Senate rejects bill to cut oil tax breaks

The Senate rejected a bill Tuesday to cut billions in tax breaks for the largest oil companies, but Democrats vowed to revive the measure as part of high-stakes negotiations on the budget and debt ceiling.

Democrats’ pledge to continue pushing the bill signals that they view the effort as a winning political issue amid $4-a-gallon gas, soaring oil company profits and growing concern about the deficit.

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A procedural motion necessary for the bill to move forward failed in a 52-48 vote. The motion required 60 votes for passage.

Two Republicans – Maine Sens. Olympia Snowe and Susan CollinsSusan Margaret CollinsKavanaugh accuser agrees to testify next week The Memo: Could Kavanaugh furor spark another ‘year of the woman’? Kavanaugh fight roils an already ugly political climate MORE -- voted for the motion, while three Democrats – Sens. Mary LandrieuMary Loretta LandrieuLobbying world Former New Orleans mayor: It's not my 'intention' to run for president Dems grasp for way to stop Trump's Supreme Court pick MORE (La.), Ben Nelson (Neb.) and Mark BegichMark Peter BegichElection Countdown: Trump plans ambitious travel schedule for midterms | Republicans blast strategy for keeping House | Poll shows Menendez race tightening | Cook Report shifts Duncan Hunter's seat after indictment The Hill's Morning Report — Trump’s legal jeopardy mounts after Manafort, Cohen felony counts Dunleavy, Begich win party nods in 3-way race for Alaska governor MORE (Alaska) -- broke ranks and voted against the motion.

The legislation would eliminate a slew of tax breaks for the five largest oil companies: Exxon Mobil, Shell, BP, ConocoPhillips and Chevron.

Democrats say the bill would save $21 billion over the course of 10 years, savings that can be used to reduce the deficit at a time of increased belt-tightening.

“Quite simply, we are talking about making drastic cuts to programs that touch the lives of almost every person in this country. Except for them,” Sen. Jay RockefellerJohn (Jay) Davison RockefellerSenate GOP rejects Trump’s call to go big on gun legislation Overnight Tech: Trump nominates Dem to FCC | Facebook pulls suspected baseball gunman's pages | Uber board member resigns after sexist comment Trump nominates former FCC Dem for another term MORE (D-W.Va.) said, referring to the major oil companies.

“Without a willingness to stare down sacred cows like corporate subsidies, we won’t ever be able to make progress eliminating the massive federal deficit, which is staring us in the face.”

Top Democrats vowed Tuesday to revive the oil tax breaks repeal proposal. Senate Majority Leader Harry ReidHarry Mason ReidKavanaugh furor intensifies as calls for new testimony grow Dems can’t ‘Bork’ Kavanaugh, and have only themselves to blame Dem senator: Confidential documents would 'strongly bolster' argument against Kavanaugh's nomination MORE (D-Nev.) said he plans to push the measure as part of negotiations on the budget and to raise the debt ceiling.

“I am confident that before we finish our budget negotiations here in anticipation of raising the debt ceiling that that will be part of it,” Reid told reporters in the Capitol.

A vote on raising the debt ceiling is expected this summer. The Treasury Department says it will no longer be able to avoid a default on its financial obligations by Aug. 2.

But Republicans and some Democrats blasted the legislation, arguing it would single out the oil industry for punitive treatment.

“We're here debating whether or not … to essentially punish a handful of companies," Sen. Lisa MurkowskiLisa Ann MurkowskiKavanaugh accuser agrees to testify next week Murkowski says she’ll wait until Ford testifies before making decision on Kavanaugh Alaska gov, lieutenant gov come out against Kavanaugh MORE (R-Alaska) said on the Senate floor Tuesday. "Really there's no policy justification for it other than that they can afford it — they're making money. They can afford it."

Opponents of the bill dismissed the legislation as a distraction, noting that it will do nothing to lower gas prices.

“This is entertainment," Sen. Mary Landrieu (D-La.) said. "And it's really not funny, and it's not laughable — it's very serious."

The nonpartisan Congressional Research Service and the Joint Economic Committee said this week that the bill will likely have no effect on fuel prices.

Senate Republicans will get a chance to vote on a bill they say will put the country on a path toward more stable fuel prices.

Senate leadership agreed to hold a test vote Wednesday on legislation introduced by Senate Minority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellDoug Jones to McConnell: Don't 'plow right through' with Kavanaugh Kavanaugh accuser agrees to testify next week GOP, Kavanaugh accuser struggle to reach deal MORE (R-Ky.) that would expand domestic oil and gas drilling.

The bill — which echoes major components of a three-bill drilling package passed by House Republicans in recent weeks — is not expected to garner enough votes for passage. But it offers Republicans the opportunity to cast Democrats as out of touch with consumers who are paying nearly $4 a gallon at the pump.

McConnell’s bill would require the Interior Department to hold lease sales in the Gulf of Mexico and off the Virginia coast, set a timeline for review of pending offshore permit applications and extend leases in the Gulf for one year, among other things.

The tax-break repeal legislation has ignited a firestorm in Washington over tax breaks and deficit reduction.

Americans for Tax Reform President Grover Norquist warned Tuesday that a vote for the bill would be a violation of a pledge signed by most Republicans not to raise taxes.

“Raising taxes on oil and natural-gas producers will do little to reduce the deficit — perhaps nothing — and only encourage Washington’s overspending problem,” Norquist said in a letter to senators. “It is for these reasons that I urge you to oppose [the bill], as it is a violation of the Taxpayer Protection Pledge.”

Meanwhile, fiscal watchdog Taxpayers for Common Sense says the bill doesn’t go far enough.

“Congress needs to go further," Taxpayers for Common Sense Vice President Steve Ellis said. "We cannot afford to just look at a few subsidies for a handful of companies. We need to eliminate all of these subsidies as part of an effort to deal with our nation’s fiscal crisis.”

-- Ben Geman, Josiah Ryan and Pete Kasperowicz contributed to this story.

-- This story was updated at 6:57 p.m.