Past votes signal uphill fight on oil industry tax breaks

Senate Democrats will probably face big hurdles translating their political messaging on oil industry tax breaks into legislative achievement, even with gas prices climbing toward $4 per gallon.

Senate Majority Leader Harry Reid (D-Nev.) on Wednesday pledged to bring up legislation that would repeal various incentives for major oil companies.

But the last two Senate efforts to nix various industry tax breaks came nowhere near passage, although they were brought up as amendments to other bills when fuel prices were lower.

In February, the Senate voted 44-54 against Sen. Carl Levin’s  (D-Mich.) amendment that would have used the money to pay for stripping the Section 1099 reporting provision from the healthcare law by repealing several incentives.

Seven Democrats and 47 Republicans voted against the amendment, which came up during debate on an aviation policy bill.

Average gas prices were roughly $3.13 per gallon in early February, according to the Energy Information Administration, while they’re $3.88 now and topping $4 in some areas.

On June 15, the Senate voted 35-61 against Sen. Bernie Sanders’ (I-Vt.) oil tax repeal amendment to an unemployment insurance bill. Gas prices were roughly $2.70 per gallon at the time.

Senators are targeting tax breaks such as the oil industry’s ability to claim a lucrative domestic manufacturing deduction.

But the industry, many Republicans and oil-state Democrats say that the proposals would raise costs for energy projects and slow domestic production. Hurdles are even higher in the GOP-controlled House.