Oil Subsidies, Hypocrisy & A Politician Near You

With each and every passing day I am getting more & more sick of watching Congressional Republicans sit on their “high horse” (funny, I thought you had to have morals to take the moral high ground) and tell us we have to “make tough choices on the budget” as they continue to let big oil suck off the taxpayers tit.

Just as they have done all this year during the debate on the yearly government spending bill, late last month Republicans in the House rejected eliminating egregious loopholes and tax breaks given to the oil companies, voting down an amendment that would have recovered up to $53 billion in taxpayer funds from oil companies.

The amendment — offered by Reps. Edward J. Markey (D-Mass.), Maurice Hinchey (D-N.Y.), George Miller (D-Calif.) and Lois Capps (D-Calif.) — was voted down by a 251-174 vote.

The amendment to the Republicans’ spending bill would have fixed a flaw put in place by a Republican-controlled Congress in 1995 and seek to recover funds from faulty drilling leases in the Gulf of Mexico that allow oil companies to drill without paying any royalties.

The Government Accountability Office (GAO) has estimated that taxpayers could lose up to an additional $53 billion over the next 25 years as a result of royalty-free drilling when oil prices are high. The Interior Department also informed Rep. Markey that American taxpayers will lose $1.5 billion just this year from this free drilling.

“Republicans once again sided with BP, Exxon and the oil companies, not with the American taxpayer and the poorest Americans most in need of help. This legislation focuses on just the kind of special interest loophole that should be closed before we open attacks on programs for the poorest Americans,” said Rep. Markey. “The biggest oil companies are already getting 100 year-old tax breaks to sell $100 a barrel oil to make $100 billion a year in profits. They don’t need a $53 billion windfall courtesy of American taxpayers and our national deficit.”

“These hugely profitable companies are tapping oil and gas reserves that belong to the American People, selling it back to us,and then reaping a massive profit on the backs of middle-class families,” said Rep. Hinchey. “But the real kicker is that these oil companies are not paying one red cent to the public for the oil and gas they have extracted from publicly owned resources.

They get it for free – and we pick up the $53 billion tab. American taxpayers are getting ripped off. It’s too bad the Republican majority has once again decided to protect big oil at the expense of taxpayers.”

“Republicans want you to think their spending bill is about making tough choices – but it isn’t. It isn’t tough to take away Head Start or Pell Grants from poor students,” said Rep. Miller. “It’s much tougher to fight big oil and gas companies for this $53 billion that rightfully belongs to the taxpayers. And apparently it’s too tough for House Republicans: once again they’ve sided with big oil against the taxpayer.”

“Although the outcome of this vote was disappointing, it comes as no surprise,” said Rep. Capps. “This should have been a no-brainer – make the nation’s biggest oil companies pay to keep drilling on the public’s land, or they won’t be able to buy new leases from the federal government.  But Big Oil and their friends in Congress continue to stand in the way of fixing the royalty relief law.  And as a result, taxpayers will keep pouring billions of dollars into already stuffed oil industry coffers.  It’s long past time to end this windfall and protect taxpayers.”

They followed this disgusting display of support for the oil barons on March 1st, when they voted in lockstep this to protect corporate welfare for Big Oil, even as they call for draconian cuts to programs that everyday Americans depend on each day.

As the House of Representatives moved toward approving a stopgap resolution to avert a government shutdown for another two weeks, Democrats offered a motion to recommit that would have stripped the five largest oil companies of taxpayer subsidies, saving tens of billions of dollars in taxpayer funds.

The motion failed on a vote of 176-249, with every single last Republicans voting against (approximately a dozen Democrats joined the GOP -_-).

As we make a transition to clean energy, and yes that IS something we really should get moving on, we should also applaud the President’s call to eliminate billions of dollars in annual subsidies for the oil industry.

