Republicans Who Opposed Oil Subsidies Are Now Hedging On Repeal

WASHINGTON -- Democrats trying to get political mileage out of their push to repeal multi-billion dollar subsidies to the thriving oil and gas industry are reminding balky Republicans that many of them have backed the idea before.

Senate Majority Leader Harry Reid's (D-Nev.) office released a video mash-up Friday showing several of those Republicans speaking out against the subsidies that Democrats want to cut. Under the bill, the $21 billion saved would be used to pay down the deficit.

The star of the video is House Speaker John Boehner (R-Ohio), who late last month refused to defend the subsidies in an ABC News interview. His one explicit statement -- that the big oil companies don't need to get oil depletion allowances -- wasn't exactly a concession, however, as they haven't received those allowances since 1975. Boehner's staff quickly walked back his comments.

WATCH:

But other Republicans featured in the video may have more explaining to do. The video shows a clip of Sen. Susan Collins of Maine arguing against subsidies on the Senate floor in 2008. A contemporaneous press release from the senator suggests using some of the proceeds for alternative energy.

And Sen. John Thune of South Dakota is shown in April 2006 declaring, "If, in fact, [oil companies] are making such enormous profits, then perhaps they don't need the support and the tax incentives that are given to them by the American taxpayer."

Another is Illinois Sen. Mark Kirk, who voted for repealing subsidies as a member of the House in 2007, and recently stuck by the idea.

The oil subsidies were the subject of a contentious Senate hearing on Thursday. Democrats show no sign of backing off the issue, which they consider a political winner. But a solid voting Republican block -- supported by a few "oil patch" Democrats -- means the subsidies appear safe in this Congress.

The Democrats' video leaves out a number of other GOP senators who have also backed repealing subsidies in the past -- and whose support could make passage of the repeal a close vote, at least in the Senate. A majority of the House is all but certain to oppose such a measure.

Besides Collins, Kirk and Thune, Sens. Chuck Grassley (R-Iowa), Orrin Hatch (R-Utah) Richard Lugar (R-Ind.), Lisa Murkowski (R-Alaska) and Olympia Snowe (R-Maine) also voted for an energy bill in 2007 that would have repealed some $22 billion in subsidies to pay for clean energy innovations. The oil subsidy portion of that bill was stripped before it passed the Senate.

Sen. Collins' spokesman Kevin Kelley was happy to note the senator's previous support for repealing subsidies, but said she was still reviewing the new proposal.

"While eliminating or reducing these tax breaks may be good tax policy and help with deficit reduction, the Democrats' proposal will have no impact on the price that consumers pay at the pump," Kelley wrote in an email. "By contrast, Senator Collins' work with Senator Ron Wyden and Senator Maria Cantwell to curb excessive speculation in the energy futures market would have an impact on oil prices."

A spokeswoman for Sen. Murkowski emphasized that her boss only voted for ending the oil subsidies once, in a procedural move, expecting she would try to stop the repeal later.

"Sen. Murkowski does not support singling out oil and gas companies for increased taxes," she added.

A spokeswoman for Hatch had a similar response, saying he only voted 'Yes" to the procedural vote, a 59 to 40 cloture vote that fell one short of the 60 needed to advance the bill. He does not support the Democrats' new repeal effort, she said.

The other senators' offices did not respond to email requests seeking to learn whether they would still favor repealing oil industry subsidies.

The industry is estimated to have earned some $1 trillion in profits over the last decade.

This story has been updated to include comment from Sens. Collins' and Murkowski's offices.

Comments

[bparker661]

09:17 PM on 05/23/2011

Loss of oil subsidies totals 1% of their profits, after All the bills are paid! And the record monies earned by Big Oil was profit -- after all the bills are paid! But what befuddles me is that Republicans call for smaller government, staying out of everyone's lives. But they want to legislate away pro choice and give money to corporations who make record-breaking profits. Oh, sorry, I forgot -- corporations are just like individuals according to a recent Supreme Court decision, so government can meddle with them all they want and be consistant. BTW, because corporations are virtually individuals now, they can give unlimited amounts in campaign contributions (free speech preservation); lining the Repugs pockets to keep the greed cycle going.

[mgrant33301]

06:53 AM on 05/16/2011

end corporate welfare and start taxing those companies making huge profits.
this is no joke, they need to pay their fare share, or there won't be customers any longer (in this country) when we are broke.

