US Senate Defeats Bid to End Subsidies to Largest Oil Cos

US Senate Defeats Bid to End Subsidies to Largest Oil Cos

WASHINGTON - Senate Republicans united to block a Democratic attempt to end roughly $20 billion in federal subsidies to the largest oil and gas companies, in a largely political vote that had little chance of being approved by the divided Senate.

The bill would have affected subsidies paid to BP PLC, Exxon Mobil Corp., Royal Dutch Shell PLC, Chevron Corp. and ConocoPhillips.

The Senate voted 51 to 47, mostly along party lines. Even though a majority of senators approved the legislation, it fell short of the 60-vote requirement to pass it.

Four Democrats--Sens. Mark Begich of Alaska, Mary Landrieu of Louisiana, Ben Nelson of Nebraska and Jim Webb of Virginia--joined with most Republicans in opposing ending the subsidies. Maine Republican Sens. Susan Collins and Olympia Snowe voted with Democrats in supporting banning them.

Democrats had proposed redirecting some of the money that would be saved by the taxpayer to renew a series of lapsed tax credits aimed at manufacturers of solar panels, wind turbines and electric cars. Those credits ran out at the end of last year, and the renewable-energy industry has been clamoring for Congress to renew them.

The remaining $9 billion would have been used towards paying down the budget deficit.

The effort by Democrats was a political gesture aimed at highlighting Republicans' support for the biggest oil companies at a time when people are struggling to afford gasoline at the pumps.

For their part, Republicans criticized Democrats for what they called a tax increase on oil companies at a time when prices at the pump are rapidly escalating. According to the auto club AAA, the average price of a gallon of gasoline stood at $3.92 on Thursday. Many experts have predicted that the average price could hit $5 by the summer months.

"Is this really the best we have to offer folks who are staring at $4 a gallon of gas," Senate Minority Leader Mitch McConnell (R., Ky.) said. "A bill that even Democrats admit won't have anything to do with the price of gasoline?"

Democrats pointed to the fact that the five largest oil companies reported a combined $140 billion in profits in 2011. They argued that ending unnecessary taxpayer subsidies would have no effect on the price of gasoline.

President Barack Obama and congressional Democrats have sought to end the payments since he took office, although they have been consistently blocked by Republicans.

On Thursday, the president reiterated his call for the end of the subsidies shortly before the Senate voted.

"Right now, the biggest oil companies are raking in record profits--profits that go up every time folks pull up into a gas station," President Obama said from the White House Rose Garden. "You're already paying a premium at the pump right now. And on top of that, Congress up until this point has thought it's a good idea to send billions more of your tax dollars to the oil industry."

Copyright (c) 2012 Dow Jones & Company, Inc.

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Tim Fournier | Mar. 31, 2012
If the President was sincere about his goal, he wouldnt throw down a challenge but would lead and work with Congress.

Brian | Mar. 31, 2012
So you tax the companies and then give them subsidies... only makes sense in government!

Mike Acerra | Mar. 30, 2012
It is a shame that the GOP and four Democratic Senators, that should be ashamed of themselver and their vote, have allowed this to happen again! Shame, shame, shame! Mike, NJ

Joie Folkers | Mar. 30, 2012
Hooray for the Senate. They got one right this time. There are lots of reports about oil company profits, but you never see reports of the taxes the oil companies are paying already, or how much capital is invested to generate those profits. Oil companies pay more in taxes than they make in profits. Return on Assets for these companies is a respectable percentage, but nothing extraordinary.

Qunn Nichols | Mar. 30, 2012
If you were to put a price on each dead soldier as to how much it would cost to raise or support his or her family independently to the penny for a lifetime would the companies exact their pay. Calculators always have an off button at the end of the day,interest does not,what is paid by those forgotten?

Bev | Mar. 30, 2012
I could be totally incorrect but, I believe gas prices are directly linked to the commodities market. Therefore, it is NOT the oil & gas companies driving these prices. The general public is not aware of the items they touch daily that are a direct result of O&G production.

Eldin Burns | Mar. 30, 2012
These were not subsidies they were trying to stop but legitimate tax breaks given to every company in this country. This is purely a political move attempting to cast blame for the gasoline prices. Frankly we should all feel insulted that Congress thinks the citizenry of this country is stupid enough to believe this rhetoric.

Sam Edwards | Mar. 29, 2012
The president should realize by now, that we are not living in a democracy....but a capitalist, corporate dictatorship. The Golden rule...the ones with the Gold ...make the rules....who lobbys for the middle class????...and that is who pays for everyone...rich and poor ,while trying to etch out a meager living for himself. This planet will never survive unless we exchange the love of power for the power of love.....Jimmy Hendricks.

Wayne Bryant | Mar. 29, 2012
End the subsidy to oil companies

Herman | Mar. 29, 2012
Obama wants the prices to go down but you keep adding fuel to the fire;by raising to taxes,adding regulations,etc.Please backup and look at the picture again you fighting against yourself.


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