CHICAGO, IL–(ENEWSPF)–May 10, 2011. Unless legislation to end their “joyride” is passed, the five largest oil companies, which recorded more than $30 billion in profits during the first three months of this year alone, will continue to receive $4 billion per year in tax breaks from the federal government, U.S. Senator Dick Durbin (D-IL) said yesterday outside a gas station in Chicago. A bill eliminating the subsidies for big oil companies and diverting the savings to offset the deficit will be introduced this week in the U.S. Senate.
“Working families just starting to recover from the recession are being hit with a one-two punch. They’re watching helplessly as the money they need so badly in their own pockets is being sent to the wealthy big oil companies,” Durbin said.
In Chicago, prices are among the highest in the nation, well over $4.50 per gallon in many spots. “While it’s been a tough spring for consumers, it’s been a great season for the oil industry. When oil sells for more than $113 a barrel, as it has been recently, there’s really only one group in the United States that wins: Big Oil. It’s one industry that isn’t struggling to make a profit in this challenging economy. The five largest oil companies in the country made $33.9 billion in profit between January and March of this year,” Durbin said.
“Every year, the large oil companies take advantage of tax breaks and sweetheart deals on drilling rights that cost the federal government billions of dollars,” Durbin said. “I think it’s time we end that special treatment. This week in the Senate, we’ll begin debating legislation that would roll back those tax breaks for the big companies, protect the small players in the industry and end the special treatment given to several companies with leases in the Gulf of Mexico—these companies have been allowed to drill and pump oil for decades without paying the federal government for the oil they extracted. It is a reasonable bill that will save us $21 billion over ten years. And we intend to use the $21 billion we save to reduce our nation’s deficit,” Durbin said.
“This bill is not intended to punish the oil companies for turning a profit. But it certainly is not going to reward them with more taxpayers’ dollars. It simply asks large wealthy international companies—in an industry that has existed for over 100 years—to pay their fair share and no longer depend on the government for a handout,” Durbin said.
Durbin noted that many of the tax breaks were created almost 100 years ago to encourage companies to explore for oil. “At $100 a barrel, how much more encouragement do these oil companies need and why do working families remain on the hook?” Durbin asked.
The average American family pays for higher gas prices three different ways, Durbin noted. First, they pay at the pump. Second, they pay as the U.S. government sends their tax dollars back to the big oil companies to subsidize their operations. And third, they pay interest to China, since the U.S. borrows 40 cents for every $1 we spend—primarily from China—and we pay it back with interest. So the average family’s children and grandchildren are going to be paying interest on the money the U.S. government borrowed to provide a subsidy of $4 billion per year to the oil companies that are making record breaking profits.
“The large oil companies are well-established and extremely profitable—they don’t need to be subsidized by the federal government. We don’t have the money to subsidize them—we have to borrow it and pay interest on that loan,” Durbin said. “Now is the time to end the sweetheart deals these companies have enjoyed for nearly a century.”