaid provides.

And these cuts will affect you, too. Cutting Medicaid simply shifts costs – it doesn’t lower them.

Each patient who doesn’t get the care he needs from a doctor today will get it tomorrow for twice the price in an emergency room. And you and I will foot the bill.

The American people have spoken loudly and clearly. They do not want to balance the budget on the backs of seniors, children or people with disabilities.

I am glad to one of my Republicans colleagues is finally getting the message.

Snowe: Subsidies Are “Unnecessary” And “Reckless”

Thune: “If In Fact They Are Making Such Enormous Profit, Perhaps They Don’t Need The Support Of The Tax Incentives That Are Given To Them By The American Taxpayer”

Collins: We Should Not “Continue to Subsidize The Oil And Gas Industry”

Senator Collins Said We Should Not “Continue to Subsidize the Oil & Gas Industry” While Taxpayers Struggle to Pay Bills. “With net profits of a single oil company reaching almost 10 billion dollars in a single quarter, we should not expect taxpayers struggling to pay their bills to continue to subsidize the oil and gas industry. Congress should repeal unnecessary tax breaks for big oil companies and use the billions of dollars instead to fund the remaining proposals in my 10-Point Energy Plan.” [Collins Press Release, 4/22/08]

Senator Mark Kirk Supported Nixing Big Oil Subsidies; They’re “Doing Just Fine on Their Own.” On C-Span’s Washington Journal, Sen. Mark Kirk (R-IL) broke with his party and called for cutting Big Oil’s subsidies, explaining that oil companies are “doing just fine on their own”: Q: Why can’t we start collecting royalties, finally, from the oil companies? Or do something about the subsidies that these very wealthy corporations have? Why can’t we get rid of these tax havens? Why can’t we talk about those things? Why can’t we put those on the table as well? KIRK: I think we should. In the House of Representatives, I voted to wipe out many of the oil company subsidies. They’re doing just fine on their own. I think that many of the corporate welfare programs are misplaced. [Think Progress, 3/1/11]

Senator Olympia Snowe: At a Time of Record Oil Profits and High Consumer Prices, Tax Breaks for Big Oil Are “Not Only Unnecessary, They Are Reckless.” Snowe said in a release, “In a time of record profits for oil companies and skyrocketing energy costs for consumers, tax breaks for the oil industry are not only unnecessary, they are reckless.  It would be far wiser to redirect the tax expenditures from these provision to incentives, such as the development of alternative and renewable energy sources from products that are developed, grown and manufactured domestically, so that the current energy crisis can be the last one.”  [Snowe Press Release, 4/26/06]

Thune: If Oil Companies Are Making Record Profits Then They Don’t Need Tax Incentives. Thune said in a floor speech,  “If in fact they are making such enormous profits then perhaps they don’t need the support and the tax incentives that are given to them by the American tax payer.” [Thune Floor Speech, 4/25/06]

·         Thune Authored Bill To Suspend Oil Subsidies, Called Them Unnecessary. In a 2006 press release Thune said, “Senator John Thune today introduced legislation that would provide immediate relief at the gas pump to American consumers. The Gas Price Reduction Act of 2006 would suspend the 18.4 cents per gallon federal gas tax through the end of September. The lost revenues would be reimbursed by a temporary suspension of a number of tax credits and royalty waivers currently enjoyed by the oil companies…Due to record oil profits, it is apparent many of these incentives are unnecessary. Many of these tax breaks were created years ago when the price per barrel was low and the federal government was trying to create incentives for further exploration. With the price of crude oil now at $73 per barrel, oil companies do not need taxpayer subsidized incentives to produce oil.” [Thune Release, 4/27/06]

Senator Dan Coats: “I Said Everything is on Table and That Includes Ethanol, That Includes Oil Subsidies.” “Coats said he would also be willing to discuss phasing out subsidies for oil production and ethanol – tax breaks he’s fought to maintain in the past. ‘I said everything is on the table. And that includes ethanol, that includes oil subsidies.’” [ABC News, 4/13/11]

Senator Lamar Alexander: Federal Subsidies for Coal, Oil, and Gas “May be too Expensive.” At a Department of Energy, Energy Innovation Summit, Tennessee Senator Lamar Alexander said, “Sometimes we get so entranced with an idea that we initiate a federal subsidy for it, and it never goes away.  We’ve done that with renewable energy, ethanol, mature sources such as coal, oil and gas. That may be too expensive.” According to Platts, “Later, on the sidelines of the conference, Alexander, the third ranking Republican in the Senate, said he may support some of President Barack Obama’s proposal to eliminate $26 billion in oil and gas tax breaks.” [Platts.com, 3/2/11]

Lindsey Graham Has Supported Ending Tax Breaks for Big Oil in Past: “It is Irrational to be Allocating Around $1 Billion Per Year in Tax Dollars When Oil Companies Are Recording Record Profits.” “It is irrational to be allocating around $1 billion per year in tax dollars to assist in production at a time when oil is $124 per barrel and companies are recording record profits. The proposal also seeks royalty payments due on existing leases where royalties were not previously charged. The inability to collect royalties was a result of poor drafting of the leases during the Clinton Administration and could result in billions in payments being collected over the next 10 years. These revenues will be invested in alternative fuel technology.” [Graham Press Release, 8/1/08]

Snowe: Subsidies Are “Unnecessary” And “Reckless”

Thune: “If In Fact They Are Making Such Enormous Profit, Perhaps They Don’t Need The Support Of The Tax Incentives That Are Given To Them By The American Taxpayer”

Collins: We Should Not “Continue to Subsidize The Oil And Gas Industry”

Senator Collins Said We Should Not “Continue to Subsidize the Oil & Gas Industry” While Taxpayers Struggle to Pay Bills. “With net profits of a single oil company reaching almost 10 billion dollars in a single quarter, we should not expect taxpayers struggling to pay their bills to continue to subsidize the oil and gas industry. Congress should repeal unnecessary tax breaks for big oil companies and use the billions of dollars instead to fund the remaining proposals in my 10-Point Energy Plan.” [Collins Press Release, 4/22/08]

Senator Mark Kirk Supported Nixing Big Oil Subsidies; They’re “Doing Just Fine on Their Own.” On C-Span’s Washington Journal, Sen. Mark Kirk (R-IL) broke with his party and called for cutting Big Oil’s subsidies, explaining that oil companies are “doing just fine on their own”: Q: Why can’t we start collecting royalties, finally, from the oil companies? Or do something about the subsidies that these very wealthy corporations have? Why can’t we get rid of these tax havens? Why can’t we talk about those things? Why can’t we put those on the table as well? KIRK: I think we should. In the House of Representatives, I voted to wipe out many of the oil company subsidies. They’re doing just fine on their own. I think that many of the corporate welfare programs are misplaced. [Think Progress, 3/1/11]

Senator Olympia Snowe: At a Time of Record Oil Profits and High Consumer Prices, Tax Breaks for Big Oil Are “Not Only Unnecessary, They Are Reckless.” Snowe said in a release, “In a time of record profits for oil companies and skyrocketing energy costs for consumers, tax breaks for the oil industry are not only unnecessary, they are reckless.  It would be far wiser to redirect the tax expenditures from these provision to incentives, such as the development of alternative and renewable energy sources from products that are developed, grown and manufactured domestically, so that the current energy crisis can be the last one.”  [Snowe Press Release, 4/26/06]

Thune: If Oil Companies Are Making Record Profits Then They Don’t Need Tax Incentives. Thune said in a floor speech,  “If in fact they are making such enormous profits then perhaps they don’t need the support and the tax incentives that are given to them by the American tax payer.” [Thune Floor Speech, 4/25/06]

·         Thune Authored Bill To Suspend Oil Subsidies, Called Them Unnecessary. In a 2006 press release Thune said, “Senator John Thune today introduced legislation that would provide immediate relief at the gas pump to American consumers. The Gas Price Reduction Act of 2006 would suspend the 18.4 cents per gallon federal gas tax through the end of September. The lost revenues would be reimbursed by a temporary suspension of a number of tax credits and royalty waivers currently enjoyed by the oil companies…Due to record oil profits, it is apparent many of these incentives are unnecessary. Many of these tax breaks were created years ago when the price per barrel was low and the federal government was trying to create incentives for further exploration. With the price of crude oil now at $73 per barrel, oil companies do not need taxpayer subsidized incentives to produce oil.” [Thune Release, 4/27/06]

Senator Dan Coats: “I Said Everything is on Table and That Includes Ethanol, That Includes Oil Subsidies.” “Coats said he would also be willing to discuss phasing out subsidies for oil production and ethanol – tax breaks he’s fought to maintain in the past. ‘I said everything is on the table. And that includes ethanol, that includes oil subsidies.’” [ABC News, 4/13/11]

Senator Lamar Alexander: Federal Subsidies for Coal, Oil, and Gas “May be too Expensive.” At a Department of Energy, Energy Innovation Summit, Tennessee Senator Lamar Alexander said, “Sometimes we get so entranced with an idea that we initiate a federal subsidy for it, and it never goes away.  We’ve done that with renewable energy, ethanol, mature sources such as coal, oil and gas. That may be too expensive.” According to Platts, “Later, on the sidelines of the conference, Alexander, the third ranking Republican in the Senate, said he may support some of President Barack Obama’s proposal to eliminate $26 billion in oil and gas tax breaks.” [Platts.com, 3/2/11]

Lindsey Graham Has Supported Ending Tax Breaks for Big Oil in Past: “It is Irrational to be Allocating Around $1 Billion Per Year in Tax Dollars When Oil Companies Are Recording Record Profits.” “It is irrational to be allocating around $1 billion per year in tax dollars to assist in production at a time when oil is $124 per barrel and companies are recording record profits. The proposal also seeks royalty payments due on existing leases where royalties were not previously charged. The inability to collect royalties was a result of poor drafting of the leases during the Clinton Administration and could result in billions in payments being collected over the next 10 years. These revenues will be invested in alternative fuel technology.” [Graham Press Release, 8/1/08]

“Republicans would rather cut college scholarships, slash cancer research and end Medicare than take away taxpayer-funded giveaways to oil companies that are raking in billions in profits. That tells you everything you need to know about their priorities.

