Reid vows to strip oil companies of tax credits even if bill fails

Chris Moody Contributor
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Democrats will strip the five largest oil companies of billions in tax credits and write-offs even if the chamber rejects the measure by demanding it be included in budget negotiations later this year, Senate Majority Leader Harry Reid said Tuesday.

The Senate is expected to vote on a bill Tuesday night that would deny five oil companies, ExxonMobil, Shell, ConocoPhillips, Chevron Texaco, and BP, billions in tax credits. The measure will require 60 votes and does not have full support from the Democratic caucus. If it does pass the higher chamber, the Republican-led House is expected to kill it.

But that hasn’t deterred Democratic leadership.

“I am confident that before we finish our budget negotiations here and in anticipation for raising the debt ceiling that will be a part of it,” Reid told reporters Tuesday. “There is no justification for giving these companies that are making so much much money, and their own executives said these subsidies are unnecessary, there is no justification for continuing that and I am confident that in our final budget negotiations that will be in there.”

If passed, the new tax policy is expected to increase the tax burden on oil companies by about $21 billion over the next decade.

Both parties are gearing up for negotiations for the coming debate over raising the nation’s debt ceiling. Republicans are demanding strict long-term austerity in return for a vote to raise the $14.3 trillion limit. A final deal is expected sometime in August.

Update: Brian Beutler at Talking Points Memo points out that Democrats failed to ensure the bill originated in the House, leaving the Senate measure technically unconstitutional. Bills that impact taxes and spending must begin in the House, or the Senate must use a vehicle that started in the lower chamber and re-write it.

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Chris Moody