Top executives from the Big 5 oil companies -- ExxonMobil, BP, Shell, Chevron, and ConocoPhillips -- flew into Washington, D.C. on their corporate jets to defend their industry at a U.S. Senate hearing yesterday. The Associated Press reports that "Motorists are paying nearly $4 for a gallon of gasoline as the oil industry reaps pretax profits that could hit $200 billion this year." The oil industry is not only benefiting from spiking gas prices, but also from over $4 billion in taxpayer subsidies they receive every year. With those subsidies and loopholes, Exxon's federal tax rate for the last three years was 17.6 percent, lower than what the average American pays. "Voters' anger over high gas prices is directed squarely at the oil companies and the politicians who defend them," according to a recent national survey by Greenberg Quinlan Rosner Research for the Center for American Progress Action Fund, the League of Conservation Voters and the Sierra Club. "Voters are furious with oil companies, according to our polling, and overwhelmingly support ending their subsidies." Senate Majority Leader Harry Reid (D-NV) "wants to bring a bill to the floor next week" Wednesday to repeal tax breaks for the major oil companies, "to help ease the deficit by about $21 billion over 10 years."
PROFITING FROM PAIN: "Given profits of $35 billion in just the first quarter alone, it is hard to find evidence that repealing these subsidies would cut domestic production or cause layoffs," Sen. Max Baucus (D-MT), chair of the Senate Finance Committee, said yesterday. "After all, based on first-quarter profits, these tax breaks represent less than 2 percent of what these companies are on pace to make this year. Even without these tax breaks, these companies would clearly be highly profitable." In his opening statement, Baucus argued that the most vulnerable in society shouldn't have to suffer for the benefit of oil companies. "We should use this money to reduce our deficit instead of putting the burden on seniors and our children's future. The oil executives were unmoved. "Do you think that your subsidy is more important than the financial aid that we give to students to go to college?" Sen. Chuck Schumer (D-NY) asked. ConocoPhillips CEO Jim Mulva said the question was "very difficult" to answer. "Not once during this hearing have I heard any semblance of a willingness to share unless every company also has to," Rockefeller concluded. "I haven't heard anybody talk about what they are doing -- what they would be willing to do -- to share in our budget problem. The total concept of what keeps America together...is a sense of fairness, that everybody has to lose at some point, everybody has to give something up to be a real country."
'UN-AMERICAN': On Wednesday, ConocoPhillips CEO Jim Mulva outraged many on Capitol Hill when he released a statement calling it "un-American" to end subsidies to the Big 5 oil companies. At yesterday’s Senate Finance Committee hearing with the oil CEOs, Sen. Chuck Schumer (D-NY) repeatedly pressed Mulva for an apology, but the ConocoPhillips CEO refused to give one, claiming "nothing was intended personally" by his press release. Sen. Robert Menendez (D-NJ) summed up, "So the bottom line is you're unwilling to apologize for a company's statement. Okay, so I'll continue to take offense to it." Sen. Pat Roberts (R-KS) rushed to Mulva's defense and echoed his claim that it was "un-American" to end tax breaks for big oil companies. The executives actually used the hearing to argue for increased drilling subsidies. "A much better solution lies in permitting our industry to increase energy supplies,” said Exxon CEO Rex Tillerson. "We have shackles on us," cried Mulva. "Put us back to work." The idea that oil companies need taxpayer subsidies to drill for oil is nonsense. "The price of oil is so high that removing these tax breaks would probably have little to no effect on domestic oil production," the Associated Press reports, corroborated by an analysis from the Congressional Research Service. By the end of the hearing, Baucus was reduced to pleading with the executives. "How about a trade here? More leases, give up the tax breaks." "I don't think I came to negotiate a trade with you today, Senator," Tillerson responded mockingly.
'YOU ARE LIKE SAUDI ARABIA': "I get the feeling that it's almost like you're -- like the five of you are like Saudi Arabia," Sen. Jay Rockefeller (D-WV) told the Big Oil executives. "That you're caught up in your profits, you're highly defensive, you yield on nothing," he said. "I think you're out of touch. Deeply, profoundly out of touch. And deeply and profoundly committed to sharing nothing." Throughout the hearing, the millionaire executives proved Rockefeller's point. "Don't punish our industry for doing its job well," said Chevron CEO John S. Watson. Watson did not elaborate on the consequences to the United States of the "job well done" by the oil industry. "I don't think American people want shared sacrifice," he rebuked Rockefeller. "I think they want shared prosperity." Watson's compensation in 2010 was nearly $9 million, about 300 times the median American income. The executives felt comfortable that their friends in Congress would protect their extravagant lifestyles. Watson, Tillerson and Mulva "have made a combined total of $258,870 in political donations since 1990. Of that amount, $237,670, or 92 percent, was contributed to Republicans." Finance committee members have received $5.1 million in oil industry contributions since 1999, going by a four-to-one ratio to Republicans. "You have a great sense of assurance. I don't think you feel threatened by anything that's going on here," Rockefeller said. "You always prevail in the halls of Congress."
