Despite (or maybe because of) presidential backing, S. 940, a bill to end millions of dollars in subsidies paid to oil companies, was defeated today in the Senate.
The Democratic plan to strip major oil companies of about $20 billion in tax subsidies over the next 10 years and use the savings to pay down the deficit was defeated 52-48 in the vote.
“The nation’s outdated tax laws currently provide the oil and gas industry billions of dollars per year in these subsidies, even though oil and gas prices are high and the industry is reporting out-sized profits,” said the Obama administration in a policy statement released before the vote.
Republicans staunchly opposed the bill, as did Democrats from oil-producing states, including Sens. Mary Landrieu of Louisiana and Mark Begich of Alaska, opposed the bill, and Democratic Sen. Ben Nelson of Nebraska.
According to CNN.com, Senate Minority Leader Mitch McConnell, R-Kentucky, said the Democratic bill would “raise the price of gasoline at the pump, export American jobs and make us more dependent on people like (Venezuelan President) Hugo Chavez because the amount of oil we’ll have to import will go up.”
The truth, of course, is that subsidies have done nothing but line oil executives’ pockets and artificially supress fuel prices for decades. In this way, oil companies have managed to back the American people into a corner: “Give us our subsidies or we’ll make it painful to drive that SUV!” Besides, the amount oil companies would “lose” if subsidies went away pales in comparison to their profits (see top image).
Why do we feel we’re entitled to cheap fuel? Other industrial nations have been dealing with the true, astronomial price of gas for years, and as a result, they have robust public transportation systems, and smaller, more fuel-efficient cars.
A White House statement called Tuesday’s vote “disappointing” and said efforts to end the subsidies would continue.
“The bottom line is that there are more responsible ways to spend tens of billions of federal dollars, including investments that will help protect American consumers from high gas prices,” said the statement by White House Press Secretary Jay Carney. “The vote today — with support from over half the U.S. Senate — is an important step towards repealing these unwarranted subsidies for the oil and gas industry.”
Image Credit: Flickr - Leader Nancy Pelosi