Oil Company Tax Breaks

Floor Speech

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Mrs. SHAHEEN. Mr. President, I am pleased I could be here to hear our colleague from Florida talking so eloquently about the importance of ending the subsidies we are currently paying to the Nation's largest oil companies and about the importance of continuing to preserve the gulf and to make sure the regulations we put in place last year continue.

I appreciate his leadership on both of those issues, and particularly on protecting the gulf, which is a national treasure. So I thank very much our colleague from Florida, Senator Nelson.

I came down to the floor today to talk about the important legislation that is before us to reduce our deficit by ending the needless subsidies for the Nation's largest oil companies.

At a time when Americans are paying these companies $4 a gallon for gasoline--and in some places it is more than that--it might be surprising to some people out there that these same companies are receiving $4 billion a year in subsidies from the American taxpayer.

The legislation that is before us in the Senate right now would end six of these separate tax handouts. One of them repeals a provision that essentially amounts to a subsidy for foreign oil production. A second closes a loophole that lets oil companies drill for free on public lands in the Outer Continental Shelf. Another ends a practice that lets oil companies manipulate the numbers when deducting the cost of new wells from their taxes. Under current law, in fact, oil companies sometimes can deduct more than they actually paid to put in place the well.

While so many families and small businesses nationwide have struggled to pay the high cost of gasoline, the five largest oil companies in the United States collectively made nearly $1 trillion in profits over the last decade.

Yet because of unnecessary and outdated tax subsidies, ExxonMobil--the biggest oil company--paid no U.S. income tax in 2009. That is hard to explain to the small businesses in New Hampshire and Florida and Delaware that are struggling in this recession to pay their taxes, that the biggest oil company in the country that made the highest profits did not pay any taxes in 2009. With record deficits, ending those giveaways is a commonsense step toward fixing the Federal budget.

I have heard some people who are in favor of these giveaways say we need them so the oil companies can keep prices low. But as Senator Nelson so clearly put it, the nonpartisan Congressional Research Service said last week in a report that rolling back these tax handouts will not raise gas prices. With prices so high, they said, oil companies will do all they can to maximize production from all existing wells and the oil supply will remain unchanged. A barrel of oil is currently selling for far more than it costs an oil company to produce. These subsidies are doing nothing to make gasoline cheaper.

In fact, the former CEO of Shell Oil Company spoke about drilling subsidies last February, and he said: ``with high oil prices, such subsidies are not necessary.''

But I think it is important to be clear. This legislation is not about punishing the oil companies for doing well. We want all companies in America to do well. It is about reducing the deficit and our debt and making smart policy choices with our limited resources.

Tax breaks for big corporations are just spending under another name, and all government spending of taxpayer dollars has to come under scrutiny as we tackle our debt and deficits. We are never going to get our massive deficits and debt under control unless we are prepared to eliminate outdated and unnecessary government programs--and that means government programs that we support on the Democratic side of the aisle, and it also means outdated and unnecessary programs that our colleagues on the other side of the aisle support.

Providing tax handouts to one of the most profitable industries in human history--an industry that clearly needs no help from taxpayers--is a logical place to start.

As we emerge from this historic recession and grapple with our long-term deficits, we have to ask ourselves: What are our priorities--investing in the next-generation economy, reducing the national debt to leave to our children or is it providing outdated tax breaks to one of the most profitable industries in the history of our country? I think the choice is pretty clear.

I hope our colleagues will join us in supporting this legislation to eliminate these giveaways, reduce the deficit, and strengthen our economy.

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

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