Democrats plan revival of oil tax fight on debt-deal committee

Democrats signaled Monday that they hope to use a joint congressional committee set up under the compromise debt deal to revive their stalled push to repeal billions in oil-industry tax breaks, a move that signals an upcoming clash with House Republicans.

Attacking oil industry tax breaks has been a pillar of Democratic and White House political messaging in fiscal policy battles with Republicans.

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Comments by several Democrats Monday signal that it's not likely to abate despite their failure to win any revenue-raisers in the initial phase of the two-part deficit agreement, or by heavy GOP and industry resistance to going after the influential energy sector.

A House Democratic leadership aide said Monday that Democrats will press for the repeals through the bipartisan deficit panel that would be charged under the deal with finding $1.5 trillion in deficit reduction, which would come in addition to the $1 trillion in spending cuts over a decade that represent the first phase of the agreement.

Several Senate Democrats said they discussed the issue Monday morning during a caucus meeting in which Vice President Biden outlined the compromise debt agreement unveiled Sunday by the White House and top lawmakers in Congress. The House is expected to vote on the plan later Monday.

“I’d like to plug up those oil loopholes. Ethanol is putting their money on the table. I’d like to see oil do the same thing,” Sen. Amy Klobuchar (D-Minn.) told The Hill after the meeting, referring to a compromise agreement she negotiated to phase out an ethanol tax break and devote some of the savings to deficit reduction.

Klobuchar said she and other Senate Democrats advocated at the meeting for slashing the oil industry tax breaks in the 12-member joint committee set up under the debt compromise.

“Some people brought it up as an example of something we can do rather than cut $50 billion a year out of defense,” Klobuchar said.

White House spokesman Jay Carney signaled Monday that President Obama will also keep attacking the oil industry subsidies through the joint committee.

“If we need to, as legislated through this deal, find another $1.2 trillion to $1.5 trillion in deficit cuts, how are we going to do that? Are we going to do it by asking sacrifice only of middle-class Americans or seniors, parents of children who are disabled? Or are we going to ask that others, including oil-and-gas companies, corporate jet manufacturers or the wealthiest Americans share in the sacrifice?” Carney said at a briefing.

“I think that is, again, a debate he’s looking forward to,” he added.

But House Republicans have said they have taken revenue off the table in the joint committee. A presentation delivered by House Speaker John Boehner (R-Ohio) Sunday night to the Republican Caucus said the structure of the joint committee makes it “impossible” for the panel to raise taxes.

Democrats have been trying unsuccessfully for months to repeal tax breaks for the oil-and-gas industry. The Senate rejected legislation in May that would cut $21 billion in tax breaks for the five largest oil companies over the next decade. 

Senate Finance Committee Chairman Max Baucus (D-Mont.) said Monday the joint committee should consider repealing oil industry tax breaks.

“The beauty of this committee is that everything is on the table,” he said. “Everything will be considered.”

Other Senate Democrats, including Sens. Maria Cantwell (Wash.) and Frank Lautenberg (N.J.), said they will push their colleagues to repeal the tax breaks in the joint committee.

But Senate Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.) said Democrats are more focused on the upcoming Senate vote on the deficit plan than the details of the joint committee.

“I don’t think people are now discussing what the committee will do,” Boxer said. “I think people are discussing how they are going to vote on this agreement and what they like about it, what they don’t and how they view it.”

Some House Democrats echoed the sentiments of their Senate colleagues Monday. 

Rep. Sandy Levin (Mich.), the top Democrat on the Ways and Means Committee, said “revenue is on the table” for the joint committee. 

He told reporters after a House Democratic Caucus meeting with Biden that it’s “too early to say” where they would come from. Asked if repeal of oil-and-gas industry tax breaks should be in the mix, he replied “of course.”

Rep. Eliot Engel (D-N.Y.) said he wants revenues on the table — including repeal of oil-and-gas industry tax breaks — but said he was not optimistic that GOP opposition could be overcome.

“We compromised a great deal on cutting back spending, but I see no compromise in terms of allowing billionaires to pay their far share and allowing tax loopholes for oil and other large corporations to be closed,” he told The Hill.

Under the compromise debt plan, which is slated to come up for a vote in the House later Monday, Congress must act on the joint committee’s deficit-cutting proposal by Dec. 23.

The push to revive efforts to repeal oil-and-gas industry tax breaks comes as questions about energy tax policy more broadly — notably ethanol tax breaks — are before lawmakers.

At least one prominent Republican appeared open on Monday to addressing energy tax policy through the joint committee.
 
“I think it is all on the table for the super-committee, or almost all is on the table,” said Sen. Lamar Alexander (Tenn.), a member of the GOP leadership team, when asked about tacking energy tax reform through the joint committee. “I have voted to get rid of the ethanol subsidy, I would vote not to extend the big subsidy for wind.”
 
“I think it is appropriate to use some of that money to reduce the debt at a time when we are borrowing 40 cents out of every dollar we spend. Having said that, I am not going to give a hypothetical running commentary of what I might vote or not vote for from this committee. I want to give them a broad opportunity to report to us and see what they can do,” he said.