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Republicans reject Obama effort to cut oil tax breaks

PublishDate:2012-06-11 Source: Author:

Senate Republicans on Thursday shot down a proposal to slash subsidies for big oil companies, ignoring a plea by President Barack Obama to end tax breaks for firms "raking in record profits."

A narrow majority voted 51-47 for the Democratic measure, but 60 votes were needed to move it forward.

Obama, under election-year pressure about a surge in fuel costs, used a Rose Garden address to say the nation cannot afford the subsidies at a time of record budget deficits.

"The biggest oil companies are raking in record profits -- profits that go up every time folks pull into a gas station," Obama said.

"But on top of these record profits, oil companies are also getting billions a year in taxpayer subsidies -- a subsidy they've enjoyed year after year for the last century."

Shortly after the measure failed, the White House decried the "unfortunate vote."

Press secretary Jay Carney said senators "chose to side with oil and gas companies instead of the American people, who overwhelmingly support the notion that... at a time of record profits... the American taxpayer should not be subsidizing oil and gas companies."

The measure's main sponsor, Senator Robert Menendez, has said the top five petroleum companies made $137 billion last year, while producing four percent less oil than the year before.

Senators urging passage of the bill have noted how the big five earned a combined trillion dollars in profits in the past decade.

"With their votes, Republicans said loudly and clearly that they're on the side of Big Oil," Menendez said.

Obama sought to portray Republicans as supportive of subsidies that impose a double burden on the average American.

"You're already paying a premium at the pump right now. And on top of that, Congress thinks it's a good idea to send billions more of your tax dollars to the oil industry."

Obama is blamed by Republicans for doing too little to encourage domestic oil production, but the president argues that more drilling will not bring down prices.

"Instead of taxpayer giveaways to an industry that's never been more profitable, we should be using that money to double-down on investments in clean energy technologies that have never been more promising," Obama said.

Republicans quickly responded that Obama is out of touch with the problems of Americans and that his actions would be an effective tax increase.

"As smart as he is, the president still doesn't grasp the difference between a subsidy and a true business expense," Texas Representative Kevin Brady said.

"Raising taxes on our energy manufacturers -- and make no mistake this is what he's calling for -- will only mean less American-made energy, fewer American jobs and more expensive fuel at the pump. No wonder the Obama economy continues to struggle."

A poll released Thursday showed a majority of Americans blame the oil companies, not Obama, for high gas prices.

The survey conducted last weekend by CNN and ORC International showed seven in 10 Americans said the rising prices have caused hardship for their families.

Obama repeated his view that the United States should pursue a variety of energy initiatives -- a so-called "all-of-the-above" policy that includes oil and many alternative sources.

Senate Republican leader Mitch McConnell said Wednesday that the plan would offer no relief for Americans hurt by rising fuel prices -- which have hit around $4 per gallon.

"Gas prices have more than doubled under President Obama and the Democrat-controlled Senate," McConnell said.

"At a time when gas prices are at a national average of nearly $4 a gallon, this is what passes for a response to high gas prices for Washington Democrats -- a bill that does nothing about it... because they've got nothing -- nothing but a phony proposal aimed at distracting people from the fact that they have nothing to offer."

Oil futures slid Thursday amid suggestions that countries could soon tap their strategic petroleum reserves to dampen prices.

The White House said no such decision had been made on tapping the US strategic reserve.

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