Imposing a Minimum Effective Tax Rate for High-Income Taxpayers-Motion to Proceed
Floor Speech
BREAK IN TRANSCRIPT
Mr. SANDERS. Mr. President, the skyrocketing price of gasoline is clearly causing tremendous hardship to American families all across this country, to small businesses to truckers to airlines and, in fact, to the entire economy. We are trying to claw our way out of this horrendous recession and the high price of oil and gas is not helping us.
I come from a rural State, and it is a State where people often drive 30, 40, 50 miles to work and back home again. Many of these workers make $10, $12, $14 an hour and when the price of gas goes up to $4 a gallon, this is money that is coming right out of their paychecks and it is money they can ill afford to pay. Many of them have seen stagnation in wages, and these high gas prices are doing their families severe harm.
Further, I think the American people understand that our good friends at the oil companies continue to do phenomenally well in terms of the profits they are making. In the last decade, the major oil companies in this country have earned $1 trillion in profits while gas prices have soared.
The Repeal Big Oil Tax Subsidies Act we are debating today is a step in the right direction. This legislation would repeal more than $20 billion in tax breaks to the big five oil companies, and use roughly half of this money to extend renewable energy tax credits and use the other half for deficit reduction. Over the past decades, our friends at ExxonMobil, among others, have seen more profits in ExxonMobil in a given year than any other corporation in the history of the world. Meanwhile, many of the largest oil companies over the years have paid little or no Federal income taxes. Let me give you an example.
In 2009, ExxonMobil--again, which has made more profit on a given year than any corporation in history. In 2009, ExxonMobil made $19 billion in profits while receiving a $156 million refund check from the IRS. How is that? A pretty good deal? It made $19 billion in profits, did not pay any Federal income taxes, and yet received a $156 million refund check from the IRS. Chevron received a $19 million refund from the IRS after it made $10 billion in profits in 2009. Not a bad deal. In 2009, Valero Energy, the 25th largest company in America, with $68 billion in sales, received a $157 million tax refund from the IRS. ConocoPhillips, the fifth largest oil company in the United States, made $16 billion in profits from 2007 to 2009 but received $451 million in tax breaks through the oil and gas manufacturing deduction.
At a time when the American people are getting ripped off at the gas pump, the last thing we need to be doing is giving big oil companies massive tax breaks which only add to our deficit and national debt crisis.
In my view, we have to do more than simply end these outrageous tax breaks that Big Oil has enjoyed. In my view, we must also end excessive oil speculation on the oil futures market. There has been a major debate over the last several years as to whether spikes in oil prices were caused entirely by the fundamentals of supply and demand or whether excessive speculation in the oil futures market is playing a major role.
That debate is over. That debate should be put to rest. Let's simply look at the facts. When we were in elementary school and in high school we learned what supply and demand is all about. When supply is high and demand is low, prices go down. When demand is high and supply is low, prices go up. The reality is, today the supply of oil and gasoline is higher right now than it was 3 years ago when the national average price for a gallon of gas was just $1.96 a gallon--more supply than 3 years ago when gas was $1.96 a gallon.
In terms of demand, the demand for oil in the United States today is at its lowest level since 1997. Internationally, during the last quarter of 2011, world oil supply exceeded demand by nearly 2 to 1, while at the same time crude oil prices increased by over 12 percent.
Let me recapitulate: Supply is high, demand is low. Yet oil prices are going through the roof. What is happening? There is a growing consensus within the business community, among economists, among people who study this issue, that the reason oil prices are soaring is excessive speculation on the oil futures market. That is the cause.
ExxonMobil, Goldman Sachs, the IMF, the St. Louis Federal Reserve, the Saudi Arabian Government, the American Trucking Association, Delta Airlines, the Petroleum Marketers Association of America, the Consumer Federation of America--all of these groups are involved in one way or another in studying oil prices. That is what they do because many of them are affected by high oil prices. Others of them are consumer groups studying the impact of high oil prices. All of them have agreed that excessive oil speculation significantly increases oil and gas prices. That is the conclusion more and more observers are making.
Interestingly enough, Goldman Sachs, perhaps the largest Wall Street speculator on the oil futures market, recently came out with a report indicating that excessive oil speculation is costing Americans 56 cents a gallon at the pump. This is the conclusion of Goldman Sachs, perhaps the largest speculator on the oil futures market.
I personally believe and many others believe that number is low, but it is important to understand we now have a major speculator telling us what excessive speculation is doing, in terms of gas prices.
Last year the CEO of ExxonMobil--not one of my best friends, not a company I particularly trust--ExxonMobil's President last year testified at a Senate hearing that excessive speculation on the oil futures market contributed as much as 40 percent to the cost of a barrel of oil. In fact, Bloomberg News reported on March 26, 2012, that:
According to Commodity Futures Trading Commission data, bets on rising gasoline prices advanced for 11 weeks through March 6 to the highest level in records dating back to 2006.
Gary Gensler, the chairman of the CFTC, has stated publicly that oil speculators now control over 80 percent of the energy futures market, a figure that has more than doubled over the last decade. In other words, the vast majority of oil on the oil futures market is not controlled by people who actually use the product. It is not controlled by airlines or trucking companies or fuel dealers--people who actually use the product. But over 80 percent of the oil futures market is controlled by speculators whose only function in life is to make as much profit as they can by buying and selling oil futures.
Let me list a few of the oil speculators and how much oil they were trading on June 30, 2008, when the price of oil was over $140 a barrel and gas prices were over $4 a gallon. On that day, Goldman Sachs bought and sold over 863 million barrels of oil. Morgan Stanley bought and sold over 632 million barrels of oil. Bank of America bought and sold over 100 million barrels of oil. The only reason these companies were on the oil futures market was to make as much profit as possible. They do not use the end product.
We have to make sure the price of oil and gas is based on the fundamentals of supply and demand and not Wall Street greed. To correct this problem I have introduced S. 2222 with Senators Blumenthal, Feinstein, Tester, McCaskill, Klobuchar, Levin, Franken, Sherrod Brown, Cardin, Mikulski, Casey, Bill Nelson, Begich, and Pryor.
This legislation--which I have also filed as an amendment to this bill--requires the CFTC to use all of its authority, including its emergency powers, to eliminate excessive oil speculation.
I should point out this emergency directive in our bill is identical--I want my Republican colleagues to hear this--is identical to bipartisan legislation that overwhelmingly passed the House of Representatives in 2008 by a vote of 402 to 19, with significant large-scale Republican support.
The Dodd-Frank financial reform bill stipulated very clearly that the CFTC needed to eliminate, prevent, or diminish excessive oil speculation by January 17, 2011, 14 months ago. They have not done it. The CFTC has not obeyed the law, and it is time for Congress to tell them their breaking the law is not acceptable and what they have to do is, in fact, to defend the consumers of this country.
In my view, what this legislation would accomplish is immediately curbing the role of excessive speculation in any contract market within the jurisdiction and control of the Commodities Future Trading Commission on or through which energy futures are trading--that is what this amendment does. It also eliminates excessive speculation, price distortion, sudden or unreasonable fluctuations or unwarranted changes in prices or other unlawful activity that is causing major market disturbances that prevent the market from accurately reflecting the forces of supply and demand for energy commodities.
The bottom line is Congress has to tell the CFTC to obey the law. They have to use their emergency powers to end excessive oil speculation. When we do that, I believe we will see oil prices go down.
I ask for bipartisan support of my legislation and thank all the cosponsors who are already on the bill.
I yield the floor.
BREAK IN TRANSCRIPT
Source