Senator John Thune (R-SD) protected billions of dollars in taxpayer funded giveaways to Big Oil companies instead of tackling the deficit.
Senator Thune voted today to kill the Close Big Oil Tax Loopholes Act, sponsored by Senator Robert Menendez (D-NJ), which would have eliminated billions of dollars a year in federal subsidies for the five most profitable oil companies in the world and directing the savings to deficit reduction.
Ben Nesselhuf, Chairman of the South Dakota Democratic Party, questioned Thune’s commitment to lowering the federal deficit. “What Senator Thune is saying to South Dakotans is that the billion dollar profits of the top 5 oil companies are more important than the burdened pocket books of South Dakotans and the burgeoning deficit of the federal government.”
The price of gasoline has hit consumers hard as profits at the top five oil companies have surpassed $1 trillion over the last decade. In the first calendar quarter of 2011, for example, ExxonMobil reported profits of nearly $11 billion in the first quarter of 2011, a 69 percent increase; Shell reported profits of $7 billion, ConocoPhillips reported profits of $3 billion; Chevron reported $6.2 billion; and BP reported $5.5 billion. Combined, they earned $32 billion so far this year.
When gas prices surged in 2006, Thune himself questioned the need for subsidies for big oil stating, “If, in fact, [oil companies] are making such enormous profits, then perhaps they don’t need the support and the tax incentives that are given to them by the American taxpayer.”
Just a few months earlier, Jim Mulva, the CEO of ConocoPhillips, made similar remarks. Mulva said in federal testimony, “with respect to oil and gas exploration and production we do not need incentives.” Mendendez noted in a memo circulating the Senate that skyrocketing oil profits have led to larger stock buybacks and dividends instead of further investment in drilling and exploration.
Nesselhuf wondered what caused Thune’s change of heart. “Thune called for an end to oil subsidies when oil profits were half their current value and our deficit was much less severe. Why would Thune think protecting billions in taxpayer funded expenses on big oil is more important than protecting cancer research and student loans?”
What’s Thune’s bottom line? “Sacrifice belongs to South Dakotans. Billions in subsidies belong to Big Oil,” Nesselhuf concluded.
The Joint Committee on Taxation, a nonpartisan committee of the U.S. Congress, says the legislation, Close Big Oil Tax Loopholes Act (S. 258), would raise $33 billion over ten years. All savings from the bill would be directed to deficit reduction.
Contact Chairman Ben Nesselhuf at 605-271-5405 or email@example.com.
Thune Protects Taxpayer Funded Giveaways for Big Oil
Thune votes to protect Taxpayer Funded Givewaways for Big Oil on motion to proceed on S.940, the Close Big Oil Tax Loopholes Act (60-vote threshold). [S.940, 5.17.11]
Close Big Oil Tax Loopholes Act
Senate Democratic leaders and several politically vulnerable members of their caucus are introducing legislation Tuesday that would repeal several tax breaks for the largest oil companies… Sen. Robert Menendez (D-N.J.), the lead sponsor, is circulating a letter to colleagues – obtained by The Hill – that seeks to capitalize on recent statements from some top House Republicans that suggest they’re open to rolling back some industry incentives.
“Currently, instead of using their enormous revenues to invest in drilling as they say they are, the Big 5 oil companies are buying back stock and issuing dividends.” (Full letter available on hyperlink) [thehill.com, 5.10.11]
Thune Calls to End Oil Subsidies
“If, in fact, [oil companies] are making such enormous profits, then perhaps they don’t need the support and the tax incentives that are given to them by the American taxpayer.” (US Senate, April 2006)
Big Oil Does Not Need Incentives
James Mulva, CEO of ConocoPhillips giving federal testimony on Energy Prices and Profits “Senator, with respect to oil and gas exploration and production we do not need incentives.” [Joint Hearing, Committee on Commerce, Science, and Transportation and Committee on Energy and Natural Resources, 11.9.05]
Savings of $33 billion over 10 years.
Menendez’s Close Big Oil Tax Loopholes Act has been scored by the Joint Tax Committee and would raise $33 billion over 10 years. The bill contains important safeguards to allow refineries and oil companies with yearly revenues of less than $100 million to retain certain tax credits and deductions. [Official Press Release, 4/7/11]