“We could have cut our deficit by $20 billion today, but Republicans defended oil companies instead. This is exactly the kind of wasteful spending we should be cutting. Democrats are not going to stop trying to end these wasteful taxpayer giveaways. I hope next time my Republican colleagues will put America’s seniors, students and middle-class families ahead of oil companies.”

Asbury Park, NJ Editorial: Oil Company Claims “Absolutely Embarrassing,” “Take The Breaks Away From the Big Oil Companies.”

Albert Lea, MN Editorial: “Use The Money Where It Is Really Needed”

Salt Lake Tribune Editorial (UT): Republicans “Downright Dishonest” To Talk Debt and Defend Big Oil Subsidies. “U.S. Tax Code benefits that oil companies seek out with at least as much vigor as any new pocket of petroleum mean higher profits for the firms, and lower revenues for the United States Treasury, amounting to some $4.4 billion a year. President Obama and the Democrats in the Senate want to end those tax breaks. Hatch does not. On this matter, the Democrats are right, and Hatch is not only wrong, he is being downright dishonest if he keeps defending the tax breaks even as he decries the size of the national debt.” LINK

Great Falls Tribune (MT): Baucus Calls For End To Big Oil Tax Breaks Big Oil. “Max Baucus told the heads of America’s biggest oil companies Thursday that they should stop getting billions of dollars in tax breaks because the country’s better off using the money to reduce the national debt than padding the profits of Fortune 500 companies. ‘We can put this money to better use, I believe, and we should,’ the Montana Democrat and chairman of the Senate Finance Committee told the assembled executives at a Capitol Hill hearing. ‘We should use this money to reduce our deficit instead of putting the burden on seniors and our children’s future. … We have to make choices. None of them are easy.’” LINK

Somerset County Daily-American Editorial (PA): Big Oil Tax Breaks Are Un-American. “Gasoline has been hovering around $4 a gallon, but big oil companies think the taxpayers should continue to subsidize the industry. It would be one thing if they were using the subsidies to expand production and lower prices at the pump. But they are not. The oil company executives testified before Congress that they don’t need incentives for oil and gas exploration and production. They spend most of their profits to purchase their own stock and boost their dividends. Congress should rescind the tax breaks that account for the $20 billion for the oil industry.” LINK

Albert Lea Tribune Editorial (MN): Time For A Change On Oil Subsidies. “the reality is that handing out fewer tax breaks to oil companies would mean either fewer tax dollars coming from everyone else or a bite out of the deficit. So the question facing Congress and the American people is whether they are better off giving their dollars to wealthy oil companies or conserving them for larger needs. For most, the choice is obvious: Use the money where it is really needed, not where it just adds to an already giant profit.” LINK

Asbury Park Press Editorial (NJ): No More Tax Breaks For Oil Companies. “There is no way the oil company executives can claim they are just regular Joes, trying to get ahead in a hard world. That claim is more accurately made by the people who are hoping they have enough gas in their cars to get to and from work until the next payday. It’s absolutely embarrassing. Take the breaks away from the big oil companies. Use the money to fuel other programs.” LINK

Lompoc Record Editorial (CA): The Dark Humor Of Oil Prices. “It was, at times, laughable to listen to the oil CEOs, one of whom whined that Congress ought not to ‘punish our industry for doing its job well.’ Talk about non sequiturs. What the well-dressed oil boss meant was that U.S. consumers paying record-high prices at the pump should continue to pony up about $4 billion in a year in what amounts to a taxpayer subsidy of an industry that does what it pleases, when it pleases and to whom it pleases. If the oil industry is in search of sympathy, they won’t get it from American motorists stressed by pump prices that may soon jump above $5 a gallon.”  LINK

ABC 2 News, Baltimore (MD): Cardin Speaks Up Against Breaks For Oil Companies. “Higher gas prices mean cutting back for most of us. But it turns out, big oil companies are still banking big money with some tax breaks. Now U.S. Senator, Ben Cardin wants to even the score. On Monday, Cardin held a press conference calling for the passage of legislation that would end $4 billion a year in subsidies and tax breaks for the five biggest oil companies.” LINK

NBC 10 News, Providence (RI): Congressional Delegation Wants End To Oil Subsidies. “As gasoline prices float at about $4 a gallon, Sens. Sheldon Whitehouse and Jack Reed and Rep. David Cicilline stood in front of the ExxonMobil terminal in the Port of Providence to demand action. ‘While Rhode Islanders are paying over $4 a gallon for gas, we are giving the oil industry $4 billion in tax subsidies a year. It’s extraordinary,’ Reed said. Whitehouse echoed those words. ‘At the same time Rhode Islanders are getting clobbered at the pump by big oil, big oil is making the biggest profits it’s practically ever made. Just in the first three months of this year, the Big 5 made $33 billion dollars in profits,’ Whitehouse said.” LINK

ABC News (MI): Senator Debbie Stabenow Discusses Gas Prices. “Fresh from questioning oil company executives at a hearing Thursday, U.S. Senator Debbie Stabenow stopped in Mid-Michigan Friday to talk gas prices. The Senator was discussing efforts to combat rising gas prices and ways to help those oil companies become part of the solution. ‘I think it’s fair as we’re asking everybody to sacrifice, to be part of what we need to do to pay down the national debt, that we be saying to the oil companies, We are asking you to support taking 1 percent of your profits and putting it towards America being secure,’ Stabenow said.” LINK

Saginaw News (MI): Senator Debbie Stabenow: Oil Companies Should Share Their Profits To Pay Down The National Debt. “U.S. Sen. Debbie Stabenow, D-Lansing, has an idea to reduce the national debt: Make oil companies share their profits.  … ‘We are asking (oil companies) to take 1 percent of their profits and put it towards paying down our national debt,’ she said. Stabenow also advocated eliminating federal oil company subsidies.” LINK

Associated Press (MD): Md. Senator To Push For Ending Tax Breaks For Oil Companies. “Maryland Sen. Benjamin Cardin is pushing for an end of $4 billion a year in subsidies and tax breaks for the five biggest oil companies.” LINK

KOMO News (WA): Cantwell Pushes Plan To Slash Gas Prices ‘Overnight’. “With no relief in sight at the gas pump, one of our state’s senators is going on the attack. U.S. Sen. Maria Cantwell says oil speculators are to blame for budget-busting prices – and she says it’s time to rein them in. As drivers wonder just how high gas prices can go, Cantwell and other lawmakers have been grilling oil company execs.” LINK

WPRI News (RI): RI Leaders Crack Down On Oil Companies. “With gas prices continuing to loom around $4 per gallon – national leaders are now considering tapping into the country’s strategic petroleum reserves and investigating Wall Street speculators. Sen. Sheldon Whitehouse said, ‘Undoubtedly, Rhode Islanders are being clobbered at the pump and something needs to be done.’” LINK

Lakeland, Florida Editorial: “Speaker Boehner Had It Right The First Time When He Said Big Oil Companies Don’t Need Those Tax Breaks”

Wall Street Journal Editorial: “Maybe Mr. Mulva Should Work On Being A Better American”

Philadelphia Daily News: We Should Cut The Deficit By Ending Giveaways To Oil Companies, Not by Ending Medicare. “These companies are swimming in profits. The big five who were questioned in Washington yesterday booked $36 billion in profits just for the past quarter. Yet, ExxonMobil CEO Rex Tillerson whined that taking away subsidies would mean fewer explorations and less production, leading to higher prices at the pump. This was curious. First they tell us they can’t control an international market that sets oil prices. So why would losing a tax break that adds about 2 percent to their annual profits have an instant impact on pump prices?” LINK

Jackson Clarion Ledger: Oil Profits: Tax Breaks Raise Ire. “Meanwhile, in 2006, Exxon Mobil Corp. posted record profits for any U.S. company in history – $10.71 billion for the fourth quarter and $36.13 billion for the year. In 2008, it broke its own record with $11.68 billion in the second quarter. Then, did it again with $14.83 billion in the third quarter. The other oil companies profited immensely, as well. What goes up … stays up? And U.S. taxpayers are adding to the companies’ profits? While tea party Republicans attack middle-class tax breaks and the social safety net for the elderly, the sick and the poor? And want more tax breaks for the rich? That’s fiscal responsibility?” LINK

Las Vegas Sun: Who Needs Subsidies? “Republicans are taking the oil companies’ view. They say the bill wouldn’t lower the prices at the pump, but if that’s true, what’s the point of giving the subsidies? The Republicans also complain that the Democrats are trying to raise taxes, but Democrats just want them to pay their fair share. … The fact is the oil industry can and should pay more. Congress should pass the bill. It’s disgusting that Republicans are letting the oil companies gorge themselves while average Americans get stuck with the bill.” LINK

Louisville Courier Journal Editorial: Big Oil’s Breaks. “Late last month, ExxonMobil announced it had made almost $11 billion in the first few months of 2011, an improvement of about 70 percent over the same time last year. Ditto Shell: more than $6 billion net income in the first quarter, 22 percent higher than in the same quarter last year. So why, some may ask, haven’t the tax breaks given to big oil companies — some of those sweeteners in place since the 1920s — become part of the scything operation as congressional deficit hawks go after Planned Parenthood, Medicare and whole executive departments in their zeal to cut spending?” LINK

