Offshore Production and Safety Act of 2011-Motion to Proceed
OFFSHORE PRODUCTION AND SAFETY ACT OF 2011--MOTION TO PROCEED
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Mr. SCHUMER. Mr. President, first, even though I do not agree with him, it is always a pleasure to listen to my friend from Utah give his arguments. But I will just give mine instead of talking to him. I will just remind him of one thing. This bill is not intended to lower gas prices; it is intended to reduce the deficit. It clearly does that.
If my colleague cared so much about reducing that deficit, the oil companies are a good place to start. The money does not go for spending, it goes for deficit reduction.
Anyway, I rise today in support of the legislation authored by my good friend from New Jersey, Senator Menendez. Senator Menendez has championed this legislation for quite some time. I applaud the work he has done to build support for it.
As you know, our leader, Senator Reid, has scheduled a vote on it in just a few minutes. I sincerely hope the bill will pass. Nothing would be better in terms of showing bipartisanship and giving the American people hope that we can come to a fair agreement on our long-term fiscal challenges than to pass this legislation today.
In the last election voters gave those of us who serve in this Chamber two distinct mandates: First and perhaps foremost, they said: Make the economy grow. Create good-paying jobs. Make sure that American dream which says the odds are higher you will do better 10 years from now than you are doing today, and the odds are higher still your kids will do better than you, that American dream, make sure it burns brightly.
Some have wondered if it is beginning to flicker, and their mandate to us in this election was get that candle glowing again. But, second, they said do something else at the same time. They said in no uncertain terms: Reign in the out-of-control Federal deficit. They told us to take the bull by the horns and confront our mounting debt.
On that point, I will agree with my colleague from Utah. Now, it is very hard to accomplish one of these two goals. To accomplish both at once is a Herculean task. There are many choices ahead, most of them rather difficult. That is why this is so hard. But one choice is not tough at all, not by a mile. It is obvious. At this time of fiscal restraint, when we have to make cuts that are so painful and hurt middle-class families, to continue to give big oil companies giant tax breaks makes no sense whatsoever.
Getting rid of these corporate subsidies to Big Oil is a no-brainer. Decades ago, when these breaks were enacted, oil was $17 a barrel. Maybe it made a modicum of sense in those days to give companies an incentive to explore and produce. But with the price of crude oil hovering at $100 a barrel, and Big Oil reaping record profits with every barrel they drill, it defies logic to spend billions of taxpayer dollars on these subsidies.
Believe me, the free market gives the oil companies enough of an incentive to produce. When oil is $100 a barrel, they certainly do not need a financial nudge from Washington. Now, at the same time, middle-class Americans get hit with a double whammy. They are paying $70 or more to fill that gas tank. Then, in addition, when they pay their taxes, some of those hard-earned tax dollars are being used to line Big Oil's pocket with these subsidies.
In my home State of New York, the price of gas is up 35 percent on average compared to this time last year. Economists estimate the typical family will pay as much as $1,000 more on gas this year than last--$1,000 a year. The average family makes about $50,000. It is so hard they sit around the dinner table after Friday night supper, mom and dad. They sit down and figure out: How are we going to pay these bills? How are we going to give our kids the life that we want to give them? And they are paying $1,000 more for gasoline. At the same time we are subsidizing oil companies.
Families across the country are still struggling to make ends meet as the economy slowly recovers. With billions of dollars' worth of tax subsidies and gas prices at record highs, it is no wonder the top five oil companies just announced jaw-dropping profits. These companies are not only among the most profitable businesses in the United States, they are among the most profitable in the whole world.
In the first quarter of this year alone, the big five brought in $35 billion in profit. In the past decade, they took home nearly $1 trillion--that is trillion with a ``t.''
There is nothing wrong with these profits in and of themselves; in America we celebrate success; we want the private sector to thrive. But at a time when the government is looking to tighten its belt and we are grappling with painful cuts, both because we have the dual goal of growing the middle class and also reducing the deficit, it boggles the mind that we continue to subsidize such a lavishly profitable industry.
Moreover, as my great friend and colleague, Senator McCaskill, highlighted this morning in a letter to the Federal Trade Commission, those record profits smell a bit fishy. There is a reason to suspect that some of the biggest oil refiners are artificially depressing supply in order to raise prices to pad their bottom lines.
I am proud to have cosigned Senator McCaskill's letter, as did the entire Democratic leadership team. I look forward to the FTC's response. I am also proud to cosponsor the Menendez bill we are considering today, Close Big Oil Tax Loopholes Act. The legislation will put an end to the taxpayer handouts to the five largest integrated oil companies and use the $21 billion in savings to reduce the deficit.
This $21 billion is an excellent downpayment on our effort to get the Nation's fiscal house in order.
The bill repeals a host of Byzantine tax provisions that only a lobbyist could love, such as the deduction for tertiary injectants and the deduction for intangible extraction costs. Small- and medium-sized oil firms are exempt. The legislation, even though some might like to go further, deals with the big five--ExxonMobil, Shell, Chevron, ConocoPhillips, and BP.
I have heard pundits from the hard right parrot Big Oil's talking point that repealing these giveaways would increase gas prices for consumers. The facts beg to differ. Last week, two major independent studies--one from the Congressional Research Service and another from the Joint Economic Committee--found that ending these absurd subsidies would not impact the price of gas. I compliment Senator Casey for his leadership on the second study.
In what was perhaps an inadvertent moment of candor at last week's Finance Committee hearing, ExxonMobil CEO Rex Tillerson said:
Gasoline prices are a function of crude oil prices, which are set in the marketplace by global supply and demand, not by companies such as ours.
When he made that comment, Tillerson of ExxonMobil conceded that repealing taxpayer-funded subsidies for Big Oil will not increase prices. Prices are set, as he says, by global supply and demand.
That is not to say repealing subsidies will necessarily bring down prices. We are not making that claim. All along we have been clear: The purpose of this bill is to make a dent in the deficit by repealing tax breaks for the five companies that are the least in need of help from Uncle Sam.
Lowering the cost of gas and ridding our country of its dependence on foreign oil requires a long-term, comprehensive approach. In the months ahead, I expect the Democratic caucus will unveil a thorough and forward thinking plan to do just that.
In the meantime, I say to every one of my colleagues on the other side of the aisle: If they are serious about deficit reduction, the Menendez bill is their chance to show it now. There is no good reason not to support this sensible legislation sponsored by my friend and colleague from New Jersey.
Just try to wrap your head around it: Big Oil is reporting record profits, gas prices are near an all-time high, and we, the American taxpayers, are subsidizing the oil industry to the tune of $4 billion a year. One needs the imagination of ``Alice in Wonderland'' 's Lewis Carroll to come up with a more ridiculous scenario.
The bottom line is this: At a time of sky-high prices, it is unfathomable to continue to pad the profits of companies with taxpayer-funded subsidies. The time to repeal these giveaways is now.
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