At Big Oil hearing, Democrats attack tax breaks

ExxonMobil chairman and CEO Rex Tillerson laughs as he takes his seat on Capitol Hill May 12, 2011, prior to testifying before the Senate Finance Committee hearing with other top oil executives on high gasoline prices and high profits. / AP

Updated: 3:03 p.m. ET

WASHINGTON - A U.S. Senate Democrat is using the words of former oil company chiefs in an attempt to invalidate arguments the current group of corporate leaders is using to keep generous tax breaks.

With the heads of the five largest private oil companies watching at a hearing, Sen. Ron Wyden played a video of a 2005 hearing in which oil company executives said they did not need generous tax breaks because oil was selling at $55 a barrel. It is now above $100 a barrel.

Wyden said he could not understand why oil companies need tax breaks now, when oil is selling for nearly twice as much.

Chevron Corp. chairman and chief executive John Watson said the companies do not want special tax benefits -- just the benefits that other industries get.

Schumer seeks to end US subsidies of oil companies

Democrats are challenging whether oil companies really deserve tax breaks that add billions of dollars to their profits each year. Senate democrats have unveiled a bill that would repeal about $2 billion a year in tax breaks for the five largest oil companies, CBS News correspondent Nancy Cordes reports.

On Wednesday, five democratic senators released a letter to the executives, asking them to admit that they no longer need taxpayer subsidies. High oil and gas prices, they say, are enough incentive to explore for oil.

With the national average still close to $4 for a gallon, Americans continue to drive less. Demand for gasoline dropped 2.4 percent last week, the largest drop in seven consecutive weeks of declines. But pressure on lawmakers to show progress on gas prices remains high.

Democratic Sen. Max Baucus brought the CEOs before the Senate Finance Committee to say it's time to end special tax breaks for their companies, CBS Radio News' Bob Fuss reports.

"This is going to be incredibly difficult," Baucus said. "Everyone's going to have to give in a little bit."

Sen. Jay Rockefeller (D-W.Va.) argued that oil executives were "deeply out of touch" with the American people - a claim Exxon Mobil chief executive Rex Tillerson disputed.

"I want to assure you I'm not out of touch," he replied, arguing that tax hikes could cause the company to move investments out of the country.

Chevron CEO John Watson argued, additionally, that the targeted companies pay plenty of taxes - and that taking away these credits would result in less exploration and fewer jobs. The companies, he said, shouldn't be punished for making big profits.

Sen. Bob Menendez (D-N.J.) was not convinced.

"I find it hard to understand how you can come here before this committee and the American people and say, when you are projected to make $125 billion in profits this year," he said. "That somehow the loss of $2 billion a year, which means you only make $123 billion in profits, is somehow so punishing, somehow not part of shared sacrifice, somehow you need to go back at them at the pump to make up for it."

Sen. Orrin Hatch (R-Utah), however, was more sympathetic to the executives in question. Holding up a photo of a dog riding atop a pony, he slammed Democrats for taking cheap shots.

"This hearing should not be used to score cheap political points," he said, holding up the dog-and-pony image. "Let's send the pony back to the stable. ... Let's send the dog back to the kennel."

[mountainstates1]

Big Oil sits there and laughs at us while we pay $4 per gallon at the pump while they make obscene profits convincing the gullible conservatives that "Greed is good! We need more of your tax money for subsidies!" And, of course, the stupid conservatives go "yup, yup! while they bend over and squeal, "thank you sir, may I have another?"

[Hawkfighter]

Please tell me how can one single Representative or Senator in Congress ask a question of a company that is making a profit? When they are all to blame for the deep debt hole that congress has put this country in. As well as adding to that debt with Obamacare. Why can't we the people ask congress where are our tax dollars? Why are we in debt? Why did you give 3 billion to Brazil for oil drilling when we need to drill here? How can you sit in that glass house and throw rocks?
Maybe they should instead be asking how can we run the government like one of your business' so that we can get this country out of debt......Make it strong again, so that we can be more generous. How about stop blaming everyone else and look in the mirror. Both sides of the aisle are to blame.

[klviste]

We hear constantly from conservative pols and pundits about the wisdom of the marketplace. But does anybody in the oil business or any other big business believe that? Favorable tax and other financial incentives are said to keep the oil industry and other competetive. Bult isn't that what the marketplace is supposed to do?
Only a hypocrite can call for the free market and subsidies at the same time. The only place industries commpete is for Uncle Sam's dollars!

[klviste]

We hear constantly from conservative pols and pundits about the wisdom of the marketplace. But does anybody in the oil business or any other big business believe that? Favorable tax and other financial incentives are said to keep the oil industry and other competetive. Bult isn't that what the marketplace is supposed to do?
Only a hypocrite can call for the free market and subsidies at the same time. The only place industries commpete is for Uncle Sam's dollars!

