Senate Dems to revive oil tax breaks repeal push during broad deficit fight

Senate Democrats intend to attach a measure repealing billions of dollars in oil industry tax breaks to a broader package aimed at lowering the deficit, a top Democrat said Wednesday.

Senate Majority Leader Harry Reid (D-Nev.) has scheduled a test vote next Wednesday on a bill, authored by Sen. Robert Menendez (D-N.J.), that would eliminate or reduce tax breaks for the five largest oil companies, Sen. Charles Schumer (D-N.Y.) told reporters Wednesday afternoon.

The measure faces major hurdles to passage. If it fails, Democrats plan to revive the legislation as part of a wide-ranging effort to reduce the deficit, Schumer said.

“If that doesn’t pass, we are still going to try to make this part of our deficit reduction package,” Schumer told reporters.

Democrats held a press conference Wednesday at a gas station on Capitol Hill. They urged the executives of the largest oil companies to support repealing the tax breaks.

“You are doing just fine on your own, you don’t need the taxpayer giving you an extra handout to help,” Schumer said.

The heads of the five largest oil companies are slated to testify Thursday before the Senate Finance Committee on industry tax breaks.

Schumer called on Republicans to support the effort, arguing it is a first step toward reducing the deficit.

“We are also saying to Speaker Boehner, this is the place to start. If you’re serious about real deficit reduction, there is no reason not to include these subsidies as a way to cut the deficit because they are outlandish and serve no purpose whatsoever,” he said.

But Republicans have blasted the measure, noting it will do nothing to lower gas prices, which averaged $3.96 per gallon Wednesday in the United States.

Despite holding their press conference at a gas station, Democrats acknowledged that their proposal to eliminate industry tax breaks will do nothing to lower gas prices.

At the same time, though, the lawmakers stressed that the bill will not raise prices, as Republicans and the oil industry have alleged.

"It certainly is not going to increase prices," Menendez said. "That’s the American Petroleum Institute, which is an industry-driven effort, and Republicans who are protecting big oil trying to scare the public."