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Sen. Claire McCaskill urges end to oil company tax breaks

Friday, May 13, 2011 | 4:56 p.m. CDT

KANSAS CITY — Sen. Claire McCaskill said Friday a proposal to end some $2 billion in tax subsidies to the world's five largest oil companies should be the easiest bill ever passed by the Congress.

The Missouri Democrat co-sponsored a measure announced earlier this week aimed at ending subsidies and using the money for deficit reduction.

During a news conference Friday at a gas station at a busy downtown Kansas City intersection, McCaskill said she believes the bill will get a vote on the Senate floor within the next month.

"These are the most profitable companies in the world," she said. "If we cannot take away federal tax dollars from corporations that are as successful as these, then what chance do we have of cleaning up the tax code and all of the other goodies that are there?"

The bill, also co-sponsored by Sen. Robert Menendez, D-N.J., and Sherrod Brown, D-Ohio, would cut off subsidies such as a deduction originally intended to boost manufacturing. It would close a loophole that effectively allows oil companies to shield themselves from taxes by deducting royalties paid to foreign governments.

Oil executives testified this week that eliminating the subsidies could result in the loss of thousands of jobs and higher prices at the pump. McCaskill said the five companies — Shell Oil, Exxon Mobil, BP, Chevron and ConocoPhillips — fiercely oppose the bill despite being on track to make an estimated $125 billion in profits this year.

"What are they going to say, that it's a good idea to take billions of dollars in corporate welfare away from us?" she said. "Of course they're going to fight this. They're going to fight it with everything they've got. It's free money to them. We'll see who wins."

Republicans, including Missouri's Roy Blunt, and a small number of Democrats oppose the bill because they said they believe oil companies will raise prices to offset the loss in subsidies. Blunt's office issued a statement Friday saying there are alternatives to pulling back the subsidies, including increased domestic production.

"Sen. Blunt disagrees that raising taxes on American energy production will lower gas prices or create much-needed jobs," said Blunt spokeswoman Amber Marchand. "Instead, he believes that we should address the deficit and increase our nation's access to affordable fuel by tapping into America's vast energy resources and expanding domestic exploration, which would provide approximately $150 billion in revenue, create over 500,000 jobs, and increase production by 4 billion barrels per day."

McCaskill said she didn't think taking away the subsidies would have any impact on gas prices or jobs. She said a Senate vote will show whether the Republican Party "stands with taxpayers or if they're going to stand with the oil companies."

"Here's the bottom line. If we are going to be serious about the deficit, if we are going to be serious about our debt, can we really afford to give taxpayer money away to the most profitable companies in the history of the planet?" she said. "We can't afford that kind of corporate welfare."

 


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