WASHINGTON — Amid rising public anger over high gasoline prices, top executives of major oil companies on Thursday defended their actions at a Capitol Hill hearing and fought to block a Democratic effort to scale back their tax breaks.
The Senate Finance Committee asked the heads of the five largest oil companies to testify about proposals to repeal tax breaks. The executives of Exxon Mobil, Shell, ConocoPhillips, BP America and Chevron appeared and immediately found themselves in the expected hot seats.
"Given profits of $35 billion in just the first quarter alone, it's hard to find evidence that repealing these subsidies would cut domestic production or cause layoffs," Sen. Max Baucus, D-Mont., chairman of the committee, lectured the oilmen.
"Don't punish our industry for doing its job well," Chevron Corp. CEO John Watson said.
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Rising energy prices have become a key economic issue, threatening the current recovery, as well as a political one. Democrats have called for end to the tax breaks as a way of generating income to close federal budget deficits, which has become a key GOP demand as the nation moves along in the 2012 election cycle. House Republicans have generally opposed ending the breaks because they view them as a tax increase.
The executives argued that scaling back their tax breaks would unfairly single out their industry and hamper their ability to pursue new energy exploration, jeopardizing jobs and perhaps leading to higher prices. They also contended their companies weren't to blame for high gas prices.
Democratic senators are pushing to scale back $2 billion a year in tax breaks to the five major oil companies and steer the savings into reducing the federal deficit, an effort aimed at winning the support of budget-cutting Republicans for the measure.
But the measure faces resistance not only from many Republicans who say the tax incentives are necessary to encourage domestic oil production but from oil-state Democrats.
Previous efforts to scale back industry subsidies have been defeated in the face of heavy lobbying by the oil and gas industries, which spent more than $145 million and employed 798 lobbyists to influence lawmakers last year, according to the Center for Responsive Politics, a nonpartisan watchdog group.