Miami Herald: On Tax Fairness And Loopholes. “In a scene reminiscent of the congressional hearing where tobacco company executives innocently denied that nicotine is addictive, oil company executives solemnly told Congress last week that their exorbitant profits are no big deal. One even suggested that closing big oil’s tax loopholes is somehow ‘un-American.’ Tell that to Americans struggling to make ends meet as they cope with $4-a-gallon gasoline and the economy gets hit with a sudden inflationary spike because of rising fuel prices. Meanwhile, oil companies report record earnings. To top it off BP acknowledges that taxpayers, in effect, are being asked to pick up part of the cost for BP’s oil spill in the Gulf of Mexico.” LINK

Wall Street Journal: Big ‘Un-American’ Oil. “The five oil companies bagged more than $35 billion in profits in the first quarter, noted Democratic Sen. Max Baucus of Montana, the committee chairman. That puts them on track for record profits of more than $100 billion this year. Eliminating some tax deductions, by contrast, aims to raise about $2 billion a year. And this has got Mr. Mulva hurling the ‘un-American’ bomb? Maybe Mr. Mulva should work on being a better American.” LINK

San Jose Mercury News: Oil Industry Reaping Benefits On Massive Campaign Contributions. “In the first quarter of 2011, the five largest multinational oil companies made nearly $36 billion in profits; they need taxpayer support like Warren Buffett needs welfare. Subsidies of this magnitude should be reserved for industries that serve a compelling national interest but are not yet profitable. And yet Senate Republicans who say debt and deficits are their top priority want to continue funneling taxpayer dollars to companies piling up massive profits, even as Congress cuts funding for food stamps and schools.” LINK

Lakeland Ledger: Big Oil Companies: Tax Breaks Not Needed. “On April 28, Exxon, Mobil and Shell reported ‘huge increases in their first-quarter profit … helped by higher oil prices and earnings from refining,’ reported The New York Times. In other words, while Americans are paying more at the pump to feed big oil’s profit margins, they continue to hand some of the most profitable companies in the world something like $4 billion a year in tax subsidies. Speaker Boehner had it right the first time when he said big oil companies don’t need those tax breaks. Obama has challenged Congress to side with the taxpayers against the oil lobby. The only question is, whose side is Congress on?” LINK

Longview Daily News: Big Oil Can Survive Without Federal Assistance. “There’s no doubt that earnings and profits are high. The six largest American oil companies returned profits of an aggregate $80 billion in 2010 and are well ahead of that schedule for 2011, with Exxon’s first-quarter profits exceeding $10.6 billion. At the same time, this immensely profitable industry remains entrenched at the front of the government welfare line, collecting an estimated $5 billion per year in outright government subsidies and tax abatements and perhaps another $3 or $4 billion in other special favors and considerations on the federal and state levels.” LINK

Santa Fe New Mexican: Ending Oil Subsidies Makes Fiscal Sense. “Republicans striking fiscally responsible poses are focusing on that ogre known as the federal debt. Forget that their party, and their party’s president, spun us from surplus to deficit in the course of eight years; they must cut spending — and keep financial burdens on the middle and lower classes. Well, looked at properly, the oil-business subsidies amount to spending — so here’s your chance, elephants, to take a nice bite out of it .” LINK

Cape Cod Times: End Oil Subsidies. “The sticker shock we are feeling at the gasoline pumps is a serious drag on efforts to restart the sputtering economy. With U.S. gas prices averaging more than $4 per gallon — and considerably more in many places on the Cape and Islands — filling the tank is tipping $50 or more. … At a time when the most basic human service programs are being slashed and Americans are pinching every penny, it is extremely difficult to see the logic in continuing the subsidies for an industry that is demonstrating it clearly doesn’t need the support.” LINK

Joplin Globe: Another Place To Cut Spending. “When we pay our monthly bills at home, we follow a budget and spend only what we bring in. So when our budgets get lean and we have to cut back, we look at unnecessary spending. Maybe that means we buy hamburger instead of steak. We get generic items instead of name-brand items. The federal government has a chance to cut $2 billion annually for the next decade by rescinding government subsidies to the five largest oil companies in the world, according to a bill sponsored by Sen. Claire McCaskill, D-Mo. BP, Chevron, ConocoPhillips, Exxon and Shell reported profits of $32 billion in the first quarter alone. So we support McCaskill’s idea to get those subsidies back.” LINK

San Francisco Chronicle: Big Oil’s Money Gusher. “ExxonMobil’s first-quarter earnings of $10.7 billion are up 69 percent from last year. Other oil companies are also scoring record gains. The five biggest oil companies together report more than $35 billion in profits. This gusher is an embarrassment for an industry seeking to keep its $4 billion annual tax subsidy from the U.S. government. It’s especially embarrassing at a time when Americans are paying $4 a gallon or more at the pump.” LINK

Houston Chronicle: Let’s Cut Off The Subsidies To Profitable Oil Companies. “These subsidies cannot be defended. With the evidence against them piling up and oil companies reporting huge profits, the tide finally may be turning against the subsidies. Let’s hope that as momentum builds to end giveaways to big oil, it will be the beginning of an energy policy that relies less on an industry that rakes in huge profits while it takes from Americans on their tax returns and at the pump.” LINK

“Imagine there’s a choice Congress has to make.  We’re standing before two doors, and have to pick one.  Behind door number one is a choice the Chairman of the Federal Reserve calls ‘catastrophic.’

“The Secretary of the Treasury says that if we open that same door, it could lead to a financial crisis ‘more severe than the crisis from which we are only now starting to recover.’

“And the majority of the American people we represent say opening that door would be ‘disastrous.’  Not just a bad idea, not one that would lead to discomfort – but one that would lead to disaster.

“It wouldn’t be just irresponsible to make that choice.  We would be out of our minds.

“Well, we’re going to have to make up our minds sooner rather than later.  That’s because today, America has hit a milestone, but it isn’t one anyone’s celebrating.  Today is the day we hit our debt limit, which means we’ve reached the maximum amount the United States is allowed to borrow.

“It means that with each passing day, we’re that much closer to the disaster that would come from defaulting on our debts – the day we would forfeit, for the first time ever, the full faith and credit of the United States.

“This is the crisis Chairman Bernanke called ‘catastrophic,’ what Secretary Geithner warned would make the Great Recession look small, and what the American people demand we avoid.

“Defaulting on our obligations would be unprecedented.  But it’s not unavoidable.  We can be responsible leaders and choose to open the other door.  It might not be ideal, but we have to make a choice.  And door number two is a much better, safer and smarter choice.

“Let’s be clear about what the debt limit does and doesn’t mean.  Raising the debt limit when it’s absolutely necessary – and right now, it is – lets us pay the bills that have already come due.

“We borrow a lot of money in this country.  That’s not a new phenomenon, or unique to one party.  It’s how America has done business for centuries.  And borrowing a lot of money means we owe a lot of money.  We cannot cut off our own ability to pay those debts.

“Here’s what it doesn’t mean.  The emergency we enter today isn’t about a penny of new spending.  It’s not about new programs or new taxes.  It’s not about creating new obligations, only meeting existing ones.  The debt limit is about paying what we already owe.

“If we don’t act – if we allow the United States to default – the day of reckoning will be much, much worse than today.  Things will be much, much worse for Americans jobs, families and businesses than they already are.  And the fallout will be felt around the world.

“Right now, a lot of people are reaching for that first door – the one that leads to catastrophe and crisis.  They’re looking at this choice through a political lens, not an economic lens.  And they’re willing to risk the strength of our economy just to make a political point.

“We can’t afford to play these political games and trigger a default crisis that would lead to catastrophe.  We can’t afford to make unrealistic demands or hold hostage policies that affect real people.

“Speaker Boehner recently asked everyone to act like adults and reach a solution.  I second that request.  Let’s open the second door, and honor our obligations.

“Once we avert this crisis, we can have another important, adult conversation – a conversation about saving money.

“One good way to do that – not the only way, but a good, easy, obvious way – is to cut wasteful spending.  Taxpayer giveaways to companies pulling in record profits are the epitome of wasteful spending.

“We all know which companies I’m talking about – the five biggest oil and gas companies.  It’s time to take away incentives that they don’t need and we can’t afford.

“That’s the question that will come before the Senate this week.  It’s a question of fairness.

“The bonus checks taxpayers are writing to Big Oil are absurd and obscene.  They defy common sense.

“Big Oil isn’t hurting.  It doesn’t need a hand.  In the first three months of this year, the oil industry made $36 billion in profits alone.  Not revenues – profits.  That’s $12 billion a month.  That’s $3 billion a week.  That’s pretty good money.

“Meanwhile, the American taxpayer is giving these same successful companies $4 billion a year.

“So when you take these companies’ profits and add in the handout you, me and every taxpayer gives them, America is saying to Big Oil: You make $3 billion a week for 52 weeks, and we’ll basically give you a 53^rd week for free.

“But what about the average American taxpayer – the one who’s footing the bill for this Big Oil bonus?  ExxonMobil now pays a smaller share of its income in taxes than the average taxpayer.

“This isn’t because the average American is paying more in taxes – it’s because Big Oil is paying less.

“Over the last four years, since Democrats have controlled the Senate, we’ve cut taxes for middle-class families nine different times.  The Democratic Senate has passed a trillion-and-a-half dollars in tax cuts.  And now families pay less in federal taxes as a share of the economy since 1950, when Harry Truman was President.

