In the past, we've seen a lot of denial, a good deal of it laughably false, by politicians regarding the billions in dollars per year doled out in taxpayer-funded corporate welfare to highly profitable oil companies. Of course, given that many of these politicians are heavily funded by Big Oil, that shouldn't come as a great surprise. Despite Big Oil's big clout in Congress, a new report by Politico indicates that this situation might, just might, be changing.
One of Washington's most powerful business lobbies is afraid lawmakers might just do the unthinkable: Take an ax to its billions in tax breaks.
And this time, Republicans could help swing the blade.
At stake is more than $40 billion in tax incentives that the oil and gas industry is due to receive in the next decade — money that leaders from both parties could try to carve away as they look for ways to trim the federal budget deficit. The looming fiscal cliff has also opened the door by heightening interest in Congress on overhauling the nation’s tax policies.
Eliminating Big Oil’s tax breaks has long been a favorite cry of some Democrats, including President Barack Obama. But Mitt Romney has gotten into the act too, telling the audience at the Oct. 3 debate in Denver that he’d be willing to sacrifice at least some oil industry deductions in the context of a broader lowering of the corporate tax rate to 25 percent from 35 percent.
Of course, as the Politico article points out, the oil industry is fighting back hard, arguing that "it would be unfair to single out oil and gas companies," and that cutting back on their corporate welfare would cause them to slash their investment in exploration, drilling, etc. Of course, this is absurd, given that the oil industry remains immensely profitable ("Exxon, the world’s largest publicly traded oil company, is expected to report a quarterly profit of $8.8 billion on Nov. 1.") with or without these subsidies. But that doesn't mean they're going to take their hands out of the cookie jar willingly. After all, those cookies have been very tasty for the oil industry for many years.