House Dems press Biden to nix oil industry tax breaks in deficit deal

Forty-five House Democrats are pressing Vice President Biden to ensure that elimination of oil industry tax breaks is part of the deficit-cutting deal he’s trying to craft with Republicans.

“As you consider various options for reducing spending and raising revenue, we write to make sure that unnecessary tax subsidies for the major oil companies are on the table,” states the letter Thursday from Reps. Earl BlumenauerEarl BlumenauerDemocrats give Trump trade chief high marks On The Money: S&P hits record as stocks rally on Fed cut hopes | Facebook's new cryptocurrency raises red flags for critics | Internal IRS watchdog rips agency's taxpayer service | Apple seeks tariff relief First major 'Medicare for All' hearing sharpens attacks on both sides MORE (D-Ore.), Ed MarkeyEdward (Ed) John MarkeyHillicon Valley: House panel advances election security bill | GOP senator targets YouTube with bill on child exploitation | Hicks told Congress Trump camp felt 'relief' after release of Clinton docs | Commerce blacklists five Chinese tech groups Senate Democrats press regulators over reported tech investigations Hillicon Valley: Senate sets hearing on Facebook's cryptocurrency plans | FTC reportedly investigating YouTube over children's privacy | GOP senator riles tech with bill targeting liability shield | FAA pushed to approve drone deliveries MORE (D-Mass.), Lois Capps (D-Calif.) and others.

ADVERTISEMENT

“As you work toward the creation of an agreement to reduce the deficit, we urge you to protect taxpayer dollars by eliminating these wasteful tax subsidies,” the letter states.

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

Senior Senate Democrats are also pressing to eliminate billions of dollars in oil industry tax incentives in the budget talks, but face substantial GOP opposition.

On Wednesday Sens. Charles SchumerCharles (Chuck) Ellis SchumerMcConnell-backed Super PAC says nominating Roy Moore would be 'gift wrapping' seat to Dems McConnell vows to 'vigorously' oppose Moore's Senate bid Pelosi: Trump delay on Harriet Tubman is 'an insult to the hopes of millions' MORE (D-N.Y.) and Robert MenendezRobert (Bob) MenendezSenate to vote on blocking Trump's Saudi arms deal as soon as this week There is a severe physician shortage and it will only worsen Democrats ask Fed to probe Trump's Deutsche Bank ties MORE (D-N.J.) called on the 34 Senate Republicans that voted Tuesday to end ethanol subsidies to throw their weight behind ending oil industry tax breaks as well.

Here is the letter from House Democrats:

Dear Vice President Biden: 

We commend your efforts to forge a bi-partisan agreement to reduce the deficit. We understand that reducing the deficit will involve difficult choices and sacrifices on the part of American citizens. As you consider various options for reducing spending and raising revenue, we write to make sure that unnecessary tax subsidies for the major oil companies are on the table.
 
While American families struggle with rising gas prices, the biggest oil companies rake in massive profits.  The biggest five oil companies alone have made a total combined profit of nearly $1 trillion over the past decade, including $35 billion in the first quarter of 2011. Yet, even during times of record profits, oil companies enjoy billions of dollars of tax subsidies courtesy of the American taxpayers. During a time of significant fiscal challenge, this represents a dramatic waste of taxpayer dollars.
 
Oil prices are sufficiently high for companies to explore and drill without incentives. We agree with former President George W. Bush, who said in 2005, “I will tell you with $55 oil we don’t need incentives to oil and gas companies to explore.” Prices today are around $100 a barrel, making these tax incentives even less necessary. Instead, these tax breaks should be first on the chopping block as our nation looks for ways to reduce the deficit. Preserving unnecessary and excessive tax subsidies for the oil industry while cutting programs that improve the lives of Americans every day makes no sense.
 
Cutting these subsidies will not raise gas prices, as the Congressional Research Service and the Joint Economic Committee have confirmed. Because oil prices are set on the global market and U.S. production is relatively low, subsidies provided by U.S. taxpayers serve mainly to increase oil company profits rather than change retail prices. For instance, according to filings provided to the Securities and Exchange Commission, the average cost to produce a barrel of oil in 2010 for the 5 largest oil companies was $11 while the average sale price for a barrel of oil was $72.  Today, prices are considerably higher, while the cost of production has not appreciatively changed.
 
The American public supports ending these tax breaks as part of our effort to reduce the deficit. According to a recent NBC News/Wall Street Journal survey, 74% of Americans favor eliminating tax credits for the oil and gas industries. We agree. As you work toward the creation of an agreement to reduce the deficit, we urge you to protect taxpayer dollars by eliminating these wasteful tax subsidies.  Thank you for your consideration.