“So this is a question of fairness – it’s about Big Oil paying its fair share.

“It’s also a question of priorities.  The people who want to keep giving their Big Oil buddies four billion taxpayer dollars a year are the same ones who want to take the social safety net away from the sick, seniors and the poor.  These people kick and scream about investing in cancer research, or protecting student loans that help so many afford the rising costs of college.

“But ask them to recognize the absurdity of giving Big Oil taxpayer money it doesn’t need, and they cover their eyes and plug their ears.  Ask them to defend it, and they can’t do it.

“That’s what happened last week.  The nation watched the Big Oil bosses try to defend it.  Frankly, they didn’t do a very good job.  It’s not their fault for doing so poorly – they were trying to defend an indefensible position.  But I do hold him responsible for holding that position.

“So this is a question of fairness and a question of priorities.  It’s certainly a question of economics.  But it is not a question of gas prices.

“Independent, nonpartisan experts – and even some of the CEOs themselves – say taking away these giveaways doesn’t have a thing to do with the price at the pump.  Anyone who claims otherwise is simply not telling the truth.

“Those distractions are disruptive to this debate.  So are gratuitous attacks on the patriotism of the debaters.

“One of these companies, ConocoPhillips, said using taxpayer money to pay down the deficit rather than pad Big Oil’s pockets was ‘un-American.’  That’s ConocoPhillips’ word, not mine.

“Attacking another’s patriotism has no place in this debate.  It’s offensive that this company has done that, and shameful that its CEO refuses to recant it or apologize for it.

“I disagree strongly with his position on this issue.  I disagree with his claim that only one side of this debate loves its country.  I question his sense of fairness, and I question his priorities.  But I don’t question his patriotism.  He shouldn’t question mine.”

“I thank Chairman Baucus for holding this important hearing, and hope my Republican colleagues will come to their senses and work with us to end these wasteful giveaways of taxpayer dollars.”

Washington, D.C.–Nevada Senator Harry Reid made the following remarks today on the Senate floor regarding tax giveaways for oil companies:

“As I speak, the heads of the five largest oil and gas companies in the world are testifying across the street.  With the country watching, these extremely wealthy CEOs of extremely profitable corporations are trying to explain to the Senate – and most importantly, to the American people – why they need taxpayer handouts.

“I don’t envy them.  It’s an impossible position to defend.

“Think about this: In just the first three months of this year, the oil industry made $36 billion in profits alone.  Not revenues – profits.  That’s $12 billion a month.  That’s $3 billion a week.  That’s pretty good money.

Detroit Free Press: Stabenow Takes Aim At Oil Subsidies. “On the eve of a congressional hearing, Michigan Sen. Debbie Stabenow and four other Democratic members of the Senate Finance Committee today asked oil company executives to acknowledge they no longer need subsidies that reduce the amount of federal taxes their companies pay. The oil company executives are expected to take part in a Finance Committee hearing on tax incentives and fuel costs on Thursday. The senators who signed a letter to the chief executives of BP America, Chevron, ConocoPhillips, Exxon Mobil and Shell said with oil prices high, they can make billions of dollars a week in profits while still getting billions of dollars a year in subsidies. ‘We have families that are paying as much for gasoline at the pump as they are paying for their groceries to put food on the table,’ Stabenow said.” LINK

Mid Hudson News: Schumer Backs Repeal Of Tax Breaks For Big Oil. “US Senator Charles Schumer announced his support for a proposal to repeal $4 billion in annual tax breaks to the largest oil companies. Schumer’s announcement comes with Hudson Valley gas prices well over $4 per gallon, but now beginning to pull back, slightly, in some places. ‘Decades ago when oil was $17 a barrel, it made sense to give companies an incentive to explore and produce; that’s when these things were passed,’ he said Wednesday. ‘But, with oil hovering around $100 a barrel and Big Oil reaping record it defies logic to spend billions of dollars every year to tax giveaways to Big Oil.’” LINK

The Mitchell Daily Republic: Tim Johnson Calls For End To Oil Subsidies; Thune Disagrees. “Sen. Tim Johnson, D-S.D., called for an end to taxpayer subsidies for oil and natural gas companies Wednesday, saying instead the United States should invest in further ethanol production and improving the infrastructure to deliver ethanol to market. ‘High-priced oil threatens both our energy and economic security. We have a homegrown solution — ethanol,’ Johnson told reporters. ‘It’s time to end the $4 billion a year of taxpayer giveaway to big oil. Oil companies don’t need any help.’” LINK

Coventry Patch: Whitehouse Calls for End to Tax Breaks for Big Oil. “With Rhode Island drivers continuing to feel the pain of rising costs at the pump, U.S. Senator Sheldon Whitehouse (D-RI) today cosponsored legislation introduced in the Senate to end expensive tax breaks for big oil companies.  The Close Big Oil Tax Loopholes Act would end these handouts to the five largest oil companies and use the billions in savings to help reduce our federal deficit. ‘These companies are doing just fine on their own, making over $33 billion in profit last quarter, and shouldn’t be double dipping into Rhode Islanders’ wallets by charging record prices and taking our tax dollars,’ said Whitehouse.  ‘We should put an end to these tax breaks to Big Oil.’” LINK

The Clark Fork Chronicle: Tester Plan Ends $4 Billion In Taxpayer Subsidies To Big Oil Executives. “After introducing new legislation to hold the world’s largest energy giants accountable to American taxpayers, Senator Jon Tester is calling for end to the $4 billion in ‘taxpayer handouts’ that allow the nation’s top Big Oil executives to pull in billions in profit every year. America’s five largest oil giants receive more than $4 billion in taxpayer-funded subsidies every year. The same companies recently reported profits of $4 billion every week.” LINK

KTVZ News Oregon: Wyden, Senators Take Aim At Oil Speculators. “Sens. Maria Cantwell (D-WA) and Ron Wyden (D-OR) led a bipartisan group of 17 senators Wednesday in calling on federal regulators to expedite long-stalled rules to rein in excessive Wall Street speculation in West Texas Intermediate (WTI) crude oil futures and other energy commodities. They said numerous experts have concluded that excessive trading in oil futures is causing oil price volatility unrelated to supply-and-demand fundamentals, and contributing to rising gas prices. According to the U.S. Commodity Futures Trading Commission’s (CFTC) own report, speculators hold futures and options on more than 258 million barrels of oil. That is more than one-third of the amount in the Strategic Petroleum Reserve.” LINK

WNEW News Michigan: Sen. Stabenow, Colleagues Target Oil CEOs. “Sen. Debbie Stabenow and four other Democratic Senators sent a letter to the CEOs of the Big Five oil companies urging them to admit that they no longer need taxpayer-funded subsidies. The heads of the country’s five largest oil companies are scheduled to testify Friday before the Finance Committee.” LINK

KELO News South Dakota: Johnson’s Plan To Save At Pump. “South Dakota Senator Tim Johnson has a plan to save you some money at the pump. He’s co-sponsoring legislation that would extend ethanol and alternative fuel tax credits through 2016. In addition to lowering the cost of fuel, Johnson says it would create jobs. ‘A home-grown solution: ethanol. This is not a new answer but is one that we must continue to invest in for the future,’ S.D. Senator Tim Johnson said.” LINK

KRMS News Michigan: McCaskill Backs Bill Cutting Oil Company Tax Breaks. “With gas prices on the rise and federal debt worries, U.S. Senator Claire McCaskill’s announced her support for legislation that would help address our fiscal crisis by clawing back tax giveaways to the most profitable companies in the world.” LINK

Money Saved By Revoking Wasteful Giveaways Would Reduce Deficit

Washington, DC—Today Democrats sent a letter to the CEOs of the Big Five oil companies urging them to admit in Senate hearings tomorrow that they no longer need taxpayer-funded subsidies. The heads of the country’s five largest oil companies are scheduled to testify before the Finance Committee tomorrow.

With oil at more than $100 a barrel, these five companies make $2.8 billion a week in profits while taking home billions a year in subsidies.

“We urge you to take this opportunity to publicly admit that, given your companies’ prodigious profits, you no longer need taxpayer subsidies,” the Senators wrote. “We hope you will do the right thing for our country’s fiscal health and endorse their discontinuation.

“We are sure you will agree that our nation’s mounting debt is a serious threat to our recovering economy.  But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness…. While families across the country are being squeezed, your industry is doing better than ever.  And yet the U.S. government continues to dole out $4 billion a year in tax breaks to your companies. These subsidies are not sustainable, and we intend to end them.”

The full text of the letter is below:

Rex W. Tillerson                                                         John S. Watson

Exxon Mobil Corporation                                           Chevron Corporation

5959 Las Colinas Boulevard                                       6001 Bollinger Canyon Road
Irving, Texas 75039-2298                                           San Ramon, CA 94583

James J. Mulva                                                            Marvin Odum

ConocoPhillips                                                            Shell

600 North Dairy Ashford                                           One Shell Plaza

P.O. Box 2197                                                            910 Louisiana Street
Houston, TX 77252-2197                                           Houston, TX. 77002

H. Lamar McKay

BP America

501 Westlake Park Blvd

Houston, TX. 77079

Dear Sirs:

As members of the Senate Committee on Finance, we eagerly await your testimony at our panel’s hearing tomorrow. We urge you to take this opportunity to publicly admit that, given your companies’ prodigious profits, you no longer need taxpayer subsidies. We hope you will do the right thing for our country’s fiscal health and endorse their discontinuation.

