On Monday the Senate began the initial rounds of a high profile debate on a democratic plan to block the nation’s five biggest oil companies, Exxon Mobil Corp (NYSE: XOM), BP Plc (NYSE: BP), ConocoPhillips (NYSE: COP), Chevron Corp (NYSE: CVX), And Royal Dutch Shell (NYSE: RDS-A) from receiving government subsidies.
Passing 92 to 4, the debate over the bill has been fueled by continually-rising gas prices in America and will set the stage for what will become one of the most contested topics in the upcoming election year.
Aside from putting a halt to oil subsides the bill would also establish tax credits for alternative energy resources.
Sen. Robert Menendez, the bill’s chief sponsor, said Monday that the American people have become fed up with paying absurdly high gas prices while at the same time forking over taxpayer money to Big Oil in the form of subsidies, amounting to what he calls corporate welfare.
Menendez went on to say that taxpayer money currently going into oil subsidies should instead be spent on investments in alternative energy, which can develop alternatives to oil, creating more competition in the marketplace, thereby reducing gas prices.
If passed, Menendez claims the bill would knock $26 billion dollars off the Federal budget over the next decade.
The White House has formally backed the measure saying in a statement that the nation can no longer afford wasteful subsidies. Subsidies which the President has proposed repealing in his last three budget proposals.
Senate Minority Leader Mitch McConnell, Menendez’s chief opposition to the proposed bill, disagrees with Menendez’s claims saying:
“Democrats will propose raising taxes on American energy manufacturers – something common sense and basic economics tell us will lead to even higher prices at the pump.”
Fellow Republicans echo McConnell’s sentiments arguing oil companies will raise gas prices in order to account for higher production costs if the tax cut is repealed.
It is clear Republicans are diametrically opposed to ending the big oil tax cuts, but have said they are eager to take advantage of the 30 hours of debate time to highlight their concerns with Obama’s energy proposals and opposition to quickly building the Keystone XL Pipeline.
Until next time,