Senate Democrats failed to muster enough votes to advance a bill that would have eliminated tax credits for the five largest oil and gas companies.

Three Democrats joined with all but two Republicans to block the bill from coming up for debate. In a 52-48 vote on Tuesday, the measure failed to reach the 60-vote filibuster-proof threshold needed to reach the floor.

The bill would have eliminated five different tax breaks enjoyed by the five largest oil companies and would have generated an estimated $2 billion a year, or about $21 billion over 10 years. The bill would have repealed the Section 199 domestic manufacturing tax deduction, the ability to deduct taxes paid to foreign countries, and the deductibility of foreign royalty leases and intangible drilling and development expenses. It would also have limited the percentage depletion allowance for oil and gas wells. The savings would have been applied toward deficit reduction (see Senators Propose to Close Oil Tax Loopholes).

However, Democrats plan to continue to press for the measure as part of a larger deficit reduction plan. One of the sponsors of the bill, known as the Close Big Oil Tax Loopholes Act, Sen. Robert Menendez, D-N.J., noted that a majority of the Senate had still voted in favor of the bill.

“A bipartisan majority of the Senate has spoken,” Menendez said in a statement. “If we are going to reach a deal on raising the debt ceiling, cutting wasteful oil subsidies needs to be on the table.  We cannot reduce the deficits on the backs of working class Americans alone. Even the most wealthy and powerful among us must pay their fair share.”

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access