We are sure you will agree that our nation’s mounting debt is a serious threat to our recovering economy.  But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness.  That is why we introduced legislation yesterday—the Close Big Oil Tax Loopholes Act (S. 940)—that would end $21 billion in projected taxpayer subsidies for the five largest integrated oil companies.  The former President of Shell Oil, John Hofmeister, had the courage to say, in no uncertain terms, that your companies no longer need these giveaways. We urge you, in your testimony tomorrow before the Senate Finance Committee, to acknowledge the same.

We agree with the vast majority of Americans that taxpayer subsidization of your companies is no longer necessary.  When many of these tax breaks were passed into law, oil was less than $20 a barrel. Today, the price of oil is hovering around $100 a barrel.  Because of the exponential increase in the price of oil, the companies you successfully manage have reported a combined total of $36 billion in corporate profits in the first quarter of 2011 alone. That amounts to a staggering $2.8 billion per week of profit.

Every single one of us has heard from constituents back home who are struggling with the rising price of gasoline. While families across the country are being squeezed, your industry is doing better than ever.  And yet the U.S. government continues to dole out $4 billion a year in tax breaks to your companies. These subsidies are not sustainable, and we intend to end them.

We are hopeful that you will agree that S. 940 makes economic sense in our shared goal of putting our country back on the right fiscal track.

Sincerely,

Senator Bob Menendez

Senator Chuck Schumer

Senator Debbie Stabenow

Senator Bill Nelson

Senator Ben Cardin

Money Saved By Revoking Wasteful Giveaways Would Reduce Deficit

Washington, DC—Today Democrats sent a letter to the CEOs of the Big Five oil companies urging them to admit in Senate hearings tomorrow that they no longer need taxpayer-funded subsidies. The heads of the country’s five largest oil companies are scheduled to testify before the Finance Committee tomorrow.

With oil at more than $100 a barrel, these five companies make $2.8 billion a week in profits while taking home billions a year in subsidies.

“We urge you to take this opportunity to publicly admit that, given your companies’ prodigious profits, you no longer need taxpayer subsidies,” the Senators wrote. “We hope you will do the right thing for our country’s fiscal health and endorse their discontinuation.

“We are sure you will agree that our nation’s mounting debt is a serious threat to our recovering economy.  But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness…. While families across the country are being squeezed, your industry is doing better than ever.  And yet the U.S. government continues to dole out $4 billion a year in tax breaks to your companies. These subsidies are not sustainable, and we intend to end them.”

The full text of the letter is below:

Rex W. Tillerson                                                         John S. Watson

Exxon Mobil Corporation                                           Chevron Corporation

5959 Las Colinas Boulevard                                       6001 Bollinger Canyon Road
Irving, Texas 75039-2298                                           San Ramon, CA 94583

James J. Mulva                                                            Marvin Odum

ConocoPhillips                                                            Shell

600 North Dairy Ashford                                           One Shell Plaza

P.O. Box 2197                                                            910 Louisiana Street
Houston, TX 77252-2197                                           Houston, TX. 77002

H. Lamar McKay

BP America

501 Westlake Park Blvd

Houston, TX. 77079

Dear Sirs:

As members of the Senate Committee on Finance, we eagerly await your testimony at our panel’s hearing tomorrow. We urge you to take this opportunity to publicly admit that, given your companies’ prodigious profits, you no longer need taxpayer subsidies. We hope you will do the right thing for our country’s fiscal health and endorse their discontinuation.

We are sure you will agree that our nation’s mounting debt is a serious threat to our recovering economy.  But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness.  That is why we introduced legislation yesterday—the Close Big Oil Tax Loopholes Act (S. 940)—that would end $21 billion in projected taxpayer subsidies for the five largest integrated oil companies.  The former President of Shell Oil, John Hofmeister, had the courage to say, in no uncertain terms, that your companies no longer need these giveaways. We urge you, in your testimony tomorrow before the Senate Finance Committee, to acknowledge the same.

We agree with the vast majority of Americans that taxpayer subsidization of your companies is no longer necessary.  When many of these tax breaks were passed into law, oil was less than $20 a barrel. Today, the price of oil is hovering around $100 a barrel.  Because of the exponential increase in the price of oil, the companies you successfully manage have reported a combined total of $36 billion in corporate profits in the first quarter of 2011 alone. That amounts to a staggering $2.8 billion per week of profit.

Every single one of us has heard from constituents back home who are struggling with the rising price of gasoline. While families across the country are being squeezed, your industry is doing better than ever.  And yet the U.S. government continues to dole out $4 billion a year in tax breaks to your companies. These subsidies are not sustainable, and we intend to end them.

We are hopeful that you will agree that S. 940 makes economic sense in our shared goal of putting our country back on the right fiscal track.

Sincerely,

Senator Bob Menendez

Senator Chuck Schumer

Senator Debbie Stabenow

Senator Bill Nelson

Senator Ben Cardin

Money Saved Would Reduce The Deficit By Tens of Billions

Washington, DC—Nevada Senator Harry Reid and New Jersey Senator Robert Menendez today sent a “Dear Colleague” letter to Senate Republicans asking them to cosponsor legislation that would reduce the deficit by ending wasteful taxpayer handouts to big oil companies making record profits while American families pay $4 at the pump.

The bill would eliminate more than $21 billion in subsidies for the five largest, most profitable oil companies in the world. Some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies.

“It is encouraging that some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies and we look forward to working with all of you to lower the deficit,” the Senators wrote. “If we are to truly address our national debt, we will all have to tighten our belts and make sacrifices – even the most wealthy and powerful among us… The Big 5 oil companies have made nearly $1 trillion in profits in the last decade – and more than $30 billion of that in the first three months of this year alone. At the same time, many Americans are struggling to make ends meet, find a job, or fill their gas tanks with $4 per gallon gasoline. We simply cannot solve our budget problems by asking working class families to shoulder the burden alone.”

Full text of the letter is below:

Dear Colleague:

We are writing to ask that you consider cosponsoring S. 940, legislation we introduced this week to eliminate more than $21 billion in oil subsidies for the five largest, most profitable oil companies in the world.  It is encouraging that some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies and we look forward to working with all of you to lower the deficit.

If we are to truly address our national debt, we will all have to tighten our belts and make sacrifices – even the most wealthy and powerful among us.  The Big 5 oil companies have made nearly $1 trillion in profits in the last decade – and more than $30 billion of that in the first three months of this year alone.  At the same time, many Americans are struggling to make ends meet, find a job, or fill their gas tanks with $4 per gallon gasoline.  We simply cannot solve our budget problems by asking working class families to shoulder the burden alone.

Some have claimed that cutting $2 billion in annual oil subsidies to the Big 5 oil companies will somehow make oil and gasoline more expensive.  We all know this argument is false.  If we just compare the $2 billion in taxpayer subsidies to the projected $125 billion in profits the Big 5 oil companies are expected to make this year, it becomes very clear that repealing these subsidies would be only a small sacrifice for these companies.  If the Big 5 oil companies could live with just $123 billion in profits, they could pay their fair share in taxes, help lower the deficit, and not raise the price of gasoline.

Thank you for taking the time to consider cosponsoring our bill to eliminate more than $21 billion in oil subsidies for the Big 5 oil companies.  Please do not hesitate to contact either of us or our staff if you have any questions.  We look forward to working with you to lower the deficit in an equitable and effective manner.

Sincerely,

Senate Majority Leader Harry Reid

Senator Robert Menendez

Money Saved Would Reduce The Deficit By Tens of Billions

Washington, DC—Nevada Senator Harry Reid and New Jersey Senator Robert Menendez today sent a “Dear Colleague” letter to Senate Republicans asking them to cosponsor legislation that would reduce the deficit by ending wasteful taxpayer handouts to big oil companies making record profits while American families pay $4 at the pump.

The bill would eliminate more than $21 billion in subsidies for the five largest, most profitable oil companies in the world. Some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies.

“It is encouraging that some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies and we look forward to working with all of you to lower the deficit,” the Senators wrote. “If we are to truly address our national debt, we will all have to tighten our belts and make sacrifices – even the most wealthy and powerful among us… The Big 5 oil companies have made nearly $1 trillion in profits in the last decade – and more than $30 billion of that in the first three months of this year alone. At the same time, many Americans are struggling to make ends meet, find a job, or fill their gas tanks with $4 per gallon gasoline. We simply cannot solve our budget problems by asking working class families to shoulder the burden alone.”

Full text of the letter is below:

Dear Colleague:

We are writing to ask that you consider cosponsoring S. 940, legislation we introduced this week to eliminate more than $21 billion in oil subsidies for the five largest, most profitable oil companies in the world.  It is encouraging that some Republicans have publicly expressed a willingness to consider supporting legislation to cut wasteful subsidies for oil companies and we look forward to working with all of you to lower the deficit.

If we are to truly address our national debt, we will all have to tighten our belts and make sacrifices – even the most wealthy and powerful among us.  The Big 5 oil companies have made nearly $1 trillion in profits in the last decade – and more than $30 billion of that in the first three months of this year alone.  At the same time, many Americans are struggling to make ends meet, find a job, or fill their gas tanks with $4 per gallon gasoline.  We simply cannot solve our budget problems by asking working class families to shoulder the burden alone.

Some have claimed that cutting $2 billion in annual oil subsidies to the Big 5 oil companies will somehow make oil and gasoline more expensive.  We all know this argument is false.  If we just compare the $2 billion in taxpayer subsidies to the projected $125 billion in profits the Big 5 oil companies are expected to make this year, it becomes very clear that repealing these subsidies would be only a small sacrifice for these companies.  If the Big 5 oil companies could live with just $123 billion in profits, they could pay their fair share in taxes, help lower the deficit, and not raise the price of gasoline.

