Menendez seeks to end tax breaks for oil companies

"It's $20 billion worth of tax breaks to an industry that in the first three months of this year made $20 billion in profit," he told MSNBC's Morning Joe, adding, "I think with what's happened in the Gulf and with record profits and with an industry that's going to pursue [oil] anyhow, it's a good time for the American taxpayer to recoup about $20 billion." 

The senator's goal aligns with President Obama's budget proposal to repeal many of the same tax breaks. But the political will in the Senate appears to be lacking for what Menendez is suggesting. 

During the recent debate on the so-called tax extender bill, Sen. Bernie Sanders (I-Vt.) failed to repeal $35 billion in oil and gas tax breaks by a 35 to 61 vote. Democrats and Republicans voted against his proposal.

Menendez argues that rescinding the tax breaks will not stop domestic oil companies from exploration since the profit motive is so enticing. 

"The oil production will continue to be pursued by these companies who are going to continue to reap record profits whether or not you and I reach into our pockets and give them $20 billion," he said.

The senator's comments comes on the heels of a report by the U.S. Energy Information Administration that found Obama's six-month ban on deepwater drilling will reduce domestic oil production by roughly 30 million barrels over the next 12 months, which could hurt the economic rebound that recently has taken a few hits. 

"This moratorium not only penalizes an entire industry for the safety mistakes of a single company, but it also stands to seriously hinder our economic recovery and jeopardize our energy safety," said Dr. Bernard Weinstein, associate director of the Maguire Energy Institute at Southern Methodist University's Cox School of Business, in prepared remarks.  

"This drilling ban reverses several consecutive years of increases in U.S. domestic oil production -- growth that has created American jobs, tax revenue for local governments and spending to support small businesses in the Gulf Coast communities from Texas to Florida," Weinstein said.

Rep. Kevin Brady (R-Texas) earlier this week said there would be less support for the moratorium if lawmakers knew the number of people in their districts that would be affected by the ban.

"They don't see energy workers, they just see energy executives," he told an audience at a rally sponsored by the International Association of Drilling Contractors. "So they feel free to undercut the two million workers in this industry because they don't think they have energy workers in their districts."