American Jobs And Closing Tax Loopholes Act Of 2010

Floor Speech

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Mr. SANDERS. Mr. President, I want to speak briefly about an amendment I have filed and look forward to getting pending in a short while. This is an amendment which addresses many of the issues we have been hearing about this morning about which the American people are concerned.

This amendment helps us lower the record-breaking deficit this country is facing, and this amendment will help us transform our energy system away from fossil fuel--away from the oil disaster that we are seeing in the gulf right now--to energy efficiency and sustainable energy. So for all my colleagues who are concerned about record-breaking deficits, I hope they will support this amendment which I will explain in a moment. And for all of my colleagues who understand that the future of this country is not offshore drilling, I hope they will support this amendment.

Let me explain briefly what this amendment does. At a time when the profits of big oil companies are soaring, at a time when we are in the midst of the largest oilspill in our Nation's history--one of the greatest ecological disasters this country has ever experienced--at a time when we desperately need to end our dependence on oil and gas and seriously transform our energy system by investing in energy efficiency, conservation, and renewable energy, this amendment is simple and it is straightforward and I think it addresses all of those concerns.

This amendment simply repeals over $35 billion in tax breaks to the oil and gas industry. Let me repeat that. This amendment simply repeals over $35 billion in tax breaks to the oil and gas industry, all of which were recommended for elimination in President Obama's fiscal year 2011 budget. What this amendment is doing is simply bringing to the floor of the Senate the recommendations that were in President Obama's budget.

According to OMB, the repeal of these tax breaks would be equivalent to about 1 percent of domestic oil and gas industry revenues over the next decade. This is not an onerous attack on the oil industry. In other words, the cost to the oil and gas industry of repealing these tax breaks is negligible. And $25 billion of the money saved under this amendment would be used to reduce the deficit and $10 billion would be used to invest in the highly successful Energy Efficiency and Conservation Block Grant Program over a 5-year period.

This amendment does two things. For all of my friends, and every American who is concerned about a $13 trillion national debt and record-breaking deficits, this amendment says let us put $25 billion into deficit reduction. For all of us who are concerned about transforming our energy system away from fossil fuel to energy efficiency and sustainable energy, this amendment says, over the next 5 years let's put $10 billion into the Energy Efficiency and Conservation Block Grant Program, which provides funding to States, cities, and towns all over America to begin transforming energy in their communities.

This amendment is supported by Physicians for Social Responsibility, Friends of the Earth, Public Citizen, moveon.org, Center for Biological Diversity, One Sky, Environment America, the Sierra Club, and Greenpeace.

If there is anything we should be learning from the gulf disaster, the horrendous disaster we are experiencing today on the gulf coast, it is that it is time to move aggressively away from polluting and unsafe fossil fuels which are getting more and more difficult to produce as we move farther and farther offshore to drill for them. With a $13 trillion national debt, the last thing we need to be doing is giving huge tax breaks to big oil and gas companies that have been making record-breaking profits year after year.

As I indicated before, all of the oil and gas tax breaks that my amendment seeks to repeal have been targeted for elimination in President Obama's fiscal year 2011 budget. So here we are. For all of my deficit hawk friends: $25 billion into deficit reduction by asking the oil industry, which has been hugely profitable in recent years, to start paying their fair share of taxes.

Let me quote from a speech that President Obama gave on this subject.

Our continued dependence on fossil fuels will jeopardize our national security. It will smother our planet. And it will continue to put our economy and our environment at risk. ..... If we refuse to take into account the full cost of our fossil fuel addiction--if we don't factor in the environmental costs and national security costs and true economic costs--we will have missed our best chance to seize a clean energy future. ..... The time has come once and for all for this Nation to fully embrace a clean energy future. Now, that means ..... rolling back billions of dollars of tax breaks to oil companies so that we can prioritize investments in clean energy research and development.

That is the end of the quote from President Barack Obama. Frankly, that is what this amendment is all about.

Let me give one interesting example of the absurdity of continuing to provide tax breaks to the oil and gas industry. Last year, ExxonMobil, the most profitable corporation in the history of the world, reported to the SEC that not only did it avoid paying any Federal taxes, it actually received a $46 million refund from the IRS. How is that, folks? So, for all of the taxpayers in this country, people who are making $30,000 or $40,000 a year, who are prepared to pay their fair share of taxes, we have a situation where last year ExxonMobil, the most profitable corporation in the history of the world, reported to the SEC that not only did it avoid paying any Federal taxes, it actually received a $46 million refund from the IRS.