[wsmith3023]

10:43 AM on 05/16/2011

We pay those taxes. A corporation is just a financial spreadsheet: money in/money out. Despite what politicians wish us to believe, corporations are not people who sit on the beach smoking a cigar and drinking mai tais. A corporation is no more than your checkbook register. The profit goes to paying debts, buliding up the corporation and hiring employees. Oh yeah and giving dividends to share holders. That's us. Money that is taxed away from corporations is wasted on government bureaucracy.

[wsmith3023]

10:55 AM on 05/16/2011

$5 billion a year is a drop in the bucket. Last year ExxonMobil (largest US oil corporation) paid $28.5 billion in sales taxes (from our pocket straight to the government). They also paid $36.1 billion in taxes just for being in the petroleum business. They paid $197.9 billion for the crude (oil companies don't own the crude they produce, they have to pay for it, mostly from governments). The US government nationalized all natural resources in 1977 and make over a trillion dollars a year selling coal, oil, natural gas, minerals, etc. So, in the end, out of $370.1 billion in sales, their profit was $52.9 (pretty pitiful if you ask me). Of this XOM paid $21.6 billion in corporate taxes. leaving them with a little over $30 billion in net profits. That's less than 10% profit margin (again very pitiful). Apple has an over 25% profit margin and is destined to bypass Walmart and ExxonMobil as the richest corporation in the US. But then we like our phones. If we taxed software and hardware corporations the same oil corporations, the price of computers and phone would triple at best.

[SolarPowerGuy]

10:24 PM on 05/15/2011

"Sen. Murkowski does not support singling out oil and gas companies for increased taxes."

Fine. Does she support these VERY profitable companies being among the first to share in the collective sacrifice that makes America a nation, and curtail their HUGE SUBSIDIES?

Because that's actually the discussion we're having, GOP spin notwithstanding.

[wsmith3023]

11:01 AM on 05/16/2011

Last Fall, Pelosi tried to push through a special tax on only American Oil Corporations. It failed. Hugo Chavez and CITCO would have loved this.
Huge subsidies has been tossed around, but what does it actually mean? It has no meaning. Tax cuts has no meaning. These are just lies that our politicians use to confuse us and deflect the real truth. We need a transparent government.
Profit has become an evil word. Without profit, our country is destined to fail.

[SolarPowerGuy]

01:12 PM on 05/16/2011

"Huge subsidies has been tossed around, but what does it actually mean?"

According to a middle 1990's Cato Institute study -- yes, THAT Cato Institute, the Libertarian think tank -- the petroleum industry was underwritten to the tune of $50 BILLION / year, even back then, when all we were doing in Iraq was maintaining a no-fly zone.

Yes, the word subsidy DOES have a meaning. Anyone who says otherwise is either naive, or engaged in a deliberate attempt to change the subject.

"Profit has become an evil word. Without profit, our country is destined to fail."

Would you like profits to accrue to the people who earn them HONESTLY? Or do you want the Golden Rule -- that is, he who already has the gold, makes the rules?

[rracer619]

10:18 AM on 05/24/2011

Correct me if I am wrong. It is no longer CITGO? It is now Valero? And he hates our guts just like the Islamic extremeists that want all of us to die just because we are Americans. I refuse to do business with any of them. When every other store I walk into in Gatlinburg,Tn. is owned/run by foreigners...it is a sad day in America. And it's not just there...it's everywhere. We have been selling our souls to the Devil...all to make a fast buck. Noone thinks or cares about the long term consequences. They come here with all of their momies and can then get low interest or no interest loans to start up a lucrative business? When was the last time your Govt. afforded you this option? For me, it was like...uhmmm.....never.

[MyResponsibility]

08:28 PM on 05/15/2011

Since when is a business using the tax code the same as receiving a subsidy? So now the expectation is that oil companies should be singled out from every other industry to not be able to write off business expenses to reduce their their income?

[MJJBunny]

11:47 AM on 05/15/2011

Newt Gingrich says President Obama is the 'Most Successful Food Stamp President In Modern American History'. I believe he is referring to Americans who need to eat. But oil subsidies for Corporations making record profits is necessary. Oh, and the tax breaks for the top 1% is necessary too.

[laurieanichols]

10:58 AM on 05/15/2011

All this back and forth is annoying, if the economy were in better shape and good living wage jobs were available, the price of gasoline at $4.00 a gallon would be a good incentive for the American public to engage in behavior that would move us away from oil dependence. HOWEVER, since the economy is still fragile, jobs are coming back slowly yet the ones coming back are not the higher wage jobs but rather the minimum wage jobs, we cannot afford $4.00 at the pump, it will flatten the still fragile recovery unless something is done such a tax holiday at the pump for the consumer and the end of tax subsidies for the oil companies. I like this idea.It would be refreshing to have us, the consumer, enjoy a tax subsidy instead of the corporations.

