Just what Big Oil needed: another victory. First, Congress fails to pass legislation that would respond to last summer's catastrophic oil spill in the Gulf of Mexico. Then, President Barack Obama announces that his administration will expand offshore drilling, which means more money for the oil industry.
But now, despite overwhelming public support, the US Senate has failed to pass the Close Big Oil Tax Loopholes Act (S. 940), which would have repealed tens of billions of dollars in tax breaks for oil and gas companies over the next decade.
Big Oil is racking up the victories while working families pay the price. Yet again Big Oil defies the odds and gets a minority of lawmakers to support its narrow agenda at the expense of the American public.
The oil industry has killed efforts to be fully liable for the messes it makes in offshore oil spills, and now it holds on to its coveted tax breaks, despite overwhelming evidence that they are no longer needed. What is desperately needed are investments in clean energy to reduce our dependence on oil and deficit reduction. But Big Oil can't be bothered to be a part of the solution. Instead, the industry uses its money and influence to keep its taxpayer handouts coming.
The big five oil companies – which in the last quarter racked up $36 billion in net profits – will continue to receive taxpayer money because many in the Senate have closer ties to those giant corporations than their own constituents.
It is worth noting that many of the same senators who tonight voted to defend billions of dollars in Big Oil perks have voted to cut critical services to the elderly and school children. Is this what they mean by “compassionate conservatism”?
Last week, the CEOs of the big five, who earn an average annual salary of $14.5 million, were on Capitol Hill whining about the need for their companies to continue receiving their taxpayer subsidies. Compare that to just five years ago – when oil was trading at $55 a barrel – when a number of executives from these companies admitted that the subsidies were not necessary and would not affect production. In fact, a recent report by the Congressional Research Service states that repealing certain tax credits won’t affect gas prices at all.
Since 2005, the largest five oil companies have spent nearly half a trillion dollars on stock buybacks and dividends. Clearly, they can afford to pay slightly more in corporate income taxes.
Each of Big Oil's big five corporations consistently are on the Fortune 500 list, and three of them snagged a spot last year in the list of the five most profitable companies. In 2010, oil companies spent more than $145 million on nearly 800 lobbyists whose job is to defeat bills like this one. Apparently it worked, even though it's not what voters want. Today, Public Citizen and our allies delivered more than 400,000 signatures to Senate leadership calling for the end to oil subsidies. And polls show that nearly three-quarters of Americans support eliminating tax credits for the oil and gas industries.
The profits and salaries of the Big Oil titans prove they don’t need financial support from taxpayers – the same people who are paying a fortune at the pump.
Congress should stop subsidizing this demonstrably profitable industry.