Democrats are blasting away at U.S. Rep. Denny Rehberg, R-Mont., as a patsy for “big oil,” rapping him for not supporting repeal of oil-industry tax breaks, even as oil corporations rake in big profits.
But Rehberg, who’s taking on U.S. Sen. Jon Tester, D-Mont., in 2012, says he won’t apologize for his support of the oil industry.
“How can Democrats bash oil and on the other hand want (oil) money to support the schools and all the other things they want for the state?” Rehberg said last week. “Why continually bash the golden egg that has somewhat kept Montana in the black?
“Of course I’m going to be supportive of oil, and gas, and coal.”
Rehberg did tell a town-hall meeting in Columbus two weeks ago that “everything is on the table” when it comes to looking at tax breaks for the oil industry, and he told Lee Newspapers last week that he wants “to take a look at (oil industry tax incentives) and make sure they still make sense.”
But he’s not supporting Democratic proposals to cut back those subsidies.
Congressional Democrats, including Tester, are behind a bill introduced this month to repeal a 6 percent corporate tax deduction on domestic oil production for the “big five” oil companies, as well as a provision that allows oil companies to deduct their royalties paid to foreign government on foreign oil production.
The latter deduction reduces U.S. corporate income taxes for oil companies. Again, the bill would erase this deduction for the big five companies.
Tester said last week the bill ends $4 billion a year in “taxpayer handouts,” which allow big oil to write off foreign royalty payments, pay less federal taxes and subsidize foreign oil production.
“This bill has nothing to do with Conoco’s or Exxon’s ability to operate U.S. refineries or put Americans to work,” he said. “It has everything to do with holding their top-level executives accountable to all American taxpayers.”
Rehberg, however, said he doesn’t see why an oil company should pay both foreign and U.S. taxes on the same production, and that eliminating the domestic production credit doesn’t make much sense.
“If we can increase our independence from foreign countries by expanding production in the outer (offshore) shelf … then why shouldn’t we create incentives to have that opportunity to do it?” he said. “Those (wells) cost a lot of money.”
Montana’s top oil industry lobbyist agrees with Rehberg, arguing in a letter sent this month to U.S. Sen. Max Baucus, D-Mont., that eliminating these tax credits will harm Montana refineries in Billings and give an advantage to foreign oil companies.
“This legislation would increase gas and diesel prices and could jeopardize good-paying jobs in Billings,” wrote Dave Galt, executive director of the Montana Petroleum Association. “(We) urge you not to proceed with introduction of the legislation that will do irreparable harm to Montana’s refining industry.”
Tester said the tax changes that he supports and Rehberg apparently opposes are “about equity,” and that savings from eliminating the tax breaks would be used to help pay down the federal deficit.
“(Rehberg) has voted on the side of big oil all the time; that’s where his allegiance lies,” Tester said.