We have a lot of working people in the State of Vermont who make $50,000 or $60,000 a year, working 6 or 7 days a week in order to take care of their family. They pay taxes. ExxonMobil, the most profitable corporation in America, gets a refund from the IRS. If anyone thinks that makes sense I would like to hear about it.

ExxonMobil is the same huge oil company that had enough money to pay a $398 million retirement package to its outgoing CEO, Lee Raymond, a few years ago, so it is a real struggling company. They make more profits than any company in the history of the world and paid their outgoing CEO $398 million in a retirement package but they cannot afford to pay a nickel in taxes. In fact, they get a tax refund. Do you think we need to change that system? I do.

ExxonMobil is the same company that is making its profits by gouging consumers at the pump by charging higher and higher prices for gasoline even when demand is low and supply is high. In Vermont, gas is now $2.85 a gallon. That has to stop.

This amendment would begin to make sure that ExxonMobil, BP, and other big oil companies pay at least a minimal amount of their record-breaking profits in taxes to the Federal Government so we can begin to deal with our record-breaking deficit; so we can begin the process of transforming our energy system.

Let me be clear. As millions of Americans have lost their jobs, their homes, their life savings, and their ability to send their kids to college because of this horrendous Wall Street recession, we cannot continue to allow big oil companies to make out like bandits. In the first quarter--I refer people to this chart--in the first quarter of 2009, when our gross domestic product shrank by 6.4 percent and overall corporate profits decreased by 5.25 percent--that is what a recession is about; profits are down, overall corporate profits--the five largest oil companies were still able to earn over $13 billion in profits. As this chart shows, during the last 10 years the five largest oil companies--ExxonMobil, Shell, BP, ChevronTexaco, and ConocoPhillips--earned over $750 billion in profits: a 10-year period, $750 billion in profits. That is not chickenfeed.

During the first quarter of this year, big oil's profits increased by 85 percent--not bad, 85 percent. Instead of using these profits to invest in renewable energy and to prevent oilspills, big oil and gas companies are primarily using this money to buy back their own stock and enrich their CEOs. According to the American Petroleum Institute, between 2000 and 2007 the entire oil and gas industry, of all of their profits--remember, $750 billion of profits over the last 10 years--invested only $1.5 billion in North American ``nonhydrocarbon investments'' aimed at reducing the Nation's dependence on oil. That is less than one-quarter of 1 percent of their profits during this time period.

Meanwhile, the CEOs of big oil companies have received hundreds of millions in retirement packages and total compensation. Over the last 5 years, Ray Irani, the CEO of Occidental Petroleum, received over $725 million in total compensation; John Hess, the CEO of the Hess Oil Company, has received over $240 million in total compensation; David Lesar, the CEO of Halliburton, has received over $114 million in total compensation; James Mulva, the CEO of ConocoPhillips, has received over $95 million in total compensation; and Rex Tillerson, the CEO of ExxonMobil, made over $30 million in total compensation over that 5-year period. Further, since 2002, the five largest oil companies have repurchased almost $270 billion of their own stock.

It is important for the American people to understand how excessively we are subsidizing fossil fuels and benefiting big oil. It is not only that they are making record-breaking profits; it is not only that they are not paying their fair share of taxes; it is not only that they are not investing in renewable energy so we can break our dependency on fossil fuel and clean up this planet, but in addition to that, they are receiving huge amounts of taxpayer subsidies. These guys who tell us how terrible the big government is are not hesitant to be running here to Capitol Hill to get their fair share of their welfare payments.

As this chart shows, according to the Environmental Law Institute, from 2002 to 2008, the U.S. Government provided more than $70 billion in fossil fuel subsidies compared to just over $12 billion for wind, solar, geothermal, biomass, and other renewable energies which in fact are the future of this country in terms of energy. This set of priorities is totally absurd. We have to put an end to the outrageous tax breaks and subsidies that have been given to big oil and gas companies.

But that, again, is not all this amendment would do. It is not only $25 billion in deficit reductions. This amendment begins to move us away from fossil fuel to energy efficiency and renewable energy by investing $10 billion into the Energy Efficiency and Conservation Block Grant Program. The stimulus package provided $3.2 billion for this highly successful program, and that money is filtering throughout 50 States in America. Hundreds and hundreds and thousands of communities are now making energy efficiency improvements in their townhalls, in their schools, and they are moving toward sustainable energy as a result of this program. We would put $10 billion more, over a 5-year period, into a program which finally moves us away from fossil fuel to sustainable energy and energy efficiency.

Let me give an example of how this program is working. This program is helping to build wind turbines in Carmel, IN, to power its city sewer treatment plant. It is being used in Salt Lake City, UT, to provide loans to businesses to make energy efficiency upgrades. It is being used in Columbus, OH, to make 29 public buildings more energy efficient.

