By Andrew Restuccia - 03/26/12 05:38 PM EDT
Senate GOP leaders are urging their members not to bottle up Democrat-backed legislation to repeal oil industry tax breaks, a move designed to allow a freewheeling floor debate that Republicans believe will help them politically.
While most Republicans oppose the legislation, the effort to let the bill advance — for now — in a procedural vote Monday evening signals a new strategy in the longstanding battle over tax breaks for major oil companies.
“If Democrats want to talk about raising taxes on American energy manufacturers, Republicans will have better ideas,” the aide said.
Republicans believe they can undercut public support for the legislation by arguing that it's a distraction from GOP efforts to rein in soaring gas prices, a top concern for voters.
The legislation, which is authored by Sen. Robert MenendezRobert MenendezDemocrats press Wells Fargo CEO for more answers on scandal Dem senator: Louisiana Republican 'found Jesus' on flood funding Taiwan and ICAO: this is the time MORE (D-N.J.), will come up for a procedural vote Monday night. It is not expected to garner enough votes to ultimately pass the Senate.
President Obama and many Senate Democrats have rallied around the Menendez bill, arguing that major oil companies’ massive profits show they don’t need tax breaks. Supporters say the bill resonates with voters who are angry about gas prices, which are nearing a national average of $4 per gallon.
But Republicans have labeled the bill as a tax on the oil industry, arguing it could raise prices at the pump.
Opponents of the bill have highlighted a March 2011 Congressional Research Service report that says a wide-ranging repeal of oil industry tax breaks could raise oil prices “on what would likely be a small scale.”
But a separate May 2011 Congressional Research Service report that analyzed legislation similar to the Menendez bill found that the repeal of five key oil industry tax breaks would have little to no impact on gasoline prices.
The Menendez legislation eliminates a slew of oil-industry tax deductions for major integrated oil companies, using the savings to finance the extension of key renewable energy tax credits.
The Joint Committee on Taxation estimates that removing the incentives would raise $24 billion over 10 years, while extending the green-energy and efficiency incentives would cost $11.7 billion over the same period, according to Menendez’s office.
—Ben Geman contributed to this story.