Democrats fail to end Big Oil tax breaks

WASHINGTON — Senate Democrats tried Tuesday to channel public anger at $4-a-gallon gasoline into passing a bill to repeal federal tax breaks and subsidies for five major oil companies, but they fell short.

After bashing Big Oil in a hearing last week, Senate Democrats mustered fewer than the 60 votes they needed under Senate rules to move the bill to a final vote. The final count was 52- 48. Three Democrats — Sens. Mary Landrieu of Louisiana, Mark Begich of Alaska and Ben Nelson of Nebraska — voted against the measure. Only two Republicans — Maine Sens. Olympia Snowe and Susan Collins — voted for the bill.

Tuesday's action effectively kills the bill, which framed symbolically the different strategies that congressional Democrats and Republicans prefer for reducing budget deficits, confronting energy-policy choices and appealing for voters' favor.

Striking a populist pose, Democrats argued that Big Oil has huge profits and doesn't need tax breaks, even though ending them wouldn't cut deficits much. The Big Five oil companies' profits totaled about $35 billion in this year's first quarter. Ending their tax breaks would cost them about $21 billion over 10 years. The federal budget deficit is projected to be about $1.4 trillion this year, and about $7 trillion over 10 years.

"Everyone in this chamber: Are you on the side of working-class families or are you on the side of Big Oil?" said Sen. Robert Menendez, D-N.J., who authored the bill. "There are lots of ways to cut the deficit. Many in the other body (the House of Representatives), they want to end Medicare and cut student loan programs. What I and my co-sponsors want to do is end wasteful oil tax breaks for a wealthy industry that does not need them."

Republicans said the breaks spur domestic oil production. They prefer to cut other spending, such as Medicare and Medicaid, whose sky-rocketing costs fuel much of projected future federal deficits.

The Democratic bill would have stripped tax breaks from five major oil companies — ExxonMobil, ConocoPhillips, BP America, Shell Oil Co. and Chevron Corp.

A report last week by Congress's Joint Economic Committee said that eliminating or modifying some oil company tax breaks would generate $21 billion to the Treasury over a 10-year period.