I think, as everybody knows, the most significant thing we can do today, the best return on our dollar, is energy efficiency. That is what they are doing in Columbus, OH. That is what they are doing in Vermont. That is what they are doing, in fact, all over this country, as a result of programs such as the Energy Efficiency Block Grant Program. It is being used in Portland, ME, to retrofit 55 public buildings. It is being used in Miami, FL, to convert landfill gas into the production of electricity. Methane gas out of rotting organic matter in a landfill provides electricity. What can be smarter than that? It is being used in New York City to help homeowners and businesses with energy efficiency and renewable energy loans, among many other projects we are seeing all over America, 50 States utilizing this program, young people getting involved in thinking about energy, energy efficiency, sustainable energy. We need to keep these investments in energy efficiency and conservation going and that is what this amendment does.

Finally, this amendment would dedicate $25 billion for deficit reduction. At a time of record-breaking deficits and debt, we simply cannot continue to give oil and gas companies huge tax breaks.

When it comes down to it, this amendment asks a very simple question: Which side are you on? Which side are you on? Are you on the side of big oil and gas companies or are you on the side of reducing the deficit, reducing our dependence on oil, saving consumers and businesses money on their energy bills, and saving the planet we live on? I would hope most of our colleagues here are on the side of doing what is right for the American people. That is what this amendment is about. I understand that anytime you stand up to big oil and to big gas companies, there is going to be a lot of political push back. We know that since 1990 the oil and the gas industry has made over $238 million in campaign contributions, and over the past 2 years alone, they spent over $210 million on lobbying. With the BP disaster in the gulf coast, my guess is these guys are all over the place now lobbying and sending out their campaign contributions. But this amendment is the right thing to do. It should bring together all of us who are concerned about transforming our energy system, all of us who are concerned about lowering our record-breaking deficits.

I intend to be offering this amendment. I look for widespread support on both sides of the aisle.

I yield the floor.

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Mr. SANDERS. Mr. President, at a time when the profits of big oil companies are soaring, at a time when we are in the midst of a horrendous and huge oilspill on the gulf coast, at a time when we desperately need to end our dependence on oil and gas and significantly increase our investment in energy efficiency and renewable energy, the amendment I am offering is simple and it is straightforward. This amendment simply repeals over $35 billion in tax breaks to the oil and gas industry, all of which were recommended for elimination in President Obama's fiscal year 2011 budget.

Specifically, according to the Joint Committee on Taxation, the repeal of expensing of intangible drilling costs, repeal of percentage depletion for oil and gas wells, and repeal of the domestic manufacturing deduction for oil and gas production would save $35.3 billion over a 10-year period. According to OMB, the repeal of these tax breaks would be equivalent to about 1 percent of domestic oil and gas industry revenues over the next decade--1 percent. In other words, the costs to the oil and gas industry of repealing these tax breaks is negligible.

More than $25 billion of the money saved under this amendment would be used to reduce the deficit, and $10 billion would be used to invest in the highly successful Energy Efficiency and Conservation Block Grant Program over a 5-year period.

So we are accomplishing two very important goals. Every day, Members of the Senate come down here and they say we have to deal with the deficit. Under this amendment, we would save $25 billion for deficit reduction. That is pretty significant. Second, Members come down here every day and talk about the need to transform our energy system, to move to energy efficiency and sustainable energy--wind, solar, biomass, geothermal, other technologies. This amendment puts $10 billion in moving us away from fossil fuel. So it accomplishes two very important purposes.

This amendment is cosponsored by Senator Whitehouse and Senator Wyden. We have support for funding for the Energy Efficiency and Conservation Block Grant Program from the U.S. Conference of Mayors, from the National Association of State Energy Officials, and the National League of Cities. Taxpayers for Common Sense strongly supports our efforts to repeal the oil and gas tax breaks and pay down the deficit. Also supporting our amendment are the Sierra Club, Greenpeace, the American Council for an Energy Efficient Economy, Conservation Law Foundation, Physicians for Social Responsibility, Friends of the Earth, Public Citizen, moveon.org, Center for Biological Diversity, One Sky, Environment America, and Oceana.

If there is anything we should be learning from the gulf disaster, it is that it is time to move aggressively away from polluting and unsafe fossil fuels which are getting more difficult to produce and more expensive to produce and that we must move toward safe, clean energy.

With a $13 trillion national debt, the last thing we need to be doing is giving tax breaks to big oil and gas companies that have been making recordbreaking profits, year after year.