PROFITING FROM PAIN: "Given profits of $35 billion in just the first quarter alone, it is hard to find evidence that repealing these subsidies would cut domestic production or cause layoffs," Sen. Max Baucus (D-MT), chair of the Senate Finance Committee, said yesterday. "After all, based on first-quarter profits, these tax breaks represent less than 2 percent of what these companies are on pace to make this year. Even without these tax breaks, these companies would clearly be highly profitable." In his opening statement, Baucus argued that the most vulnerable in society shouldn't have to suffer for the benefit of oil companies. "We should use this money to reduce our deficit instead of putting the burden on seniors and our children's future. The oil executives were unmoved. "Do you think that your subsidy is more important than the financial aid that we give to students to go to college?" Sen. Chuck Schumer (D-NY) asked. ConocoPhillips CEO Jim Mulva said the question was "very difficult" to answer. "Not once during this hearing have I heard any semblance of a willingness to share unless every company also has to," Rockefeller concluded. "I haven't heard anybody talk about what they are doing -- what they would be willing to do -- to share in our budget problem. The total concept of what keeps America together...is a sense of fairness, that everybody has to lose at some point, everybody has to give something up to be a real country."
'UN-AMERICAN': On Wednesday, ConocoPhillips CEO Jim Mulva outraged many on Capitol Hill when he released a statement calling it "un-American" to end subsidies to the Big 5 oil companies. At yesterday’s Senate Finance Committee hearing with the oil CEOs, Sen. Chuck Schumer (D-NY) repeatedly pressed Mulva for an apology, but the ConocoPhillips CEO refused to give one, claiming "nothing was intended personally" by his press release. Sen. Robert Menendez (D-NJ) summed up, "So the bottom line is you're unwilling to apologize for a company's statement. Okay, so I'll continue to take offense to it." Sen. Pat Roberts (R-KS) rushed to Mulva's defense and echoed his claim that it was "un-American" to end tax breaks for big oil companies. The executives actually used the hearing to argue for increased drilling subsidies. "A much better solution lies in permitting our industry to increase energy supplies,” said Exxon CEO Rex Tillerson. "We have shackles on us," cried Mulva. "Put us back to work." The idea that oil companies need taxpayer subsidies to drill for oil is nonsense. "The price of oil is so high that removing these tax breaks would probably have little to no effect on domestic oil production," the Associated Press reports, corroborated by an analysis from the Congressional Research Service. By the end of the hearing, Baucus was reduced to pleading with the executives. "How about a trade here? More leases, give up the tax breaks." "I don't think I came to negotiate a trade with you today, Senator," Tillerson responded mockingly.
'YOU ARE LIKE SAUDI ARABIA': "I get the feeling that it's almost like you're -- like the five of you are like Saudi Arabia," Sen. Jay Rockefeller (D-WV) told the Big Oil executives. "That you're caught up in your profits, you're highly defensive, you yield on nothing," he said. "I think you're out of touch. Deeply, profoundly out of touch. And deeply and profoundly committed to sharing nothing." Throughout the hearing, the millionaire executives proved Rockefeller's point. "Don't punish our industry for doing its job well," said Chevron CEO John S. Watson. Watson did not elaborate on the consequences to the United States of the "job well done" by the oil industry. "I don't think American people want shared sacrifice," he rebuked Rockefeller. "I think they want shared prosperity." Watson's compensation in 2010 was nearly $9 million, about 300 times the median American income. The executives felt comfortable that their friends in Congress would protect their extravagant lifestyles. Watson, Tillerson and Mulva "have made a combined total of $258,870 in political donations since 1990. Of that amount, $237,670, or 92 percent, was contributed to Republicans." Finance committee members have received $5.1 million in oil industry contributions since 1999, going by a four-to-one ratio to Republicans. "You have a great sense of assurance. I don't think you feel threatened by anything that's going on here," Rockefeller said. "You always prevail in the halls of Congress."
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