Democrats: 'Dam is officially broken' for GOP on taxes

Senate Democrats hope to exploit a split between GOP senators and a major conservative group to build political momentum for repealing oil industry tax breaks in a deficit-cutting deal.

Thirty-four GOP senators voted Tuesday for Sen. Tom Coburn’s (R-Okla.) failed amendment to end a major ethanol industry tax break.

The vote dealt an apparent blow to Americans for Tax Reform, the influential group that said the amendment would violate their anti-tax pledge that most Republicans signed unless it was paired with other tax cuts.

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Sen. Charles Schumer (D-N.Y.) — the top messaging strategist for Senate Democrats — and Sen. Robert Menendez (D-N.J.) said Wednesday that Republicans who voted with Coburn should now support Democrats' call for stripping $21 billion over a decade in tax breaks for the largest oil companies.

“The dam is officially broken. The knee-jerk right-wing opposition to getting rid of any taxpayer subsidies is now subsiding,” Schumer said on a call with reporters.

He said that revenues in general should be on the table in ongoing budget talks between the White House and a bipartisan group of Capitol Hill lawmakers.

“The most natural candidate is the taxpayer subsidies for oil companies,” Schumer said. “If you think ethanol subsidies are a waste, there is no way you can justify handouts for oil companies who have seen record profits.”

Vice President Biden is leading high-stakes talks with lawmakers aimed at crafting a wide deficit-cutting deal as part of an agreement to raise the debt ceiling.

In mid-May the Senate blocked a Democratic bill to repeal $21 billion in oil industry tax breaks and apply the savings to deficit reduction.

The 52-48 vote was shy of the 60 votes needed to advance a bill that would nix incentives for ExxonMobil, Shell, ConocoPhillips, Chevron and BP.

But Democrats want to revive the issue in the talks with Biden, despite what has been widespread GOP resistance to stripping the oil industry incentives, as well as opposition from several Democrats from oil-producing states.

Menendez said Tuesday’s ethanol vote showed that Americans for Tax Reform President Grover Norquist’s “ideological stranglehold” had been broken.