[Congressional Record (Bound Edition), Volume 157 (2011), Part 5]
[Senate]
[Page 7314]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         OIL AND GAS SUBSIDIES

  Mr. LEVIN. Mr. President, the subsidies to oil and gas companies in 
the form of tax breaks cost the Federal Government in the neighborhood 
of $4 billion a year. What most Democrats, including this Democrat, 
propose to do is to end those subsidies and to use the money to reduce 
our Federal budget deficit. This is not a particularly complicated 
issue.
  If oil and gas companies were struggling, if a large number of jobs 
were at risk, if ending these subsidies threatened to increase the 
price families have to pay for gasoline or fuel oil or if ending them 
would create a drag on our fragile economic recovery--if any of those 
things were true, this might be a closer call. But they are not true. 
We are subsidizing massively profitable oil companies. Nearly every 
independent analyst--and even some from the oil industry itself--tells 
us this proposal will not alter the economic fundamentals that 
determine gasoline prices. Oil production, and therefore the jobs it 
creates, will not decline if we pass this bill. Struggling families and 
small businesses will not pay more because we end these subsidies. And 
by ending them, we can help close a budget deficit we all agree is a 
significant problem.
  The arguments against this measure are misguided. Republicans have 
claimed it would increase gas prices. Independent economists disagree. 
For instance, the nonpartisan Congressional Research Service reported 
last week that:

       Prices are well in excess of costs and a small increase in 
     taxes would therefore be less likely to reduce oil output and 
     hence increase petroleum product gasoline prices.

  Even the chief tax expert of the American Petroleum Institute said 
last week that the proposal:

       . . . would not affect the global economics underpinning 
     oil supply and demand, which explain today's gasoline prices.

  That is an important point to keep in mind. The price of oil depends 
on a number of factors, one of which is supply and demand for this 
internationally traded commodity. Another factor, one which I and 
several other Senators believe bears further examination, is the role 
of speculation in that market. But the money we are talking about 
saving is relatively small in the context of a massive global 
marketplace for oil.
  It is also small relative to the profits oil companies have reaped. 
The five companies that would be affected by the proposal we support 
made a combined $76 billion in profit in 2010. That is not revenue; 
that is not sales; that is profit--$76 billion. From 2001 to 2010, 
their combined profit approached $1 trillion. With the price of oil in 
the neighborhood of $100 a barrel, these record profits are likely to 
continue. These companies do not need taxpayer assistance.
  At the same time, the money we spend helping them is increasing the 
budget deficit--a deficit our Republican friends say justifies making 
dramatic reductions in health care for our seniors, support for our 
college students, Head Start for our youngest students, and other 
Draconian cuts. Yet tax breaks for companies making billions of dollars 
a year in profits is something they say we can afford. I don't buy it.
  More importantly, the American people don't buy it. The American 
people know these tax breaks we can't afford for companies that can 
more than afford to lose them are wrong. They know if we are going to 
get serious about our debt problem, we need to eliminate tax 
expenditures that contribute to our deficit. They know if we can't 
tackle such an obvious example of wasteful spending as this, further 
reform is unlikely. The American people recognize the fundamental 
unfairness of tax breaks for oil companies making billions in profits 
at the same time working families are told they will have to do with 
less.
  Last week, with the CEOs of major oil companies testifying before the 
Finance Committee, they said they want to be treated like everybody 
else. I say, fine, let's do that. Let's tell the massively profitable 
oil companies not to expect tax subsidies from Uncle Sam. Let's expect 
those companies to give a little bit as we address the budget deficit, 
just as middle-class American families are going to have to give a 
little bit as we cut back on important programs for them.
  Our Republican colleagues say our deficits are unsustainable, and I 
agree. They say the deficit problem is urgent, and I agree. They say we 
must act, and I agree. And we can act. We can end these oil company 
subsidies. Now is the time for all of us to act to end billions of 
dollars in handouts to massively profitable oil companies and use that 
money to help put our fiscal house in order.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Indiana.

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