Senate Votes Down a Bill That Targets Oil and Gas Industry Subsidies

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As expected, Senate Democrats lost a key test vote Tuesday on a bill that would have repealed tax subsidies for the five biggest oil and gas companies, falling eight votes short of a win.

Democrats have struggled somewhat with their message on this bill, clearly struggling to do something about sky-high gas prices in this difficult economy, though the bill, they say, would reduce the deficit by $21 billion. At one point, Senate Majority Leader Harry Reid, D-Nev., said, "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."

But later, the leader made it clear to reporters that gas prices would not be affected by the bill. "We know that it's not going to have an affect on the gas prices," the Nevada Dem said, adding, "Republicans should be defending the American taxpayer. They should...stop defending the oil companies, join in with us, and cut the deficit by billions and billions of dollars, tens of billions of dollars. We believe this is the kind of wasteful spending that will lead to an agreement on reducing the debt."

A bill put forward by Senate GOP Leader Mitch McConnell, R-Ky, will receive a similar test vote on Wednesday afternoon, one that is also expected to fail. The bill would significantly shrink the time for approving drilling permits and would open more areas to exploration.

The Obama Administration recently announced an extension of drilling in some areas of the country, but McConnell said that's not enough.

"To understand whether the administration is really serious or not, you need to look at whether they are issuing permits," McConnell said. "There's a lot of talk about leases, and obviously leases are important. But you don't actually get to go forward until you get permit. So even if they speed up the leasing process, you need to be able to get a permit. And so what we will there be a time limit for the bureaucrats to review the permits, after which they must act."