Executives of the nation's top five oil companies faced off Thursday against Senate Democrats who want to take away billions of dollars in annual tax breaks the industry has enjoyed for nearly a century.
With gas prices hovering near $4 per gallon and the nation's budget deficit topping $1.3 trillion, Democrats sought to seize on the anger and anxiety many Americans are feeling about the economy and prices at the pump.
Democrats went on the attack at the hearing, accusing the five executives of being out of touch with ordinary Americans and too greedy to sacrifice a relatively small chunk of their record profits to help the nation resolve its budgetary problems.
"The five largest oil companies ... collectively earned over $35 billion in profits in the first quarter of 2011 alone," said Senate Finance Committee Chairman Max Baucus, D-Mont., who presided over the hearing. "Businesses should make a profit. That's what drives our economy. But do these profitable companies need taxpayer subsidies?"
Senate Democrats next week will try to push through legislation that would end oil industry tax breaks, a move they said would save the treasury $21 billion over the next decade.
The oil industry assailed the legislation, arguing they already pay their fair share of taxes and accusing Congress of discriminating against them by proposing a narrowly targeted tax increase that excludes other companies. They warned of dire consequences if Democrats followed through with their plan.
"Raising taxes will lead to less investment, less production and most likely higher cost per gallon and less employment," ConocoPhillips Chief Executive Officer James Mulva told senators.
Democrats intertwined their attack on Big Oil with their criticism of a Republican plan to slash the federal budget and reduce Medicare costs, arguing that the GOP wants to maintain billions in tax breaks for the oil industry while cutting Pell Grants for college students, health care for seniors and other federal programs.
One of the harshest critics on the Democratic side of the dais was Jay Rockefeller, a great-grandson of oil magnate John D. Rockefeller.
Rockefeller, who represents West Virginia, asked the executives what they would be willing to sacrifice to help solve the nation's budget problem.
"I yearn for one of you to see what average people are going through and figure out some way in your mind, what can I do as a very large and profitable company to make sure that bad things don't happen to that person," Rockefeller said, before pointing out that none of the five executives flew commercial flights to the hearing.
Sen. Charles Schumer, D-N.Y., attacked Mulva over a ConocoPhillips press release that called the proposal to eliminate the tax breaks "un-American" and asking him to apologize for it.
"Do you think people who advocate cutting student aid, are they un-American, too?" Schumer demanded, referring to the GOP plan to slash domestic spending.
Senate Republicans came to the aid of the oil companies, pointing out that eliminating the tax breaks will do nothing to lower prices at the pump.
Sen. Orrin Hatch, R-Utah, the panel's top Republican, called the hearing a "dog and pony show," producing a blown-up photo of a dog riding a pony.
"I expect some good political theater here today," he said.