[SolarPowerGuy]

10:25 PM on 05/15/2011

"We" just got "our" Bush Tax Cuts extended. What do you mean, you can't afford $4.00/gallon gas?

The GOP says, American taxpayers should keep their money. They know best how to spend it -- on gas, apparently.

[mgrant33301]

06:55 AM on 05/16/2011

yeah. the GOP knows what's best for america. scotch swilling boehner and his buds are inspirational in behavior....
and in deed. ensign is their latest poster boy of hypocrisy.

[marleysghost]

10:21 AM on 05/15/2011

Under our present so-called "Capitalist" system, I do not believe any successful business, especially multi-billion dollar corporations such as oil and gas companies, should receive welfare from the public treasury. In fact they should be glad to pay their fair share of their owed taxes considering how many countries easily nationalize public utilities to insure the profits benefit the country and not just the chosen few at the top of the food chain.

[DavidWalker]

12:25 PM on 05/15/2011

Hmmmmm--a nationalized Moble, BP, etc.? You might have something there!!

[oneman689]

02:00 PM on 05/15/2011

Yes....and that something is called Socialism

[wsmith3023]

11:10 AM on 05/16/2011

Too late. Our government nationalized crude and all other natural resources in 1977. That's why the Department of Energy was formed. Our government makes 50 times as much money as ExxonMobil or BP in the petroleum business. Our government owns most of the oil and makes contracts with oil companies to produce this oil. In 2008 ,our government made $27 billion selling our oil in the Gulf of Mexico alone. Over $50 billion was paid in taxes on this oil by you and me. That's more than XOM and BP made combined and I'm only talking about a small portion of the crude that our governmnt owns.

[SunnyDaySam]

01:13 PM on 05/26/2011

Capitalism died in this country when bush/GOP bailed out Wall Street.

[cdchicago]

10:08 AM on 05/15/2011

I am amused. You see, with a little word smithing you can easily say...

"Sen. Murkowski does not support singling out oil and gas companies for increased taxes..."
Sen. Murkowski [supports singling out senior citizens for health care elimination...]
Sen. Murkowski [supports singling out school age children for reduced educational benefits...]
Sen. Murkowski [supports singling out unemployed Americans for hunger...]
Sen. Murkowski [supports singling out American veterans for homelessness...]
Sen. Murkowski [supports singling out non-wealthy Americans for the inceased consumption of cake...]

Given the chicanery this woman had to endure to get elected in the first place (and yes, it was so bad you wold have thought she was the Black candidate in the deep south the dirty politics were so terribly bad), she would stand up for Alaskans and Americans. Maybe act like a moderate, reasonable Republican. I guessed wrong?

[wsmith3023]

11:13 AM on 05/16/2011

You are mixing in religion, ethics, racism and anything else you can think of. What does any of this have to do with the regulation of crude prices?

[last man standing]

10:06 AM on 05/15/2011

I believe that multi national oil companies should not receive oil subsidies from the government, but the small independent American companies should. I believe that the rub between the democrats and republicans on this issue is subsidies for these small companies.

[SolarPowerGuy]

10:31 PM on 05/15/2011

But this is typical for an argument advanced by the GOP, Big Business is using small business as a fig leaf.

It happens in the discussion over agriculture subsidies all the time. We talk about cutting subsidies for unproductive, inefficient farming -- and the GOP congresscritter duly trots out a family farmer who "would be ruined" and "have to sell the farm" if the subsidies changed. Meanwhile, in the background, the primary beneficiaries of farm subsidies -- two huge businesses called Cargill Inc., and Archer Daniels Midland Inc. -- continue to rake in the big bucks, no questions asked.

[last man standing]

10:55 PM on 05/16/2011

I agree with you 100% on the agriculture subsidies. I experienced the fraud and corruption first hand while I was growing up.

Every year the farmer up the road (who had a 400 acre farm) would lease 40 acres from my father. I ask my father one day why Mr. **** would lease our 40 acres when he had 400 acres of his own and didn’t plant lot of it ever year.

My father told me that Mr. **** was paid by the government not to plant certain crops every year to keep the market from being flooded with these crops lowering the price of the commodity. So he planted them on our land.

Subsidies to large oil companies should be eliminated all together.

Just like wsmith3023 commented on my post the big boys have for the most part moved out. They are only interested in large volume wells. When the barrels per day falls to some predetermined level they cap the well and move on.

