US Senate Defeats Sen Sanders' Attempt To End Oil Co Tax Breaks

15th Jun 2010 23:37

By Martin Vaughan and Corey Boles Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--U.S. Sen. Bernie Sanders (I., Vt.) was defeated Tuesday in an attempt to add language to the Senate's jobless-benefits bill to repeal $35 billion worth of tax breaks for oil and natural gas producers. The lawmaker was resoundingly defeated in his attempt to add the language to the bill by a vote of 61-35, with senior members of both parties voting against him. Sanders was seeking to enshrine in law a request made by President Barack Obama in his budget this year. Even against the backdrop of anger against the oil industry, and BP PLC (BP), because of the massive oil spill in the Gulf of Mexico, removing the generous tax breaks for companies proved to be unpopular. The Senate also voted to defeat a measure brought forward by Sen. David Vitter (R., La.) that would have mandated that any new monies raised by an increase on a per-barrel levy charged to the oil industry could only be used to pay for clean-up costs stemming from future oil spills. Democrats have proposed hiking the fee from seven cents a barrel to 41 cents and use the proceeds to pay for many of the tax provisions in the bill. Sanders had proposed using $25 billion of the savings to pay down the federal budget deficit and the remaining $10 billion to fund a program to promote investment in energy efficient buildings. "With a record-breaking $13 trillion national debt and an unsustainable federal deficit, the last thing we should be doing is giving tax breaks to oil and gas companies that have been making enormous profits," Sanders said Tuesday in a letter to senators. The Senate is considering a $140 billion bill to extend federal unemployment aid and renew a host of expired tax breaks. About $85 billion of that cost would add to the deficit under the current bill; the adoption of Sanders' amendment could have reduced that net cost to $60 billion. Senate leaders are shy of the 60 votes needed to push the broader package through the chamber; they may have to reduce the cost of the package to win over swing voters such as Sens. Evan Bayh (D., Ind.) and Olympia Snowe (R., Maine). A key procedural vote on the package is slated for Wednesday. The Sanders amendment included three proposals put forth earlier this year by the president. It would have repealed both expensing of intangible drilling costs and percentage depletion for oil and gas wells, as well as excluded oil and gas producers from a tax break for domestic manufacturing. -By Martin Vaughan and Corey Boles, Dow Jones Newswires; 202-862-9244; [email protected] (END) Dow Jones Newswires June 15, 2010 18:37 ET (22:37 GMT)