[icepuck]

Funny, something I don't see in this article, yet was shown on the Evening news, was that last year the oil produces had a whopping net profit of $0.06 on the dollar. Computer makers had $0.16 and Pharmaceutical Industry had $0.17

Yet hey, it's a big industry so attack attack attack.

[user000049586849302948603]

That doesn't answer the question of why we the tax payers are giving oil companies money for nothing while they're making record profits.

[Smokey75]

by pahgre May 12, 2011 5:45 PM EDT Hey smoker, why is it an "attack," and not a fiscally-responsible tactic to cut spending.....cut spending.....cut spending.....cut spending.....like I've heard you far-right republicans spew on a daily basis?

Isn't returning $21 Billion of the taxpayers' money that's being freely given to the BIG OIL industry, while they are making RECORD PROFITS and don't need subsidies, making government SMARTER?

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If it is about fiscal responsibility why aren't the execs from GE and GM sitting right beside the Oil execs and being grilled why they need subsidies when they made billions in profits.

It's plain and simple an attack on the lefts favorite enemy "Big" oil. So again what will these attacks on "Big" oil do to lower the price of gas?

[Smokey75]

Oh wait never mind the GE CEO already has a seat in the white house right next to Obama. I guess that explains why liberals aren't calling for their subsidies to revoked.

The hypocrisy is just to fun!

[Smokey75]

Skyk1 you didn't answer the question with your rant about the GOP. Do liberals and democrats care about bringing down the price of gas? Or do they care more about pushing the liberal green agenda no matter how it fails and cripples this country.

By the way what have Dems done in those 30 years to make us energy independent besides refuse to allow us to use all resources which includes American oil, natural gas and coal. Which all three are plentiful in this country and could easily be used to get off foreign oil.

Please don't bring up the 3% US supply and 25% usage argument it is old and debunked. The US does only have 3% of the oil reserves of the world but that is still enough to supply the US for the next 100 years at current consumption rates. With efficiencies increasing every year it could be stretched to 150-200 years. So you need to come up with a different argument.

[Smokey75]

by pahgre May 12, 2011 4:41 PM EDT Did glenn beck or caribou barbi make up that lie of 95%?

==========

BTW, what's the price of GAS in Venezuela or Saudi Arabia with nationalized energy companies?

12 cents in Venezuela, 78 cents in Kuwait and 91 cents in Saudi Arabia

BTW, how much in royalties are the U.S. taxpayers getting from BIG OIL for pumping OIL from public lands?...........ZERO!

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

If that is true then why do Alaskans get a check every year from oil royalties? Now who is making up lies to prove his point? You liberals calling for us to nationalization of the oil industries realize in order to that we would have to drill for our own oil right?

[LtSmily]

skyk1
Please repeat after me... I will give facts and figures to explain my irrational hatred of "Supply side economics"... I will explain what I mean by VooDoo Economics... anything at all you put in the post would be more productive than the pseudo logical fallacies you repeat over and over again anytime stories of economics comes up. Please give specific policies supposed Conservatives have enacted that hurt Mr Main St. USA, because there haven't been any true Conservatives in office for a VERY long time. Even Reagan only had Conservative tendencies, but some of his actions definitely showed a populist center/left leaning. Contrary to popular media 30 second sound bites, I cannot count any 100% true Conservatives (Jeffersonian Liberals) in Federal Government.

[Unsilent_Majority]

This is really great. I tried to have a real conversation with Pahgre. I stated my opinion and in response he said the following...

"YOU are a typical fox/rush PARROT, spewing the same LIES and DECEPTIONS as the rest of the goose-stepping stepford wives, and it's easy to see!"

The truth us I watch MSNBC in the morning when I'm getting ready for work, Morning Joe in particular, and in the evening I watch Anderson Cooper. I never watch Fox. As for Rush, I think he's an idiot though I think he overblows his own position simply for the ratings and shock value. The only radio I hear during the day, if any, is WFAN which is 24-7 sports talk here in NY. So sorry, but I'm neither a Fox fan nor a Rush fan.

I'd like to know what "lies" I told or which "deceptions" I was "spewing".

My entire point here is that our national debt will never go away unless we strike the proper balance between taxation on one hand and military, medicare/medicaid, and social security on the other. FYI Pahgre...on this point, President Obama agrees with me.

[retm-w]

The right balance on medicare/medicaid and Social Security, so we follow ryans plan and turn it over to Wall St. and the Insurance companies so they can rip the seniors off.

[Unsilent_Majority]

no ryans plan is just about dead on arrival. but as a 38 year old, I may have to accept the fact that the SS benefits for me may be pushed off further down the road than I had hoped. And as for medicare medicaid, there is no reason we shouldn't audit the entire system to eliminate waste, and more importantly the fraudulent claim that exists within the system and cost taxpayers.