Many of the smaller exploration oil companies then buy these wells and use some unique process to recover the remaining oil & gas. These smaller companies deserve subsidies to make what they do profitable.

These smaller companies put it all on the line when they drill an exploratory well, because a dry hole could easily cause them to go bankrupt because they don’t have the resources of credit lines to recover from dry holes like the big boys do..

[wsmith3023]

11:18 AM on 05/16/2011

The Big Oil Corporations have already moved out of the US. They plug and abandoned their oil wells. They were no longer profitable. It is no longer profitable to be in the US.
The vast majority of the oil produced is by companies with less than 100 employees (there are over 500 of these companies). All of this talk is against small businesses. Big Oil Corporations don't give a care about these pitiful subsidies. They have stated over and over they don't need them and don't want them. They have also said (reading between the lines) we don't trust the US government and don't want to deal with them.

[last man standing]

10:57 PM on 05/16/2011

Right on! See my response to solorpowerguy on this thread.

[Jillian Barclay]

09:49 AM on 05/15/2011

Do away with oil subsidies? The GOP and the oil companies believe that would be un-American! It is far more American to cut education, any public assistance for the needy and medical care for those who are uninsured.

The GOP is part of the menage a trois! Link to: http://hubpages.com/hub/GOP-Performs-Fellatio-On-Corporate-Heads-Corporate-Satisfaction-Guaranteed

[PublicCitizen21044]

09:40 AM on 05/15/2011

WASHINGTON -- Democrats trying to get political mileage out of their push to repeal multi-billion dollar subsidies to the thriving oil and gas industry are reminding balky Republicans that many of them have backed the idea before.

Senate Majority Leader Harry Reid's (D-Nev.) office released a video mash-up Friday showing several of those Republicans speaking out against the subsidies that Democrats want to cut. Under the bill, the $21 billion saved would be used to pay down the deficit.


The industry is estimated to have earned some $1 trillion in profits over the last decade.

All of you Republican Revisionist History Buffs be warned that the modern era (21st Century)has begun and you cannot just say and/or do anything 'off the record' anymore. It is time to deal honestly with the American Voting Public and especially your constituency.

[RLaitres]

09:34 AM on 05/15/2011

Simple common sense dictates that these "subsidies" be done away with. A subsidy should be used only when there is a pressing need to do so, for a very specific purpose, and only for a short duration. And when they are used at the national level, it should be done for the good of the entire nation. The "oil patch" Democrats, and the Republicans opposing the repeal do not recognize their obligations as being to that of an entire country. They are putting local and parochial interests ahead of those of the nation and their constituencies should promptly remove them from office, and at the earliest opportunity. However, given that many of them think in the same way they do (Me first and only) there is very little likelihood that they will. That is what happens when people do not understand what they are really doing in the voting booth.

[jadl124]

07:26 PM on 05/19/2011

Exactly RL. When the people lead, the leaders will follow. That's the way we were set up. But people leading takes a lot of diligence and effort. And most of us are too consumed just putting food on the table.

They depend on that. They have us right where they want us.

[Gaylord P Farqua]

09:34 AM on 05/15/2011

When interviewed Gomer Pyle responded: "Surprise, Surprise, Surprise." The oil empire has its buck machine so deep into our Congress that nothing will interfere with their oligarchy. Anything to the contrary is nothing more than political theater. The President huffs and puffs demanding an end to oil subsidies, a few from the GOP/Tea Party follow Boehner's lead and say they are going to "...take a look at ending subsidies..." and then they all go back to their offices and continue their naps while Americans struggle to juggle household budgets to survive.

[n2oil2552]

09:28 AM on 05/15/2011

The real freeloaded on oil and gas is the U.S. Government, they sell the oil and gas lease to companys wanting to drill and get at least 12% of the profit for doing nothing , Taxes for gas at the pump are 40 to 80 cents per gallon and again the government does nothing to earn this money

[oneman689]

02:03 PM on 05/15/2011

Correct me if I'm wrong - the federal gas tax is 18.4 cents/gallon, not 40 to 80. The remaining gas tax is state by state.

[SolarPowerGuy]

10:35 PM on 05/15/2011

And what exactly do you know about the externalized costs of using petroleum?

http://en.wikipedia.org/wiki/Cost_externalizing

[roydoe]

09:13 AM on 05/15/2011

But remember it's the democrats who hate America!
The republicans love America-n businesses (and foreign businesses) that would pay their salaries( if they ever paid taxes...) and pay them off if quid pro quo was legal in lobbying.