I know there are some people who come down here and say that one way to deal with the deficit problem is to privatize Social Security, to privatize Medicare, to place at risk the retirement benefits of millions of senior citizens. I think that is a very bad idea. There are other people who come down to the floor and talk about cuts in education, cuts to health care that the middle-class and working families of this country desperately need. I think cutting those programs is a bad idea. But I think going after some of the largest and most profitable corporations in this country, which have not paid their fair share of taxes, is a positive and intelligent way to deal with deficit reduction.

Let me quote from the President of the United States, Barack Obama, in his statements on this subject. Again, what we are proposing is what President Obama has recommended in his 2011 budget. This is what President Obama said:

Our continued dependence on fossil fuels will jeopardize our national security. It will smother our planet. And it will continue to put our economy and our environment at risk. ..... If we refuse to take into account the full cost of our fossil fuel addiction--if we don't factor in the environmental costs and national security costs and true economic costs--we will have missed our best chance to seize a clean energy future. ..... The time has come, once and for all, for this nation to fully embrace a clean energy future. Now that means ..... rolling back billions of dollars of tax breaks to oil companies so we can prioritize investments in clean energy research and development.

That is exactly what this amendment is all about. Let me give just one example. I hope people are listening to this one. Let me give one example of the absurdity of continuing to provide tax breaks to the oil and gas industry.

Last year, ExxonMobil, the most profitable corporation in the history of the world, reported to the SEC that not only did it avoid paying any Federal income taxes, it actually received a $156 million refund from the IRS. So middle-class Americans, people in Vermont and all over this country who are working 50 and 60 hours in order to provide the necessary income they need to pay the bills for their families, those folks go out and they pay their income tax. They may not be too happy about it, but they understand that in a civilized society you have to pay taxes to pay the bills of government. Not ExxonMobil. The most profitable corporation in the history of the world last year not only avoided paying any Federal income taxes, it actually received a $156 million refund from the IRS. If that makes sense to anybody--maybe it does--it surely does not make sense to me.

I ask unanimous consent to have printed in the Record the page of ExxonMobil's 10-K report to the SEC that discloses this information.

There being no objection, the material was ordered to be printed in the RECORD

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Mr. SANDERS. ExxonMobil is the same huge oil company that has had enough money to provide a $398 million retirement package to its outgoing CEO, Lee Raymond, just a few years ago. They made more money than any corporation in the history of the world last year. They did not pay any Federal taxes. In fact, they got a huge refund from the Federal Government. And some years ago this particular corporation paid out $398 million in retirement package for its CEO. I do not think that makes a whole lot of sense. I think we ought to end that nonsense and end it now. This country is at record-breaking deficits. We cannot allow large corporations such as ExxonMobil not to pay taxes.

ExxonMobil is the same oil company that is making its profits by gouging consumers at the pump by charging higher and higher prices for gasoline even when demand is low and supply is high. In Vermont, it is $2.85 a gallon. Working people are having a hard time paying high prices for gas. It does not matter whether demand is high or low, it appears that gas prices go up. This amendment would begin to make sure that ExxonMobil, BP, and the other big oil companies pay at least a minimal amount of their huge profits in taxes to the Federal Government. That, it seems to me, is the very least we can do.

Let's be clear. As millions of Americans have lost their jobs, their homes, their life savings, and their ability to send their kids to college as a result of this Wall Street-induced recession, we cannot continue to allow big oil companies to make out like bandits. Enough is enough. In the first quarter of 2009, when our gross domestic product shrank by 6.4 percent, and overall corporate profits decreased by 5.25 percent, the five largest oil companies were still able to earn over $13 billion in profits. That is in the middle of a severe recession.

As this chart shows, the combined annual profits of the five largest oil companies during the last 10 years--these five companies, ExxonMobil, Shell, BP, ChevronTexaco, and ConocoPhillips--earned over $750 billion in profits. Not bad. Not bad.

During the first quarter of this year, big oils' profits increased by 85 percent. Instead of using these profits to invest in renewable energy and to prevent oilspills, big oil and gas companies are primarily using this money to buy back their own stock and enrich their CEOs.

According to the American Petroleum Institute, between 2000 and 2007, the entire oil and gas industry invested only $1.5 billion in North American nonhydrocarbon investments aimed at reducing the Nation's dependance on oil. That is less than one-quarter of 1 percent of their total profits during this time period. So here you have these companies making huge profits. They are not reinvesting that money in making our country cleaner and in moving us away from fossil fuels.

Meanwhile, the CEOs of the big oil companies have received hundreds of millions of dollars in retirement packages and total compensation. Over the past 5 years Ray Irani, the CEO of Occidental Petroleum, received over $725 million in total compensation--$725 million, in a 5-year period, is not too sloppy.

