(WASHINGTON) — A last-minute entreaty by President Obama wasn’t enough to convince senators to strip the oil and gas industry of billions in tax incentives.
The president said Thursday that Americans are getting fleeced by an oil industry awash in profits — pinched at the pump by rising prices and forking over billions in taxpayer cash, and he put his weight behind a Senate bill that would repeal these tax breaks.
“Think about that. It’s like hitting the American people twice,” Obama said in a Rose Garden press conference, just before senators considered a bill that would roll back many such tax incentives for oil companies.
“They can either vote to spend billions of dollars more in oil subsidies that keep us trapped in the past. Or they can vote to end these taxpayer subsidies that aren’t needed to boost oil production so that we can invest in the future,” Obama said. “It’s that simple.”
Less than an hour later, Republican senators were joined by a handful of Democrats in the Senate to reject a bill that would do just that. They argue it would raise gas prices even more. The “Repeal Big Oil Tax Subsidies” bill failed to advance by a vote of 51-47. It needed 60 votes to overcome a procedural hurdle.
The bill would have killed several tax breaks taken by the five largest oil companies and use some of the proceeds to extend expiring energy tax provisions, such as tax breaks for renewable energy, electric cars and energy efficient homes.
Senate Democrats, mostly from oil-rich states, were not supportive of the legislation. They included Sen. Mark Begich, D-Alaska, Sen. Mary Landrieu, D-La., Ben Nelson, D-Neb., and Jim Webb, D-Va. Voting with the Democrats was Sen. Olympia Snowe, R-Maine.
President Obama had argued the tax breaks were more than Americans could afford.
“Last year the three biggest U.S. oil companies took home more than $80 billion in profits. Exxon pocketed nearly $4.7 million every hour. And when the price of oil goes up, prices at the pump go up, and so do these companies’ profits,” he said, adding, “In fact, one analysis shows that every time gas goes up by a penny, these companies usually pocket another $200 million in quarterly profits.”
Obama said the tax incentives for energy companies –which allow them to pay a lower effective tax rate than other companies — are outdated and prime examples of a systemic unfairness that compounds frustration among consumers.
“It’s not as if these companies can’t stand on their own. American oil is booming,” Obama said. “With high oil prices around the world, they’ve got more than enough incentive to produce even more oil.”
But Republicans say Obama is calling for an effective tax hike on oil companies that would in turn be passed on to consumers in the form of even higher gas prices. Current nationwide averages are hovering near $4.00 per gallon.
Copyright 2012 ABC News Radio
Brian Stelter, CNN Newswire
Sam Turner, Deseret News