Thank you for taking the time to consider cosponsoring our bill to eliminate more than $21 billion in oil subsidies for the Big 5 oil companies.  Please do not hesitate to contact either of us or our staff if you have any questions.  We look forward to working with you to lower the deficit in an equitable and effective manner.

Sincerely,

Senate Majority Leader Harry Reid

Senator Robert Menendez

“Saving money requires a lot of difficult choices.  Which programs do we cut in tough times?  Which priorities are more important than others?  As we’ve seen here in the Senate and across the country over the last few months, a lot of people have a lot of different answers to those questions.

“Then there are the choices that aren’t so tough at all.  There’s clear waste in the federal budget and the tax code.  And then there’s Big Oil.  We’re giving billions and billions of dollars every year – $4 billion to be exact – every cent of it taxpayer money – to oil companies that already are more than successful.

“These oil companies made $36 billion in profits during the first quarter of this year alone.  Exxon made 70 percent more this year than last year.

“The industry’s $36 billion in quarterly profits means it’s making $12 billion a month.  That’s $4 billion a week.  And yet the U.S. government is giving these companies $4 billion a year in corporate welfare?

“Why are taxpayers on the hook for oil companies that are doing just fine on their own?

“If we’re serious about reducing the deficit, this is an easy place to start.  It’s a no-brainer.  Let’s use the savings from these taxpayer giveaways to drive down the deficit, not drive up oil company profits.

“Let’s make one thing clear: wasteful subsidies have nothing to do with gas prices.  These oil handouts have existed for decades.  Prices have continued to rise.  Oil executives’ paychecks have gone up too.  The $4 billion a gallon Americans are paying at the pump are not related to these subsidies – but those profits are proof enough that they don’t need them.

“Even Big Oil CEOs like the head of Shell, and Republicans in Congress including the Speaker of the House, have admitted that these subsidies aren’t necessary.

“Some of our conservative colleagues have a hard time stomaching giving a hand to those who need it the most.  We should all agree – in the interest of fairness, common sense, and saving taxpayer money – that we can cut out corporate welfare to those Big Oil firms who need it the least.”

$21 Billion Recouped Over 10 Years Will Go Toward Reducing The Deficit

Washington, D.C.– With the nation’s five largest oil companies taking home nearly $1 trillion in profits over the past decade, a group of Democratic Senators today announced legislation to finally put an end to the unfair tax subsidies that only benefit Big Oil’s bottom line and CEOs. As families are paying more than $4 per gallon in gas prices and doing their part to address the country’s growing deficit, Big Oil needs to step up to the plate and share in the sacrifice to help balance the budget.

U.S. Sens. Robert Menendez (D-NJ), Sherrod Brown (D-OH), Claire McCaskill (D-MO), and Jon Tester (D-MT) announced the introduction of the Close Big Oil Tax Loopholes Act, which will put an end to taxpayer handouts to the 5 largest oil companies making record profits, and use the  billions in savings to help reduce the deficit. The Senators also called on Republicans to support the effort to close the loopholes and join other Republicans, including Speaker Boehner and Representative Ryan, who have voiced support for cutting subsidies.

“At a time when families are feeling the pain at the pump and our deficit keeps growing at an alarming rate, we simply can’t afford to keep giving away billions in taxpayer handouts to oil companies that are doing nothing to help lower prices. The ‘Close Big Oil Tax Loopholes Act’ is based on a simple premise: we need everyone to do their share to lower the deficit, not just working families and the elderly,” Menendez said.

“It’s bad enough that Ohioans have to pay more than $4.00 a gallon at the gas pump. They shouldn’t need to subsidize the oil industry through the tax code as well. Big Oil is reaping big profits while working- and middle-class Ohioans struggle to make ends meet. It’s about time this corporate welfare meet its end,” Brown said.

“If we are going to get serious about addressing our national debt,  we can no longer afford to keep giving away taxpayer’s money to the most profitable companies in the world. There are going to be some tough decisions when it comes to cutting back, but I hope we can agree that our government writing checks to oil and gas companies with tax dollars should be on the chopping block,” McCaskill said.

“For years, the world’s biggest oil companies have slipped their way through every loophole in the book to pad their profits at the expense of American taxpayers,” Tester said.  “This bill restores fairness and holds these corporations accountable to taxpayers, who deserve no less.”

According to a recent report from Citizens for Tax Justice, Big Oil companies spent most of their profits in the purchase of their own stocks and boosting its dividends between 2005-2010. In 2010, four of the largest “Big Five” oil companies (excluding BP due to the oil spill) allocated only 18 percent of their post tax profits on exploration and 60 percent on dividends and stock repurchases. Link to the full Report: http://www.ctj.org/pdf/energy20110429.pdf

Summary of the bill:

Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers.

U.S. taxpayers are taxed on their income worldwide, but are entitled to a dollar-for-dollar tax credit for any income taxes paid to a foreign government.  U.S. oil and gas companies have been accused of disguising royalty payments to foreign governments as foreign taxes.  This allows them to lower their taxes in the U.S.  The bill would close this loophole that amounts to a U.S. subsidy for foreign oil production for the Big 5.

Limitation on deduction for income attributable to the production of oil, natural gas, or primary products thereof.

In 2004 Congress enacted Section 199, the domestic manufacturing tax deduction.  In 2008 Congress froze the Section 199 deduction at 6% for all oil and gas activity.  The bill eliminates the Section 199 deduction for the Big 5.

Limitation on deduction for intangible drilling and development costs.

Would deny the Big 5 oil companies the option of expensing Intangible Drilling Costs (IDCs) and require such costs be capitalized. IDCs are expenditures such as wages, fuel, repairs, hauling, and supplies necessary for the drilling of oil wells. Currently, integrated oil companies can expense 70% of the cost of IDCs.  The bill requires the Big 5 to capitalize all of its IDC costs.

Limitation on percentage depletion allowance for oil and gas wells.

Firms that extract oil and gas are permitted a deduction to recover their capital investment under one of two methods.  Cost depletion allows for the recovery of the actual capital investment—the costs of discovering, purchasing, and developing the well—over the period the well produces income.  Under this method, the taxpayer’s total deductions cannot exceed its original investment.

Percentage depletion allows the cost recovery to be computed using a percentage of the revenue from the sale of the oil or gas.  Under this method, total deductions could (and often do) exceed the taxpayer’s capital investment.  The bill repeals percentage depletion for the Big 5.

Limitation on deduction for tertiary injectants.

Tertiary injectants are used in enhanced oil recovery to drive more oil from an existing well.  Currently, oil companies are allowed to deduct the cost of tertiary injectants rather than capitalizing their costs and recovering them over time. The bill requires the Big 5 to capitalize the cost of tertiary injectants it uses during the year and recover those costs over time.

Repeal of Outer Continental Shelf deep water and deep gas royalty relief

Repeals Sections 344 and 345 of the Energy Policy Act of 2005.  Section 344 extended existing deep gas incentives and Section 345 provided additional mandatory royalty relief for certain deepwater oil and gas production.  These changes will help ensure that Americans receive fair value for Federally-owned fossil fuel resources.

Deficit Reduction

All savings realized as the result of the bill’s elimination of the tax breaks and other subsidies currently going to the major integrated oil companies are devoted to deficit reduction.

$21 Billion Recouped Over 10 Years Will Go Toward Reducing The Deficit

Washington, D.C.– With the nation’s five largest oil companies taking home nearly $1 trillion in profits over the past decade, a group of Democratic Senators today announced legislation to finally put an end to the unfair tax subsidies that only benefit Big Oil’s bottom line and CEOs. As families are paying more than $4 per gallon in gas prices and doing their part to address the country’s growing deficit, Big Oil needs to step up to the plate and share in the sacrifice to help balance the budget.

U.S. Sens. Robert Menendez (D-NJ), Sherrod Brown (D-OH), Claire McCaskill (D-MO), and Jon Tester (D-MT) announced the introduction of the Close Big Oil Tax Loopholes Act, which will put an end to taxpayer handouts to the 5 largest oil companies making record profits, and use the  billions in savings to help reduce the deficit. The Senators also called on Republicans to support the effort to close the loopholes and join other Republicans, including Speaker Boehner and Representative Ryan, who have voiced support for cutting subsidies.

“At a time when families are feeling the pain at the pump and our deficit keeps growing at an alarming rate, we simply can’t afford to keep giving away billions in taxpayer handouts to oil companies that are doing nothing to help lower prices. The ‘Close Big Oil Tax Loopholes Act’ is based on a simple premise: we need everyone to do their share to lower the deficit, not just working families and the elderly,” Menendez said.

“It’s bad enough that Ohioans have to pay more than $4.00 a gallon at the gas pump. They shouldn’t need to subsidize the oil industry through the tax code as well. Big Oil is reaping big profits while working- and middle-class Ohioans struggle to make ends meet. It’s about time this corporate welfare meet its end,” Brown said.

“If we are going to get serious about addressing our national debt,  we can no longer afford to keep giving away taxpayer’s money to the most profitable companies in the world. There are going to be some tough decisions when it comes to cutting back, but I hope we can agree that our government writing checks to oil and gas companies with tax dollars should be on the chopping block,” McCaskill said.

“For years, the world’s biggest oil companies have slipped their way through every loophole in the book to pad their profits at the expense of American taxpayers,” Tester said.  “This bill restores fairness and holds these corporations accountable to taxpayers, who deserve no less.”

