Tax Relief Act of 2005

TAX RELIEF ACT OF 2005

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Mr. WYDEN. What is so staggering is, when these big oil companies are charging record prices, making record profits, they are being given record tax subsidies that they show up and tell the American people they do not want.

So I intend to speak on this after the distinguished Senator from California is done. But she has an excellent amendment. I say to the Senator, you have characterized their testimony correctly.

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AMENDMENT NO. 2609

Mr. WYDEN. Mr. President, with the CEOs of the major oil companies admitting that they do not need tax breaks, Democrats and Republicans in the Senate are signaling that it is a new day as far as energy taxes. For the first time in 20 years, the Senate is on the brink of cutting back on a portion of the billions of dollars in tax breaks the major oil companies receive annually.

The long march toward reforming the energy provisions in our Tax Code began a couple of days ago, when the Senate Finance Committee accepted my amendment that would limit a brand-new tax break in the 2005 Energy bill that would allow the oil companies to get faster write-offs for their exploration costs. That amendment was, in my view, a beginning at rolling back unnecessary tax breaks. Today, a bipartisan group, under the leadership of Senator Feinstein and Senator Sununu, are building on that.

It is preposterous for the Senate to keep voting out tax breaks for the major oil companies when these executives go on national television and say they aren't needed. At a time when the Low-Income Home Energy Assistance Program doesn't have enough funds, at a time when Americans are hurting all across the country, I don't know how it is possible for a Member of the Senate to stand up and say: We are going to continue to dispense tax favors that the oil industry says are not needed.

What I did in the Finance Committee, what Senator Feinstein is building on today, is to say we are going to do a better job in the future of targeting scarce resources. In this case we are going to limit the tax breaks to the small and independent producers. Even with that, the fact

is that over the past 2 years, oil companies have already increased their drilling operations, as the price of oil has skyrocketed from $45 per barrel to over $70. The number of rigs in operation and the amount of drilling have both increased by a third since 2003.

Special treatment of oil and gas costs in the Tax Code is exactly the kind of special interest tax break we ought to be working, on a bipartisan basis, to eliminate. By eliminating this and other special-interest tax breaks, it will be possible to simplify the Code, help to lower tax rates, and, most specifically, let the energy markets work, let capital flow to its highest and best use.

This is a pretty big day in the Senate. Literally for 20 years, the Senate has been pouring it on in terms of one tax break after another for the major oil companies. If you look at the statutes, the statutes are not confining these tax breaks to the small independent producer. My legislation in the Senate Finance Committee did just that. I heard the pleas of a number of colleagues on the Finance Committee who said: Be careful about the small independent producers. I did that. We passed it in the Finance Committee.

Senator Feinstein and Senator Sununu have picked up on that theme. This is not going to take anything away from the small independent producers, but it is a big first step at reforming the Tax Code and keeping taxpayers' hard-earned money, when major oil executives say they don't need those dollars for tax breaks.

I hope the Senate will support the Feinstein-Sununu amendment, and take the next step in this effort to reform the Tax Code.

I yield the floor.

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