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Posted at 12:40 PM ET, 02/11/2011

In budget knife fight, Democrats attack GOP soft spot: Big Oil

By Darryl Fears

Updated, 12:40 p.m. Friday

House Republicans this week proposed to cut $40 billion from the EPA and social programs, hitting Democrats where it hurts. Not surprisingly, Democrats swung back Thursday, targeting a Republican soft spot: Big Oil.

Rep. Earl Blumenauer (D-Ore.) introduced a bill that would drain oil companies of $40 billion in federal tax breaks over the next five years. At least six other Democrats joined him, including Reps. Ed Markey of Massachusetts, Lois Capps of California, John Conyers of Michigan and Peter Welch of Vermont.

"I think this is something consistent with what you're hearing in both parties," said Blumenauer, who has no GOP co-sponsors. "People are concerned with spending money that is unnecessary. This is pretty clearly a collection of tax preferences that make no discernible impact on the American consumer or on the behavior of the large oil companies, except that they have more money in profit."

The so-called "Ending Big Oil Tax Subsidies Act" targets the top five oil companies: BP, Chevron, ExxonMobil, Shell and Conoco-Phillips. The companies enjoy rich profits and need no government assistance, the bill says.

"As this takes shape, I plan on bringing this up as we're dealing with tax reform on the Ways and Means Committee," Blumenauer said.

Blumenauer would not call the bill's introduction an act of revenge. But it came a day after House Republicans proposed cutting 17 percent from the EPA's budget, trimmed programs that would result in taking 4,500 police officers off the streets, gutted President Obama's high-speed rail initiative and cut 10 percent from a program that feeds low-income women and their children.

Republicans are threatening to cut even more to reach a GOP goal of cutting federal spending by $100 billion. House Republicans countered that tax breaks for oil companies produce more American jobs.

When considering slashing tax breaks for energy companies, every program should be on the table, including wind power, said Rep. Ed Whitfield (R-Ky.), chair of the energy and power subcommittee. "Singling out on one specific source may result in higher fuel prices at a time when American families cannot afford it," Whitfield said.

Blumenauer said oil companies are profitable and the jobs are secure. "As people see the pretty dramatic cost, eliminating... things they care about, this type of thing will look more and more appealing," Blumenauer said.


By Darryl Fears  | February 11, 2011; 12:40 PM ET
 
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