According to a recent report from Citizens for Tax Justice, Big Oil companies spent most of their profits in the purchase of their own stocks and boosting its dividends between 2005-2010. In 2010, four of the largest “Big Five” oil companies (excluding BP due to the oil spill) allocated only 18 percent of their post tax profits on exploration and 60 percent on dividends and stock repurchases. Link to the full Report: http://www.ctj.org/pdf/energy20110429.pdf

Summary of the bill:

Modifications of foreign tax credit rules applicable to major integrated oil companies which are dual capacity taxpayers.

U.S. taxpayers are taxed on their income worldwide, but are entitled to a dollar-for-dollar tax credit for any income taxes paid to a foreign government.  U.S. oil and gas companies have been accused of disguising royalty payments to foreign governments as foreign taxes.  This allows them to lower their taxes in the U.S.  The bill would close this loophole that amounts to a U.S. subsidy for foreign oil production for the Big 5.

Limitation on deduction for income attributable to the production of oil, natural gas, or primary products thereof.

In 2004 Congress enacted Section 199, the domestic manufacturing tax deduction.  In 2008 Congress froze the Section 199 deduction at 6% for all oil and gas activity.  The bill eliminates the Section 199 deduction for the Big 5.

Limitation on deduction for intangible drilling and development costs.

Would deny the Big 5 oil companies the option of expensing Intangible Drilling Costs (IDCs) and require such costs be capitalized. IDCs are expenditures such as wages, fuel, repairs, hauling, and supplies necessary for the drilling of oil wells. Currently, integrated oil companies can expense 70% of the cost of IDCs.  The bill requires the Big 5 to capitalize all of its IDC costs.

Limitation on percentage depletion allowance for oil and gas wells.

Firms that extract oil and gas are permitted a deduction to recover their capital investment under one of two methods.  Cost depletion allows for the recovery of the actual capital investment—the costs of discovering, purchasing, and developing the well—over the period the well produces income.  Under this method, the taxpayer’s total deductions cannot exceed its original investment.

Percentage depletion allows the cost recovery to be computed using a percentage of the revenue from the sale of the oil or gas.  Under this method, total deductions could (and often do) exceed the taxpayer’s capital investment.  The bill repeals percentage depletion for the Big 5.

Limitation on deduction for tertiary injectants.

Tertiary injectants are used in enhanced oil recovery to drive more oil from an existing well.  Currently, oil companies are allowed to deduct the cost of tertiary injectants rather than capitalizing their costs and recovering them over time. The bill requires the Big 5 to capitalize the cost of tertiary injectants it uses during the year and recover those costs over time.

Repeal of Outer Continental Shelf deep water and deep gas royalty relief

Repeals Sections 344 and 345 of the Energy Policy Act of 2005.  Section 344 extended existing deep gas incentives and Section 345 provided additional mandatory royalty relief for certain deepwater oil and gas production.  These changes will help ensure that Americans receive fair value for Federally-owned fossil fuel resources.

Deficit Reduction

All savings realized as the result of the bill’s elimination of the tax breaks and other subsidies currently going to the major integrated oil companies are devoted to deficit reduction.

Money Saved By Revoking Handouts Will Go Towards Reducing The Deficit

Washington, DC—Nevada Senator Harry Reid and New Jersey Senator Robert Menendez today urged Senate colleagues to join them in ending wasteful taxpayer handouts to big oil companies making record profits while American families make sacrifices to afford rising prices at the pump, and use the savings to reduce the deficit.

Over the last decade, the nation’s five largest oil companies have taken home nearly $1 trillion in profits and tens of billions of dollars in taxpayer subsidies. Every year, taxpayers are giving away more than $4 billion to oil companies in the form of tax deductions, subsidies and royalty relief, the letter says. Meanwhile, they’ve hiked gas prices to $4.00 a gallon in some states.

And CEOs from the Big 5 oil companies have testified that they do not need incentives for oil exploration. And even Speaker John Boehner and Rep. Paul Ryan have said it is time to look at cutting oil subsidies.

“Every one of us is hearing from families back home who are struggling with rising gas prices. At the same time, we’re reading this week about the record-breaking profits that the major oil companies are raking in– more than $30 billion in profits for the first quarter of 2011 alone. Something just doesn’t add up.  Now that the five biggest oil companies have become some of the most profitable companies in the world, taxpayers shouldering $4 a gallon gas prices should not have to foot the bill for tens of billions of outdated, unnecessary subsidies that go straight into the pockets of oil industry executives particularly in light of our increasing deficit. Just as we ask families to do their part to help reduce the deficit, Big oil companies need to step up to the plate and share in the sacrifice.”

The senators believe it is time to work on a bipartisan basis to ask oil companies to pay their fair share and help us lower the deficit.

“By working together to end these wasteful giveaways to oil companies, we will not only make the tax code more fair, but we will decrease the federal deficit by tens of billions of dollars over the next ten years,” they wrote. “To a family struggling to pay rising gas prices, this is not a partisan or political issue – this is an economic issue. In the nature of bipartisanship, let’s work together to put the needs of middle-class families over the whims of the most profitable industry in the world.”

Full text of the letter is below:

Dear Colleague,

Every one of us is hearing from families back home who are struggling with rising gas prices. At the same time, we’re reading this week about the record-breaking profits that the major oil companies are raking in– more than $30 billion in profits for the first quarter of 2011 alone. Something just doesn’t add up.  Now that the five biggest oil companies have become some of the most profitable companies in the world, taxpayers shouldering $4 a gallon gas prices should not have to foot the bill for tens of billions of outdated, unnecessary subsidies that go straight into the pockets of oil industry executives particularly in light of our increasing deficit. Just as we ask families to do their part to help reduce the deficit, Big oil companies need to step up to the plate and share in the sacrifice.

Every year, taxpayers are giving away more than $4 billion to oil companies in the form of tax deductions, subsidies and royalty relief. It has always been questionable whether or not these subsidies for oil companies do anything to encourage new production, and it is especially questionable at a time when oil companies are reporting record profits.  The fact is, oil companies will continue to drill and produce oil with or without these subsidies. Testifying before the Senate in 2005, every CEO of the five biggest oil companies acknowledged that they do not need incentives to explore for oil and gas. And just this year, the former CEO of Shell Oil said “subsidies are not necessary.”

Last week, we were encouraged to hear some of our Republican colleagues, including Speaker Boehner, say that big oil companies “ought to be paying their fair share.” We could not agree more. Closing these loopholes will not raise gas prices for American consumers. Historically, gas prices have risen even as the major oil companies reap billions in tax subsidies that have outlived their usefulness, and there is scant evidence that ending these subsidies will have any effect on how oil and gas are priced in the global market.

In the Senate, we will act imminently to close these loopholes. Given the unprecedented number of lawmakers who have stepped forward in support of this idea for the first time, we believe this new push to end oil subsidies has a strong chance to succeed where previous efforts have failed. We invite ideas from both sides of the aisle about how best to bring these wasteful giveaways to an end. We intend to proceed with a bill that maximizes our chances of garnering bipartisan appeal.

By working together to end these wasteful giveaways to oil companies, we will not only make the tax code more fair, but we will decrease the federal deficit by tens of billions of dollars over the next ten years.

To a family struggling to pay rising gas prices, this is not a partisan or political issue – this is an economic issue. In the nature of bipartisanship, let’s work together to put the needs of middle-class families over the whims of the most profitable industry in the world.

Sincerely,

Senate Majority Leader Harry Reid

Senator Robert Menendez

Money Saved By Revoking Handouts Will Go Towards Reducing The Deficit

Washington, DC—Nevada Senator Harry Reid and New Jersey Senator Robert Menendez today urged Senate colleagues to join them in ending wasteful taxpayer handouts to big oil companies making record profits while American families make sacrifices to afford rising prices at the pump, and use the savings to reduce the deficit.

Over the last decade, the nation’s five largest oil companies have taken home nearly $1 trillion in profits and tens of billions of dollars in taxpayer subsidies. Every year, taxpayers are giving away more than $4 billion to oil companies in the form of tax deductions, subsidies and royalty relief, the letter says. Meanwhile, they’ve hiked gas prices to $4.00 a gallon in some states.

And CEOs from the Big 5 oil companies have testified that they do not need incentives for oil exploration. And even Speaker John Boehner and Rep. Paul Ryan have said it is time to look at cutting oil subsidies.

“Every one of us is hearing from families back home who are struggling with rising gas prices. At the same time, we’re reading this week about the record-breaking profits that the major oil companies are raking in– more than $30 billion in profits for the first quarter of 2011 alone. Something just doesn’t add up.  Now that the five biggest oil companies have become some of the most profitable companies in the world, taxpayers shouldering $4 a gallon gas prices should not have to foot the bill for tens of billions of outdated, unnecessary subsidies that go straight into the pockets of oil industry executives particularly in light of our increasing deficit. Just as we ask families to do their part to help reduce the deficit, Big oil companies need to step up to the plate and share in the sacrifice.”

The senators believe it is time to work on a bipartisan basis to ask oil companies to pay their fair share and help us lower the deficit.

“By working together to end these wasteful giveaways to oil companies, we will not only make the tax code more fair, but we will decrease the federal deficit by tens of billions of dollars over the next ten years,” they wrote. “To a family struggling to pay rising gas prices, this is not a partisan or political issue – this is an economic issue. In the nature of bipartisanship, let’s work together to put the needs of middle-class families over the whims of the most profitable industry in the world.”

Full text of the letter is below:

Dear Colleague,

Every one of us is hearing from families back home who are struggling with rising gas prices. At the same time, we’re reading this week about the record-breaking profits that the major oil companies are raking in– more than $30 billion in profits for the first quarter of 2011 alone. Something just doesn’t add up.  Now that the five biggest oil companies have become some of the most profitable companies in the world, taxpayers shouldering $4 a gallon gas prices should not have to foot the bill for tens of billions of outdated, unnecessary subsidies that go straight into the pockets of oil industry executives particularly in light of our increasing deficit. Just as we ask families to do their part to help reduce the deficit, Big oil companies need to step up to the plate and share in the sacrifice.

