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Begich breaks with Democrats, Obama on oil tax breaks

Sean Cockerham

WASHINGTON -- President Barack Obama says Congress should end billions of dollars in tax breaks for the global oil companies, but Alaska Sen. Mark Begich has broken with nearly every other Senate Democrat to oppose the idea.

Begich was one of just three Democrats who voted unsuccessfully to stop the bill from moving forward to be debated on the Senate floor Tuesday. Ben Nelson of Nebraska and Mary Landrieu of Louisiana were the only other Democrats to break with their party on the bill by Sen. Robert Menendez, D-NJ.

California Democratic Sen. Barbara Boxer dismissed the opposition of Begich, Landrieu and Nelson as coming from senators of "Big Oil states."

Begich said in an interview, as the measure was debated on the Senate floor, that the bill is nothing but a political stunt by his fellow Democrats to dump on the oil companies at a time of high gasoline prices.

"If we're going to do tax reform then everybody has to be at the table, not just selected groups because it polls well and you can beat up on them," Begich said.

Begich said the Senate Democratic majority should "get on to real energy legislation and not these political games of going back and forth over legislation that everyone knows is not going to pass." There were reports the Senate would vote on the bill Thursday. But Begich said the bill is dead and is just going to just run out of time and expire after Senate Majority Leader Harry Reid moved late Tuesday to block consideration of any possible amendments.

The Republicans favored having the bill up for debate because they thought it was a good chance for them to argue energy issues. But nearly all the Republicans, including Alaska Sen. Lisa Murkowski, oppose repealing the tax breaks.

Senate Democratic leaders have argued this week that the oil companies are raking in enormous profits from the high price of oil and there is no reason for taxpayers to give them even more, "It's time to end this wasteful corporate welfare," Reid, a Nevada Democrat, said in a speech on Senate floor.

"This bill is pretty simple," said bill sponsor Menendez. "We end wasteful subsidies to the big five oil companies and we use those savings to invest in clean energy, in creating jobs and reducing the deficit."

Democrats said the bill would repeal incentives worth about $2 billion a year for the five largest oil companies, Exxon Mobil, BP, ConocoPhillips, Chevron and Royal Dutch Shell. The White House issued a statement Monday in support of the bill, saying the "nation simply cannot afford these wasteful subsidies."

The Obama administration has repeatedly pushed for an end to the oil company tax breaks. As recently as last May, though, an effort to do so failed in the Senate on a vote of 52 to 48, with Begich joining the mostly Republican opposition.

Even if the Senate were to pass the bill, there is little chance the Republican-controlled House would agree. Begich said the debate this week has been just a "show and tell."

Begich also said he questioned the Congressional Budget Office's estimate that only the largest five oil companies would be affected by the repeal, saying smaller independent companies are telling him they also would be harmed. He said he believes the tax benefits have helped increase oil drilling.

"I just don't buy the argument that we get rid of it and everything is going to be fine and dandy. ... if they want to talk about a real energy plan then let's do one, let's talk about how we develop a plan, have a diversified energy base and make sure that we can deliver it to the American people," Begich said.

Republicans say the tax incentives aren't limited to oil companies, and other industries receive them as well. Murkowski, the ranking Republican on the energy committee, led the GOP arguments on the Senate floor Tuesday against the repeal of oil tax breaks.

Murkowski said the measure would effectively raise taxes on the oil companies.

"What the president and Democratic leadership are proposing cannot, by definition, reduce gas prices. If anything, it would push them higher. ... Taxing something does not make it cheaper or more abundant," Murkowski said.

Reach Sean Cockerham at scockerham@mcclatchydc.com or follow him on twitter @seancockerham


By SEAN COCKERHAM
Anchorage Daily News