What should you know about taxpayer subsidies for oil companies? For starters, last year, the President’s fiscal year 2011 budget (PDF) proposed to eliminate eight different tax breaks for oil companies, which could save about $36.5 billion over 10 years, or nearly $4 billion per year.

And that’s just at the federal level. Some state governments offer the oil industry even more taxpayer support. For example, in 2006, the Texas oil and gas industry received $3.5 billion in federal subsidies and $1.4 billion from the state.

The same oil companies that receive these subsidies enjoy nearly unfathomable profits every year. Exxon just announced its largest quarterly profit in more than two years, at $9.3 billion for the fourth quarter, and $30.5 billion for all of 2010. Chevron announced $5.3 billion in profits for this quarter, and $19 billion for 2010. This year, the total profits for the biggest five oil companies are expected to be around $74 billion.

The former CEO of Shell Oil, John Hoffmeister, recently said Big Oil doesn’t need subsidies “in face of sustained high oil prices.”  From 2005 to 2009, the largest oil companies have made a combined $485 billion in profits.

Yes, you read that right.  One half of a decade led to one half of a trillion dollars in profits for just the top half dozen companies in the business.

Clearly, they don’t need extra money from taxpayers. But as the New York Times explains, some of these subsidies “date back nearly a century” to a time when the industry was new, and the government wanted to encourage prospecting for those fabled gushers of oil. Other subsidies are more recent: The 2005 Energy Policy Act includes billions of dollars in tax and royalty relief for oil and gas drilling.

Cutting these subsidies won’t put the oil companies out of business. But it would save taxpayers billions of dollars and allow us to devote our resources to the clean energy opportunities of the 21st century — and end our reliance on oil.

As the President put it, the oil companies are “doing just fine on their own. So instead of subsidizing yesterday’s energy, let’s invest in tomorrow’s.”

I don’t care where the hell you sit on the political fence.  Liberal, conservative, independent or a card carrying member  of the wtfjusthappenedandwhydoesmybuttstillhurt party…this is some bullshit that cannot be defended.

If you think you can offer up one non-sarcastic, factually-supported justification for why we should even think about continuing this policy I want to hear it.

As America struggles to extricate itself from a stagnating economic morass, Republicans have cut programs that benefit all Americans while refusing to cut military spending or raise taxes on corporations and the wealthy.

The madness cannot go on forever though and if the current trend of transforming America into a third world economy continues, corporations and the wealthy will not have anyone to buy their products or services.

Republicans are not feeling overly generous to the oil industry on a whim; they are protecting future campaign contributions and pacifying their corporate masters like the Koch brothers (you keep hearing about this name for a reason people) and conservative think tanks who control the conservative part of the media.

It is much easier to cut services for the poor and gut programs that protect the environment than to raise the ire of conservatives. There were 12 Democrats who voted with Republicans to continue oil subsidies, so in fairness, selling out to big oil is not limited to Republicans; there are sleazy politicians on both sides of the aisle.

However, every Republican voted to extend the subsidies much like most Republicans are attempting to eliminate collective bargaining arrangements with unions. If states were as cash-strapped as they claim, they would not continue giving tax breaks to corporations that add to the deficits would they?

Republicans cannot even be bothered to make compromises by rolling back corporate tax breaks and eliminating some programs that are redundant or wasteful. It is just not in Republicans’ DNA profile to raise taxes on the wealthy or corporations. It just isn’t.

At the rate the country is going now, the disappearing middle class means less spending on goods and services that will eventually sink corporations.

Unfortunately, as the middle class disappears so does tax revenue; that means Republicans can cut more services to the increasing ranks of the poor and the cycle continues.

The perfect place to start changing that core philosophy is on THIS issue because it is morally and economically indefensible.

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One thought on “Oil Subsidies, Hypocrisy & A Politician Near You

  1. Pingback: Fortune 500 Companies Post $10 Trillion In Earnings (But Cannot Produce Jobs) « The Rantings & Ravings Of A (Formerly) Mad Mailman

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