The Senate Dems have released this video, keeping up the drumbeat of ending taxpayer subsidies to Big Oil.Earlier this week, Senate Majority Leader Harry Reid challenged House Speaker John Boehner on the issue. Boehner has been trying to ratchet up the debt ceiling war with outrageous demands of trillions in spending cuts. Reid's response was simple: You want cuts? Start with welfare for Big Oil. That's a challenge Boehner has so far refused to meet.
Dems have some new, strong arguments behind them in making the case for eliminating the subsidies. A new Congressional Research Service report shoots down the Republican claim that eliminating the tax break would result in higher prices at the pump.
The document, sent to Senator Harry Reid, the Nevada Democrat and majority leader, said that with the cost of oil over $100 per barrel, “prices are well in excess of costs, and a small increase in taxes would be less likely to reduce oil output, and hence increase petroleum product (gasoline) prices.”
In a review of the five specific tax changes being advocated by Democrats, the research service also said that tightening the tax code would make a very small dent in the huge revenues of the industry and that the price of oil hinged on many other, larger considerations.
Political unrest, market gyrations, “macroeconomic growth trends, the value of the dollar and a host of other factors have contributed to fluctuations in the price of oil and gasoline,” the report said. “Any effect due to changes in the tax treatment of the oil industry would be hard to separate from the changes due to other factors.”
The subsides are a drop in the barrel for Big Oil, but they're a $21 billion chunk of the budget over the next ten years.