Cutting wasteful oil subsidies: If not now, when?

The past few months have seen a disturbing pattern in our debate over this country’s spending priorities. At the same time as they have demanded painful, job-killing cuts to transportation funding and slashed programs like food assistance for poor families and pregnant women, Republican leaders have vigorously defended nearly $8 billion a year in handouts to wealthy oil companies.
 
These unnecessary tax subsidies should be the first place we look to make cuts, not the last. That’s why I recently joined with 44 of my House colleagues in sending a letter to Vice President Biden urging him to include cutting these subsidies in any bipartisan agreement to reduce the federal deficit. The proposed cuts would make only a small dent in oil company profits while saving our country an estimated $40 billion over 5 years.

American taxpayers currently provide billions in taxpayer subsidies to some of the largest oil companies in the world. These handouts have helped BP, Chevron, ConocoPhillips, ExxonMobil and Shell make a combined profit of nearly $1 trillion over the past decade.  Every day that we allow these tax breaks to continue, we line the pockets of oil executives at the expense of programs that create jobs for Americans and build a stronger, greener economy.
 
Independent analyses have found that eliminating these handouts would have no impact on the amount we pay at the pump. Because America only has 2 percent of the world’s oil reserves and uses 25 percent of the world’s oil, it’s the global market that determines gas prices. As a result, these domestic subsidies only increase oil company profits rather than changing retail prices.
 
The vast majority of Americans support ending these wasteful tax breaks, and even oil companies tell us that they do not need taxpayer support in order to bring affordable gasoline to consumers. Former President George W. Bush, an oil man himself, said in 2005, “I will tell you with $55 oil we don’t need incentives to oil and gas companies to explore. There are plenty of incentives.” With oil prices hovering around $100 a barrel, now is the time to finally remove these subsidies from the tax code.
 
Americans deserve a rational discussion from their elected officials about how to reduce the deficit without needlessly ravaging programs that American families and workers depend on. It only makes sense that any deal on reducing the deficit must include an end to these wildly inefficient and wasteful subsidies.
 
As we look ahead to the long-term fight for global economic competitiveness, it is time to seriously examine our energy policies. Other nations like China and Germany are surpassing us in the development of clean energy technologies like advanced car batteries and solar panels while our energy future is held hostage by our addiction to oil. It’s time for America to start investing in the technologies of the future rather than the energy of the past.