WASHINGTON -- The unapologetic -- indeed combative -- testimony on Thursday by top oil executives summoned to defend multi-billion tax subsidies for their industry infuriated some Senate Democrats, one of whom accused the executives of being "profoundly out of touch" with average Americans.
The heads of the Big Five oil companies, currently enjoying a windfall from high oil prices, soundly rejected a Democratic request that they renounce $2 billion in tax breaks, declaring instead that they were entitled to every penny.
Exxon Mobil CEO Rex Tillerson called the attempt to roll back the subsidies "misinformed and discriminatory" and he issued a threat to the assembled members of the Senate Finance Committee: "You give me a different tax burden," he said, "I'm going to take my capital then, since the U.S. isn't attractive, I've got to go somewhere else."
It was all too much for Sen. Jay Rockefeller (D-W.Va.).
"I get the feeling that it's almost like you're -- like the five of you are like Saudi Arabia. That you're caught up in your profits, you're highly defensive, you yield on nothing," he said. "I think you're out of touch. Deeply, profoundly out of touch. And deeply and profoundly committed to sharing nothing."
Congress is facing enormous pressure to make deep cuts in essential government programs, in order to reduce the budget deficit. Americans are struggling to make ends meet -- a struggle made dramatically worse by high gas prices. Meanwhile, the Big Five oil companies -- Exxon Mobil, BP, Shell, Chevron, and ConocoPhillips -- made about $34 billion in profits in the first three months of 2011, up 42 percent from a year ago.
"The nature of your life, the nature of your international travel, the nature of the size of your profits -- I don't think you have any idea what the size of your profits does to the American people's willingness to accept what you have to say," Rockefeller said.
"I think the main reason that you're out of touch, particularly with respect to Americans, and the sacrifices that we're having to look at here in terms of try to balance -- trying to come close to balancing the budget -- is that you never lose," Rockefeller said to the executives. "You've never lost. You always prevail. You always prevail in the halls of Congress, and you do that for a whole variety of reasons, because of your lobbyists, because of your friends, because of all the places where you do business. And I don't really know any other business that never loses," he said.
"I've just never seen any industry so successful, so constantly successful. I think you all have a great sense of assurance as you are sitting there. ... I don't think you feel threatened by anything that's going on here, and I don't know necessarily that you have any reason to feel threatened, because of the way votes line up in this present Congress.
"I haven't heard anybody say what they would be willing to do to share in our budget problem and in the total concept of what keeps America together, and that is essentially fairness. That everybody has to lose at some time. That everybody has to give something up for us to be a real country."
Democrats, starting with President Obama, have seized on oil subsidies as a potent political issue. This week, three senators unveiled legislation that would strip the Big Five of about $21 billion in tax breaks over the next decade.
"Businesses should make a profit -- that's what drives our economy -- but do these very profitable companies actually need taxpayer subsidies?" asked Senate Finance Committee Chairman Max Baucus (D-Mont.), as he kicked off Thursday's hearing. "Energy incentives should help us build the energy future we want to see -- not pad oil company profits."
Rockefeller's pessimism about the repeal's chances may be well-founded. Senate Majority Leader Harry Reid said he intends to schedule a vote on the measure next week, but no Republicans have shown any indication that they'll vote for it -- and two "oil patch" Democrats declared their opposition on Wednesday as well.
"My guess is that there aren't 60 votes to pass it," Sen. Tom Carper (D-Del.) told the executives. But, he said, "when the vote occurs next week and we don't get 60 votes for Senator Menendez's proposal, that shouldn't be the end of the conversation."
Partisan battle lines were clearly drawn from the start of Thursday's hearing, when Sen. Orrin Hatch (R-Utah), the ranking member of the committee, accused Democrats of wanting to increase gas prices, then illustrated his view of the hearing by unveiling a photograph of a dog standing on a pony.
Banter ensued, followed by Hatch's declaration: "I know who the hores's ass is."
Sen. Chuck Schumer (D-N.Y.) was particularly pointed in his interrogation of ConocoPhillips CEO Jim Mulva, whose company on Wednesday described the Democratic subsidy rollback as "un-American."
Schumer demanded an apology. He didn't get one.
Describing the trade-offs the budget committee will be making, he asked Mulva, "Do you think that your subsidy is more important that the financial aid that we give to students to go to college?"
Mulva did not give a direct answer.
Sen. Ron Wyden (D-Ore.) brought a video clip from a November 2005 hearing, where he asked oil executives whether or not they agreed with then-President George W. Bush's assertion that "with $55 [a barrel] oil we don't need incentives to oil and gas companies to explore. There are plenty of incentives."
Back then, the executives had all agreed.
"Gentlemen, you all have done, as major oil companies, a dramatic about-face this morning," Wyden said. "In 2005 -- you were there, Mr. Mulva -- all of you said you did not need tax incentives to drill for oil. And today you come to say you've got to have them when oil is at $100 a barrel. I just think that position defies common sense."
John Watson, CEO of Chevron, told the panel: "I am an advocate for developing all forms of energy and using energy more wisely," he said. "But it is wrong to increase taxes on oil and gas companies to subsidize other forms of energy."
Furthermore, he said: "Singling out five companies because of their size is even more troubling. Such measures are anticompetitive and discriminatory. ... Don't punish our industry for doing its job well."
Watson also warned that his company could shift its investment strategy. "To the extent that taxes are higher in the United States, we'll look elsewhere," he said.
"The real question is not can we afford more taxes," said Tillerson. "The real question is what do these tax changes mean to that next incremental investment decision that we're going to make."
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Dan Froomkin is senior Washington correspondent for the Huffington Post. You can send him an e-mail, bookmark his page; subscribe to his RSS feed, follow him on Twitter, friend him on Facebook, and/or become a fan and get e-mail alerts when he writes.