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House Democrats target 'big oil'

May 05, 2011
In a bid to eliminate tax provisions for the oil and natural gas industry, House Democrats plan to force a vote on eliminating the Section 199 domestic manufacturing tax credit for the five largest oil companies.

The vote could come today, when Republicans present a bill to expand domestic oil and natural gas drilling. Off the table, at least for now, are tax provisions that support independent producers, including the expensing of intangible drilling costs and percentage depletion.

From The Hill:

"This is legislation that is long overdue and it is impossible to justify the continuation of these tax credits," Rep. Tim Bishop (D-N.Y.) said Wednesday.

"Republicans want to give tax breaks for the oil companies and then just say its a tough break for consumers at the pump," said Rep. Edward Markey (Mass.), the top Democrat on the House Natural Resources Committee. "Were going to give them an opportunity to repeal these tax breaks for the oil companies as they are reporting record profits.

Bishop will offer the motion during debate Thursday on legislation authored by House Natural Resources Committee Chairman Doc Hastings (R-Wash.) that would set a timeline for Gulf of Mexico lease sales and mandate the sale of leases off the Virginia coast. The legislation is part of a three-bill domestic oil-and-gas drilling package that has been fast-tracked by House Republican leadership.

The motion is based on legislation Bishop unveiled earlier this week called the Big Oil Welfare Repeal Act. The bill will generate $12.8 billion in revenue during the next decade, Bishop said.

Democrats will offer a series of amendments to the legislation to repeal oil industry tax breaks. But they feared that the House Rules Committee which is meeting later this afternoon to determine the rules of engagement on the bill would toss out the amendments because they are not germane to the bill.

Bishop's procedural move allows Democrats to guarantee a vote on the oil subsidies measure.

Democrats are hoping to exploit what they see as a small crack in the Republican ranks on the issue of oil industry tax credits. House Speaker John Boenher (R-Ohio) indicated last week that he could support the repeal of some of the subsidies, though he later walked back his statements. And House Budget Committee Chairman Paul Ryan (R-Wis.) has said he supports eliminating the breaks.

But the measure will almost certainly not pass the House and it faces major hurdles in the Senate, where seven Democrats voted against a similar provision in February.
 
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