Senate Dems Lose Vote on Repeal of Tax Breaks for Oil Companies Amid Pain at Pump

Democratic Senators, from left, Ben Cardin from Maryland, Richard Blumenthal from Connecticut, Debbie Stabenow from Michigan, Charles Schumer from New York, and Robert Menendez from New Jersey take part in a news conference at an Exxon gas station on Capitol Hill in Washington, Wednesday, May 11, 2011, to talk about oil industry subsidies to help reduce the deficit.

As expected, Senate Democrats lost a key test vote Tuesday on a bill that would have repealed $20 billion worth of tax subsidies for the nation's five largest oil companies, falling 8 votes short of a win.

The 52-48 vote came as a majority of Americans say in a new Gallup poll that high gas prices are hurting their finances.

Nearly seven in 10 Americans said high gas prices are causing financial hardship for their families. More than half said to compensate, they have made major changes, ranging from shorter trips to cutting back on vacation travel. More than a 1,000 people responded to the poll that has a 4 percent margin of error.

The national average price for a gallon of regular gas is $3.94, according to AAA, and Democrats were looking to exploit that high price with Tuesday's vote.

Last week, Democrats grilled oil executives on the tax breaks that they say are not needed and  President Obama announced Saturday he was directing his administration to ramp up U.S. oil production by extending leases in the Gulf of Mexico and off Alaska's coast.

Democrats have been touting a new report by the Joint Economic Committee found that eliminating the tax breaks would reduce the deficit by $21 billion over 10 years and encourage alternative energy and energy efficiency.

"This new JEC report makes clear that there are ways to bring down the deficit without harming our economic recovery," said Sen. Bob Casey, D-Pa., chairman of the committee. "By repealing unnecessary tax breaks to the major integrated oil companies, we can reduce the deficit by more than $20 billion and speed the move to a clean energy economy without impacting prices at the pump."

But Republicans opposed the bill, saying it won't relieve pain at the pump, a conclusion also reached by Senate Majority Leader Harry Reid, who said on the Senate floor Tuesday that "it won't affect gas prices at all."

Reid then went on to say the opposite.

"We have to do something about the exorbitant gas prices, and the best way to start with that is to do something about the five big oil companies getting subsidies they don't need," he said.

"Is it just me ... or is their message on their bill incredibly contradictory?" asked a Republican aide to Senate Republican leader Mitch McConnell

"Symbolic votes like this that aim to do nothing but pit people against each other will only frustrate the public even more," McConnell added in a statement on the Senate floor.

"Americans aren't interested in scapegoats," he said. "They just want to pay less to fill up their cars."

Senate Republicans are pushing three bills passed by the GOP-led House they say are designed to improve domestic energy production by ending the administration's moratorium on domestic offshore drilling.

Republicans have also released their own report from the Joint Economic Committee Republican staff that claims the Federal Reserve's unprecedented flooding of dollars into the U.S. economy has added 56.5 cents to every gallon of gas.

The report notes that the value of the dollar has dropped 14 percent since the Federal Reserve began its program of quantitative easing in November 2008.

"Americans are paying a steep price at the pump as a result of the weak dollar policies pursued by this administration and the Federal Reserve," said Rep. Kevin Brady, vice chairman and the top Republican on the Joint Economic Committee.

"Rather than pointing fingers at energy manufacturers, the president should be looking to his own Treasury and the Fed for answers to the high price of fuel," he said, adding that the price of a barrel would be $17.04 less if the dollar hadn't declined in value.