Democrats are thwarted on repeal of oil tax breaks

WASHINGTON - Senate Democrats tried Tuesday to channel public anger at $4-a-gallon gasoline into passing a bill to repeal federal tax breaks and subsidies for five major oil companies, but they fell short.

After bashing Big Oil in a hearing last week, Senate Democrats mustered fewer than the 60 votes they needed under Senate rules to move the bill to a final vote. The final count was 52-48. Three Democrats - Sens. Mary Landrieu of Louisiana, Mark Begich of Alaska, and Ben Nelson of Nebraska - voted against the measure. Two Republicans - Maine Sens. Olympia J. Snowe and Susan Collins - voted for the bill.

Tuesday's action effectively kills the bill, which framed symbolically the different strategies that congressional Democrats and Republicans prefer for reducing budget deficits, confronting energy-policy choices and appealing for voters' favor.

Striking a populist pose, Democrats argued that Big Oil had huge profits and did not need tax breaks, even though ending them wouldn't cut deficits much. The Big Five oil companies' profits totaled about $35 billion in this year's first quarter. Ending their tax breaks would cost them about $21 billion over 10 years. The federal budget deficit is projected to be about $1.4 trillion this year, and about $7 trillion over 10 years.

"Everyone in this chamber: Are you on the side of working-class families or are you on the side of Big Oil?" said Sen. Robert Menendez (D., N.J.), a lead sponsor.

Republicans said the breaks spurred domestic oil production.

"Instead of actually doing something about high gas prices, our Democratic friends staged what one of my Republican colleagues accurately described as a dog and pony show," said Minority Leader Mitch McConnell (R., Ky.).

The Democratic bill would have stripped tax breaks from five major oil companies - ExxonMobil, ConocoPhillips, BP America, Shell Oil Co., and Chevron Corp.

A report last week by Congress' Joint Economic Committee said that eliminating or modifying some oil company tax breaks would generate $21 billion to the Treasury over a 10-year period.

Another study, by the nonpartisan Congressional Research Service, said that repealing the tax breaks would be unlikely to lead to high gas prices and that ending them would raise about $1.2 billion in 2012.