John Hess, the CEO of the Hess Oil Company, has received over $240 million in total compensation; David Lesar, the CEO of Halliburton, has received over $114 million; James Mulva, the CEO of ConocoPhillips, has received over $95 million; and Rex Tillerson, the CEO of ExxonMobil, made over $30 million in total compensation over the past 5 years.

Further, since 2002, the five largest oil companies have repurchased almost $270 billion of their own stock. When we talk about asking the oil companies to start paying their fair share of taxes, we should also remember that the Federal Government has provided very generous subsidies above and beyond tax breaks for the oil companies. As this chart shows, according to the Environmental Law Institute, from 2002 to 2008, the United States provided more than $70 billion for fossil fuel subsidies, compared to just $12 billion for wind, solar, geothermal, biomass, and other renewable energy. This makes no sense at all. We have got to put an end to the outrageous tax breaks and subsidies we have been giving to oil and gas companies.

But that is not all this amendment would do. This amendment would also invest $10 billion into the Energy Efficiency and Conservation Block Grant Program. The American Recovery and Reinvestment Act provided $3.2 billion for this highly successful program. It is already having a very positive impact in creating jobs, in saving energy in all 50 States of our country.

I am now quoting from a letter sent, in support of the $10 billion block grant funding that this amendment provides, from Tom Cochran, the executive director of the U.S. Conference of Mayors. This is what Mr. Cochran says:

Throughout the United States more than 1,200 cities are now receiving direct funding under the EECBG program. We strongly support your efforts to secure predictable and ongoing funding for the EECBG program allowing the nation to continue to invest in these successful local energy and climate initiatives which have been shown to reduce energy use, harmful greenhouse gas emissions and environmental degradation.

Let me give you some examples of how this program, of which this amendment would provide $10 billion over a 5-year period, is working. This program is helping to build wind turbines in Carmel, IN, to power a city sewer treatment plant. It is being used in Salt Like City, UT, to provide loans to businesses to make energy efficiency upgrades. It is being used in Columbus, OH, to make 29 public buildings more energy efficient. It is being used in Portland, ME, to retrofit 55 public buildings. It is being used in Miami to convert landfill gas into the production of electricity. It is being used in New York City to help homeowners and businesses with energy efficiency and renewable energy loans, among many other areas.

I know in my State of Vermont, dozens and dozens of communities and
schools are using this money to make their buildings more energy efficient and, in some cases, move to sustainable energy. We need to keep these investments in energy efficiency and conservation going. That is exactly what this amendment would do to the tune of $10 billion.

Finally, this amendment would dedicate $25 billion for deficit reduction, $10 billion for the block grant program to make our country more energy efficient. And the $25 billion for deficit reduction at a time of record-breaking deficits and debt, we simply cannot continue to give oil and gas companies huge tax breaks.

I know it is easy for some of my colleagues to come to the floor and talk about the deficit, talk about the debt we are leaving our kids and grandkids. It makes for great rhetoric. But, occasionally, you are going to have to stand up if you are serious about the debt and deficit and take on some of those very powerful special interests who are getting huge tax breaks, do not need those tax breaks and do not deserve those tax breaks. It is more important to protect our kids and grandchildren here and the deficit than it is to give tax breaks to ExxonMobil. When it comes down to it, this amendment asks a very simple question: Which side are you on? Are you on the side of big oil and gas companies, companies that year after year after year are making huge profits or are you on the side of reducing the deficit, reducing our dependence on oil, saving consumers and businesses money on their energy bills, and saving the planet we live on? That is what this amendment is about.

I understand that there will be opposition to this amendment. I have seen it surface already. After all, since 1990, the oil and gas industry has made over $238 million in campaign contributions. And over the past 2 years alone, this industry has spent $210 million on lobbying, probably half a billion dollars since 1990 on campaign contributions and lobbying. They have gotten a lot for that, I must confess. For that investment, they have gotten a lot in tax breaks and subsidies. But I think now is the time, given the oilspill in the gulf, because of the threat of global warming, in order to clean up our country, in order to create jobs and energy efficiency and sustainable energy, we have got to say to big oil: Sorry. No more. No more. You are going to have to start paying your fair share of taxes so we can transform our energy system and so we can begin to deal with this very serious deficit problem.

This amendment is the right thing to do for deficit reduction. It is the right thing to do to transform our energy system. It is the right thing to do for consumers. I ask my colleagues to vote for the amendment.

I yield the floor and I suggest the absence of a quorum.

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