By Andrew Restuccia - 05/12/11 02:55 PM EDT
Exxon Mobil Corp. CEO Rex Tillerson blasted Senate Democrats later Thursday for seeking to eliminate billions of dollars in tax breaks for the largest oil companies, arguing that the effort is “misinformed and discriminatory.”
Tillerson and the heads of the four other major oil companies — Chevron, Shell, ConocoPhillips and BP — testified before the Senate Finance Committee Thursday morning amid attempts by Democrats to pass a bill that would repeal $21 billion in oil industry tax breaks for the five largest oil companies over 10 years.
Instead of slashing oil tax breaks, Tillerson called on lawmakers to expand domestic oil and natural-gas production.
“There is a more effective way to take steps to reduce prices and raise revenues — but, unfortunately, it is a way Congress and the Administration has so far rejected,” Tillerson said in his written testimony. “If the U.S. oil and gas industry was permitted to develop our nation’s enormous untapped energy supplies, it could put downward pressure on energy prices and increase revenues for government budgets.”
It is unfair to deny five oil companies these tax breaks, Tillerson said, noting that they are “not special incentives, preferences or subsidies for oil and gas, but rather standard deductions applied across all businesses in the United States.”
The effort, Tillerson argued, “is tantamount to job discrimination.”
Senate Democrats, buoyed by high gas prices and soaring industry profits (Exxon posted a $10.65 billion profit in the first quarter of the year), intend to hold a test vote next Wednesday on their bill to eliminate the tax breaks.
The bill faces major hurdles in the Senate and will almost certainly not pass the House. But Democrats don't plan to drop the issue; Sen. Charles Schumer (D-N.Y.) said Wednesday that Democrats will seek to attach the proposal to a broader measure aimed at reducing the deficit.
Republicans, meanwhile, plan to focus on gas prices. Sen. Orrin Hatch (R-Utah), the top Republican on the Finance panel, said Wednesday he’ll focus on the fact that the plan to slash the tax breaks won't reduce prices at the pump.
But Democrats are almost certain to tout a recent report from the nonpartisan Congressional Research Service that says while gas prices will not go down under the proposal, they will likely not go up either.
—An initial version of this story was published at 7:33 a.m.