Sessions: Reid has no reason to assume debt ceiling agreement will include oil tax hikes

posted at 6:06 pm on May 19, 2011 by Tina Korbe

Senate Majority Leader Harry Reid has said he is “confident” a final agreement about the debt ceiling will include the repeal of tax breaks for oil companies — but Sen. Jeff Sessions (R-Ala.) today said Republican leadership would likely resist any effort to include such a tax hike in the debt limit debate.

“If there’s any opportunity to get an agreement on [the debt ceiling] — and there should be, it can’t be used as a vehicle to advance more narrow agendas,” Sessions said on a conference call with bloggers. “So, I would certainly resist that, and I would expect that to be successfully resisted by our leadership. … Our leadership — I’m talking about in both the House and the Senate — would be able to reject that some way.”
The Senate this week already rejected Democrats’ first attempt to eliminate tax breaks for the big five oil companies — Exxon, Shell, BP, ConocoPhillips and Chevron. The “Close Big Oil Tax Loopholes Act” never stood much of a chance in the first place, as at least one Democrat admitted, but Reid and other Democrats want to give it an encore on the debt limit stage anyway.

Senior Democrats are increasingly signaling that industry subsidies must be on the table in broader deficit talks between Capitol Hill Democrats, Republicans and the White House.

The talks are unfolding ahead of a high-stakes vote expected this summer to raise the debt ceiling. The timing of a vote to raise the ceiling is unclear, but is expected this summer before Aug. 2, when the Treasury Department has warned it will no longer be able to meet all its financial obligations.

Sen. Robert Menendez (D-N.J.) said late last week that Democrats will “insist” on addressing the oil tax issue in broader budget talks. And Sen. Charles Schumer (N.Y.), a member of the Democratic leadership team, said Menendez’s view is widely held in the caucus.

But Sessions isn’t alone, either. Even Democrats who want to roll back the tax incentives for oil companies don’t think the debt limit debate should hinge on them. Sen. Claire McCaskill (D-Mo.) has said “we can no longer afford giveaways to oil companies,” but her spokeswoman says the senator still doesn’t think an agreement on the debt ceiling should be “held hostage” to such a proposal.


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Don’t raise the debt ceiling. Just don’t. Don’t even talk about it.

parteagirl on May 19, 2011 at 6:15 PM

Butter, meet bread.

Most of the profits that oil companies realize are forwarded to share holders (that would be quite a few folks) as dividends on their investments, or shoveled (should I say drilled?) into new research, exploration, or expansion.

So just how, exactly, would the Gubmit eliminating or scaling back tax breaks be helpful to anyone other than free-spenders in DC?

If they want to discuss cutting back on tax breaks, perhaps we should insist they cut back on waste, regulations, and free-wheeling TARP-style give-aways first. Then an overhaul of the tax systems, moving then to getting the UN to move it’s headquarters to Tehran, Riyadh, or perhaps Liberia.

Robert17 on May 19, 2011 at 6:16 PM

Why is the Senate talking about raising the debt limit. Sounds like that would be the House’s turf.

If the Senate can, does the House have to approve it, too?

davidk on May 19, 2011 at 6:18 PM

“If there’s any opportunity to get an agreement on [the debt ceiling] — and there should be, it can’t be used as a vehicle to advance more narrow agendas”

Is there something more than this, Tina? I’m disappointed in the casual and ambiguous nature of his characterization on Reid’s proposal. Whether you call them tax incentives or loopholes or tax breaks, they relate directly to real costs of doing business. The government changing the way these costs are treated doesn’t make them go away for the oil companies and they will just recoup those cost via higher prices, which means higher prices. The net effect is that:

– the government get’s more money to spend (or less they have to cut),
– the Dems will have effectively increased taxes on everyone.

Dusty on May 19, 2011 at 6:41 PM

Let’s talk about agricultural subsidies first, Harry. After all, they are true subsidies, not tax deductions available to every corporation in America like your fallacious ‘big oil subsidies’, and they are far, far larger and more detrimental to both the market and the taxpayer.

Hiya Ciska on May 19, 2011 at 6:42 PM

Sen. Claire McCaskill (D-Mo.) has said “we can no longer afford giveaways to oil companies,”

Oil companies are the most heavily taxed industry in the country. They are giving away nothing, just allowing them a few of the same tax deductions that every other business in the country gets.

Halliburton has already left the country. Are they trying to drive the oil compaines out too? Rhetorical question, of course.

iurockhead on May 19, 2011 at 6:42 PM

There are no “big oil subsidies.”

The democrats are merely proposing to suspend all normal accounting rules for oil companies and tax the hell out of them!!! …and they think they’ve invented a cute way to lie about what they are trying to do.

This new tax would, of course, raise the price of gas, oil, food, and everything else for everyone!!!

NO NEW TAXES!!!

DRILL BABY DRILL!!!

NO HIGHER DEBT CEILING!!!

landlines on May 19, 2011 at 6:47 PM

SHUT IT DOWN! ALL OF IT!

GarandFan on May 19, 2011 at 7:45 PM

If the write offs (not subsidies) are done away with for “Big Oil” then they should be done away with for all businesses, as they are not specific “oil” write offs, but business write offs. Get rid of them? Fine, but do it across the board and reap the whirlwind that follows.

Koa on May 19, 2011 at 8:13 PM

You all do realize that you get rid of the write off’s that everything is going to go way up?

*shakes head*

upinak on May 19, 2011 at 9:12 PM

upinak on May 19, 2011 at 9:12 PM

Of course. Sometimes pain is the best teacher.

Koa on May 19, 2011 at 9:31 PM

Progressive Liberal Socialist Democrat POSTURING, all revenue bill must originate in the House, oh but the PLSD do not follow the Constitution either…

mathewsjw on May 20, 2011 at 1:04 AM

If we cannot afford giveaways to big oil then we cannot afford larger giveaways to farmers, states, other nations, and bazillions of other things that might save us even more. We cannot even afford to expand the debt limit, Harry.

Alas, cutting all those “fat” items will not stop the debt expansion. We need to cut serious meat out of the “mandatory” portion of the budget, like almost all of it, and then some more is needed out of medicare, medicaid, and Social Security.

Harry, your nickle and dimeing a Grants and Bennies problem is disgusting.

{^_^}

herself on May 20, 2011 at 7:17 AM

So the want to end IRS Section 199 for oil companies ?

Sec. 199. Income attributable to domestic production activities.

Doesn’t this mean that they want to end domestic oil production ? What am I missing ? .. or is it me who is missing the point ?

J_Crater on May 20, 2011 at 9:56 AM