Every year, taxpayers are giving away more than $4 billion to oil companies in the form of tax deductions, subsidies and royalty relief. It has always been questionable whether or not these subsidies for oil companies do anything to encourage new production, and it is especially questionable at a time when oil companies are reporting record profits.  The fact is, oil companies will continue to drill and produce oil with or without these subsidies. Testifying before the Senate in 2005, every CEO of the five biggest oil companies acknowledged that they do not need incentives to explore for oil and gas. And just this year, the former CEO of Shell Oil said “subsidies are not necessary.”

Last week, we were encouraged to hear some of our Republican colleagues, including Speaker Boehner, say that big oil companies “ought to be paying their fair share.” We could not agree more. Closing these loopholes will not raise gas prices for American consumers. Historically, gas prices have risen even as the major oil companies reap billions in tax subsidies that have outlived their usefulness, and there is scant evidence that ending these subsidies will have any effect on how oil and gas are priced in the global market.

In the Senate, we will act imminently to close these loopholes. Given the unprecedented number of lawmakers who have stepped forward in support of this idea for the first time, we believe this new push to end oil subsidies has a strong chance to succeed where previous efforts have failed. We invite ideas from both sides of the aisle about how best to bring these wasteful giveaways to an end. We intend to proceed with a bill that maximizes our chances of garnering bipartisan appeal.

By working together to end these wasteful giveaways to oil companies, we will not only make the tax code more fair, but we will decrease the federal deficit by tens of billions of dollars over the next ten years.

To a family struggling to pay rising gas prices, this is not a partisan or political issue – this is an economic issue. In the nature of bipartisanship, let’s work together to put the needs of middle-class families over the whims of the most profitable industry in the world.

Sincerely,

Senate Majority Leader Harry Reid

Senator Robert Menendez

SPEAKER JOHN BOEHNER: Right. Listen, they’re gonna pay their fair share in taxes and they should… We’re in a time when– when the federal government is short on revenues. We need to control spending but we need to have revenues to keep the government movin’. And they oughta be payin’ their fair share

JONATHAN KARL: Well, the President’s proposed doing away with eight– eight different subsidies. This would be about $4 billion a year. You– you think that’s worth doin’?

SPEAKER JOHN BOEHNER: I think we gotta take a look at it.  [ABC News, 4/25/11]

Yet Senate Republican Leaders Have Opposed Repealing Oil and Gas Tax Breaks:

McConnell Called Repeal of Big Oil Company Tax Breaks “Mini-Van Tax.” McConnell said in a floor statement,  “At a time when increasing gas prices are already threatening our economic recovery a minivan tax that some on the other side have proposed won’t solve our nation’s fiscal crisis.”  [McConnell Floor Statement, 3/9/11]

·         McConnell Against Ending Subsidies For Oil Companies, Falsely Claims As A Tax Increase. In a statement McConnell says: “President Obama has proposed raising energy taxes of up to $90 billion over the next 10 years—most of which would be passed on to the consumer in the form of higher gas and electricity prices. The taxes could also slow down domestic oil production, enough to put up to 165,000 jobs in jeopardy over the next 10 years…Republicans have proposed two simple ideas that would provide real relief at the pump. First, we should seriously reform the rules and regulations holding America back from increased domestic energy production. And second, we should block any new regulations that would drive up the costs of energy production.” [Press Release, 4/22/11]

Cornyn In Favor Of Giving Billions In Subsidies To Oil Companies. Business Week reported that Cornyn, “Opposes the President’s efforts to repeal oil- and gas-industry tax breaks.” [Business Week, 4/07/11]

·         John Cornyn Claims Tax Hikes on Big Oil Will Result in Higher Prices Felt at Pump. Senator JOHN CORNYN (Republican, Texas): It may be fashionable to beat up on Big Oil and say, let’s tax the oil companies because they’re making too much money. But you know what, if we raise taxes on the oil companies, we all end up paying an increased price of gasoline at the pump. [NPR, 4/16/08]

“I agree with the President that it is long past time to end wasteful subsidies to big oil companies that are raking in record profits. If Senate Republicans are serious about cutting spending, as Democrats are, they’ll stop filibustering our efforts to eliminate corporate welfare that even a former Shell Oil CEO said is unnecessary.

“Rather than giving handouts to big corporations, we should be investing in clean energy development and construction here at home to create jobs, diversify our economy, break our dangerous dependence on oil and make our nation safer. As a bipartisan delegation of senators saw first-hand, China and other countries are aggressively investing in this industry for exactly those reasons. Abundant solar, wind and geothermal resources in Nevada and across the country combined with American know-how give our country the ability to be the world leader in clean energy. We should not lose our edge in this global competition just so Republicans can give even more taxpayer money to companies that don’t need it.”

Republican Budget Protects Nearly $44 Billion in Tax Loopholes and Subsidies For Oil and Gas Companies While Forcing Seniors To Pay the Same Amount in Additional Costs for their Prescription Drugs. The Republican budget protects $44 billion in unnecessary and expensive tax breaks and subsidies for oil and gas companies, even as oil companies are reporting record profits. Meanwhile, The Republican proposal would “re-open” the prescription drug donut hole and cost the average senior who falls into the donut hole approximately $11,794 between 2012 and 2020. Over that time, Ryan’s budget will cost seniors an estimated $44 billion in prescription drug costs, including $2.2 billion next year alone.  [Reuters, 2/1/10; OMB, FY12 Budget Proposal; HHS, 11/4/10; DPCC Report, 4/14/11; Republican Budget Proposal, 4/15/11].

Republican Plans To Dismantle Medicare and Provide Tax Giveaways to Big Oil and Gas Companies Extremely Unpopular With Americans. According to a new ABC/Washington Post survey, 84 percent of Americans oppose the Republican plan to privatize Medicare and force seniors to pay twice as much for their health care. Meanwhile, a February 2011 NBC / Wall Street Journal poll found that 74% of Americans support eliminating tax credits for the oil and gas industries in order to reduce the deficit. [ABC/Washington Post Poll, 4/20/11; NBC/Wall Street Journal Poll, February 2011]

Former Big Oil Executive: “Such Subsidies Are Not Necessary.” Large oil companies don’t need tax subsidies when oil prices are high, a former CEO of Shell Oil said in February. “In the face of sustained high oil prices it was not an issue—for large companies—of needing the subsidies to entice us into looking for and producing more oil,” John Hofmeister told National Journal Daily…“The fear of low oil prices drives some companies to say that subsidies should be sustained,” Hofmeister said. “And my point of view is that with high oil prices such subsidies are not necessary.” [National Journal, 2/11/11]

Study: “Oil Production Is Among the Most Heavily Subsidized Businesses.” “An examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process… According to the most recent study by the Congressional Budget Office, released in 2005, capital investments like oil field leases and drilling equipment are taxed at an effective rate of 9 percent, significantly lower than the overall rate of 25 percent for businesses in general and lower than virtually any other industry.” [New York Times, 7/4/10]

Biggest Oil Companies’ Profits Continue to Skyrocket. Exxon Mobil reported a 53 percent increase in its fourth-quarter 2010 profit. Exxon Mobil’s profit in the quarter was $9.25 billion compared with $6.05 billion in the period a year ago. Chevron’s fourth-quarter earnings surged 72 percent. Chevron reported a profit of $5.3 billion, up from $3.07 billion a year earlier. Royal Dutch Shell PLC reported that fourth quarter profit more than tripled from a year earlier. Fourth quarter net profit was $6.79 billion, up from $1.96 billion in the same period a year earlier. [New York Times, 1/31/11; Wall Street Journal, 1/28/11; Associated Press, 2/3/11]

Biggest Oil Companies Made Nearly $1 TRILLION in Profits Over the Last 10 Years. The big five oil companies—BP, Chevron, ConocoPhillips, ExxonMobil, and Shell—made a total profit of nearly $1 trillion over the past decade. [Center for American Progress, 1/31/11]

States Would Lose Hundreds of Billions of Dollars in Support For The Elderly, Families, and Those in Nursing Homes – Would Be Forced to Dramatically Raise Taxes or Cut Benefits

Protecting Tax Breaks for Oil Companies, Millionaires and Billionaires Should Not Be Prioritized Over Seniors and Middle Class Taxpayers

Washington, D.C. – The Democratic Policy and Communications Center (DPCC) today released new state-by-state reports that outline the devastating impact of House Budget Committee Chairman Paul Ryan’s (R-WI) budget proposal.  The report shows that, on top of ending Medicare, the GOP budget would cut $1.4 trillion in benefits for seniors, families and those in nursing homes, while shifting huge burdens to state governments.  With state governments across the country already cash-strapped, the reduced federal support and increased burdens included in the GOP proposal would require them to drastically slash benefits, increase taxes, or both.  Democrats are committed to reducing the deficit by eliminating wasteful subsidies and combating fraud and abuse in health care programs while protecting Medicaid and Medicare for seniors and families.

“These reports bring home the real world, brutal impact of the GOP’s reckless budget proposal,” said Senator Charles E. Schumer, Chairman of the Democratic Policy and Communications Center.  “The GOP budget pulls the rug out from under Americans who rely on Medicare and Medicaid, and shifts massive burdens to the states at a time when they have their own budget crisis to deal with, forcing them to dramatically raise taxes or cut benefits.”

The state-by-state reports can be found here: http://democrats.senate.gov/gop-medicaid-cuts/