Senate Democrats believe they could save $21 billion over the next decade by eliminating tax breaks for the nation's five biggest oil companies. Such a move is seen as being a hugely popular proposal involving what Democrats see as a prime example of wasteful giveaways in the tax code. By raising the issue, Democrats are trying to force Republicans either to drop their stance against new taxes or to defend taxpayer subsidies for some of the world's most profitable corporations.
Their proposal would close several long-standing tax loopholes, yielding roughly $2 billion a year in savings to be applied to lowering the deficit. It would affect only the five largest oil companies, excluding smaller producers. According to Senate Majority Leader Harry Reid, D-Nev., the plan could be voted on next week.
Senator Robert Menendez, D-N.J., who sponsored the oil subsidies bill, highlighted the most recent quarterly profits from the five largest oil multinationals, which totaled $35.8 billion.
"Do you think working-class families should be the only people sacrificing to help lower the deficit?" Menendez said. "Do you think the wealthy and powerful should pay their fair share to help balance the budget, or should we simply let their high-priced lobbyists shield them from their responsibilities?"
Top executives from the five big oil companies are scheduled to testify before the Senate Finance Committee on Thursday.
Meanwhile, White House budget talks, which continued this week, are expected to stretch into the summer. The issues of cuts to Medicare and other entitlement programs have been temporarily set aside as lawmakers from both parties work with Vice President Biden to try to identify areas of common ground. The main goal of the talks is easing passage of a significant increase in the debt limit, currently set at $14.3 trillion. Treasury Secretary Timothy F. Geithner has said he can pay the nation's bills through Aug. 2 without fresh borrowing, but thereafter the United States would run the risk of default.