The Senator delivered the following remarks today on the Senate floor.

May 16, 2011

As prepared for delivery:

Mr. President, today we are considering an important piece of legislation that would reduce our deficit by ending needless subsidies for the nation’s largest oil companies.

At a time when Americans are paying these companies four dollars for a gallon of gasoline, it might be surprising to some that these same companies are receiving four billion dollars a year in subsidies from the American Taxpayer.

This legislation would end six of these separate tax handouts.  One of them repeals a provision that essentially amounts to a subsidy for foreign oil production. A second closes a loophole that lets oil companies drill for free on public lands in the outer continental shelf. And another ends a practice that lets oil companies manipulate the numbers when deducting the cost of new wells from their taxes.  Under current law, they can sometimes deduct more than they actually paid to build the well.

With families and small businesses nationwide struggling to pay over four dollars a gallon for gas, the five largest oil companies in the US collectively made nearly one trillion dollars in profits over the last decade.

Yet, because of unnecessary and outdated tax subsidies, Exxon Mobil paid no U.S. income tax at all in 2009.  With record deficits, ending these giveaways is a common sense first step toward fixing the federal budget.

I’ve heard some people who are in favor of these giveaways say that we need them so the oil companies keep prices low.  But the non-partisan Congressional Research Service last week issued a report that said rolling back these tax handouts won’t raise gas prices. With prices so high, they said, oil companies will do all they can to maximize production from all existing wells, and the oil supply will remain unchanged. A barrel of oil is selling for far more than it costs an oil company to produce it. These subsidies are doing nothing to make gasoline cheaper.

The former CEO of Shell Oil Company spoke about drilling subsidies in February and said, “with high oil prices, such subsidies are not necessary.”

But let’s be clear, this legislation isn’t about punishing the oil companies for doing well; it’s about reducing the deficit and making smart policy choices with our limited resources.  Tax breaks for big corporations are just spending under another name. And all government spending of taxpayer dollars has to come under scrutiny as we tackle our debt and deficits. We’re never going to get our massive deficits under control unless we’re prepared to eliminate outdated and unnecessary government programs. Providing tax handouts to one of the most profitable industries in human history, an industry that clearly needs no help from taxpayers, is a logical place to start.

Mr. President, as we emerge from this historic recession and grapple with our long-term deficits, we have to ask ourselves, what are our priorities? Investing in a next generation economy? Reducing the national debt we leave to our children? Or is it providing outdated tax breaks to one of the most profitable industries in the history of our nation?

Mr. President, I think the choice is clear.  I hope my colleagues join me in supporting this legislation to these wasteful giveaways, reduce the deficit, and strengthen our economy.

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