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Dems put oil company subsidies on table

May 11, 2011 at 9:25 AM   |   Comments

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WASHINGTON, May 11 (UPI) -- A plan to save $21 billion during the next decade by erasing tax breaks for the top five U.S. oil companies was unveiled by Senate Democrats.

The plan, designed to counter Republican demands to control the skyrocketing national debt sans new taxes, gives Democrats the opportunity to cast the solution to the debt crisis as one that needs new revenue and spending cuts, The Washington Post reported Wednesday.

President Obama has urged Congress to repeal tax breaks to big oil companies, some of which have been in place since 1920.

The proposal came in response to House Speaker John A. Boehner remarks Tuesday that tax hikes were is "off the table." During a speech Monday, he demanded more than $2 trillion in spending cuts in exchange for GOP support to increase the debt ceiling.

"We should not be drawing lines in the sand," Senate Majority Leader Harry Reid said Tuesday. "It has to be a fair approach to balancing the budget. We have to do something with domestic [programs]. We have to do something on defense. And, of course, we have to do a better job with taxes."

By focusing on ending subsidies for big oil companies, Democrats are trying to force Republicans to either abandon their opposition to new taxes or defend taxpayer subsidies for some of the world's most profitable corporations, observers told the Post.

Republican leaders reiterated their resistance to tax increases, whether through elimination of subsidies or other changes in the tax code.

"We're not going to raise taxes," Senate Minority Leader Mitch McConnell said. "That was decided in last November's election. I think the American people pretty clearly believe that we have the deficit problem because we spend too much, not because we tax too little."

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