On the day before the heads of the country's five largest oil companies are due for a Senate Finance Committee grilling on tax subsidies, Sen. Benjamin L. Cardin is asking them to admit that they no longer need the breaks.
The Maryland Democrat is a co-sponsor of the Close Big Oil Tax Loopholes Act, which supporters say will save the federal government $4 billion annually. The so-called Big Five – Exxon Mobil, Conoco Phillips, Chevron, Shell and BP America – have reported a total $36 billion in profits for the first quarter of 2011.
"At a time of soaring gas prices and record deficits, the five most profitable oil companies do not need, or deserve, a handout from the American taxpayer," Cardin said in a statement.
He has joined fellow Finance Committee Democrats Robert Menendez of New Jersey, Bill Nelson of Florida, Chuck Schumer of New York and Debbie Stabenow of Michigan in a letter to the oil executives.
"We are sure you will agree that our nation's mounting debt is a serious threat to our recovering economy," they wrote. "But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness. … The former President of Shell Oil, John Hofmeister, had the courage to say, in no uncertain terms, that your companies no longer need these giveaways. We urge you, in your testimony tomorrow before the Senate Finance Committee, to acknowledge the same."
Complete text of the letter follows, after the jump.Rex W. Tillerson John S. Watson
Exxon Mobil Corporation Chevron Corporation
5959 Las Colinas Boulevard 6001 Bollinger Canyon Road
Irving, Texas 75039-2298 San Ramon, CA 94583
James J. Mulva Marvin Odum
600 North Dairy Ashford One Shell Plaza
P.O. Box 2197 910 Louisiana Street
Houston, TX 77252-2197 Houston, TX. 77002
H. Lamar McKay
501 Westlake Park Blvd
Houston, TX. 77079
As members of the Senate Committee on Finance, we eagerly await your testimony at our panel's hearing tomorrow. We urge you to take this opportunity to publicly admit that, given your companies' prodigious profits, you no longer need taxpayer subsidies. We hope you will do the right thing for our country's fiscal health and endorse their discontinuation.
We are sure you will agree that our nation's mounting debt is a serious threat to our recovering economy. But if we are truly serious about cutting our deficit, it is imperative that we start by getting rid of wasteful and ineffective corporate subsidies that have outlived their usefulness. That is why we introduced legislation yesterday—the Close Big Oil Tax Loopholes Act (S. 940)—that would end $21 billion in projected taxpayer subsidies for the five largest integrated oil companies. The former President of Shell Oil, John Hofmeister, had the courage to say, in no uncertain terms, that your companies no longer need these giveaways. We urge you, in your testimony tomorrow before the Senate Finance Committee, to acknowledge the same.
We agree with the vast majority of Americans that taxpayer subsidization of your companies is no longer necessary. When many of these tax breaks were passed into law, oil was less than $20 a barrel. Today, the price of oil is hovering around $100 a barrel. Because of the exponential increase in the price of oil, the companies you successfully manage have reported a combined total of $36 billion in corporate profits in the first quarter of 2011 alone. That amounts to a staggering $2.8 billion per week of profit.
Every single one of us has heard from constituents back home who are struggling with the rising price of gasoline. While families across the country are being squeezed, your industry is doing better than ever. And yet the U.S. government continues to dole out $4 billion a year in tax breaks to your companies. These subsidies are not sustainable, and we intend to end them.
We are hopeful that you will agree that S. 940 makes economic sense in our shared goal of putting our country back on the right fiscal track.
Senator Bob Menendez
Senator Chuck Schumer
Senator Debbie Stabenow
Senator Bill Nelson
Senator Ben Cardin