WASHINGTON (Reuters) - Republicans in the Senate blocked legislation on Thursday to strip billions of dollars in tax breaks for the biggest U.S. oil companies, calling the bill a political stunt that would not help tamp down surging gasoline prices.
President Barack Obama, under pressure as the pinch of higher gasoline prices becomes a hot issue in the U.S. presidential campaign, had urged Congress to end the breaks, worth about $24 billion over 10 years, noting oil companies were raking in record profits.
“They can stand with big oil companies, or they can stand with the American people,” Obama said at an event in the White House Rose Garden just ahead of the Senate vote.
“It’s not like these are companies that can’t stand on their own,” Obama said.
The Senate bill needed 60 votes to clear a procedural hurdle, but as widely predicted, it failed on a vote of 51-47, mainly along party lines.
As Obama campaigns for re-election, Republicans are attacking the White House over the rising cost of gasoline, a particularly sensitive issue for car-loving Americans. Prices have jumped about $0.30 in the past month to an average of $3.92 per gallon, a record high for March.
A Reuters/Ipsos poll on Tuesday showed that more than two-thirds of Americans disapprove of how Obama is handling high gasoline prices, although they do not blame him. The reason most commonly cited for the high prices, according to the poll, was ”oil companies that make too much profit.
Democrats had sought to use the vote to deflect criticism of their energy policies and tap into populist anger against oil companies.
“American families are struggling, big oil companies are not,” Senate Majority Leader Harry Reid said ahead of the vote.
Previous spikes in fuel prices have not affected U.S. presidential election results. But economists warn that higher gasoline prices could slow the overall economy, which would hurt Obama’s chances of winning a second term on November 6.
GRAPHIC-Big Oil's tax rates link.reuters.com/hyk37s
The bill, sponsored by Robert Menendez, a Democrat, would have cut billions of dollars in tax breaks for the “big five” oil companies: Exxon Mobil Corp, BP Plc, ConocoPhillips, Chevron Corp and Royal Dutch Shell Plc.
“They took your money and they didn’t produce a drop more of oil,” Menendez said on the Senate floor, noting the companies produced less oil in 2011 than they did in 2010.
Republicans have said cutting the tax breaks would do nothing to lower gasoline prices, and would only raise oil companies’ costs at a time when more domestic oil and gas production is needed.
“Is this really the best we can do?” said Senate Republican leader Mitch McConnell.
Republicans have urged the Obama administration to allow more production offshore and on government-owned land, and to quickly approve the Keystone XL pipeline to bring in more oil from Canada.
But Obama said the United States should “double down” on clean energy instead of rewarding oil companies.
“Last year, the three biggest U.S. oil companies took home more than $80 billion in profit. Exxon pocketed nearly $4.7 million every hour,” he said, citing an analysis showing that the big companies pocket another $200 million in quarterly profits every time the price of gasoline goes up by 1 cent.
“Keep in mind, we can’t just drill our way out of this problem,” Obama said before a crowd of about 100 people, including representatives of environmental groups and Americans affected by the rising cost of gasoline.
Additional reporting by Caren Bohan and Samson Reiny; Editing by Vicki Allen and Philip Barbara