Reid To Boehner: If You Want $2 Trillion In Cuts, Start With Oil And Gas Tax Breaks

Reid To Boehner: If You Want $2 Trillion In Cuts, Start With Oil And Gas Tax Breaks

WASHINGTON -- Less than a day after House Speaker John Boehner (R-Ohio) demanded that the debt ceiling not be lifted unless the government reduce spending by $2 trillion, Democrats are calling his bluff.

Senate Democratic leadership is asking Boehner to reaffirm support for ending tax breaks to five of the top oil companies as part of his quest to achieve federal savings.

“You can't talk about cuts without first looking at eliminating the giveaways to big oil. It should start there,” Jon Summers, a top spokesman for Senate Majority Leader Harry Reid (D-Nev.), said in a statement. “We agree we have to cut spending, but it is ridiculous for Republicans to push a plan to kill Medicare while trying to defend taxpayer handouts to big oil companies that are making record profits. They don't need the money. If Republicans are serious about cutting spending, they'll support our plan to eliminate welfare for Big Oil so we can apply that money toward the deficit.”

Summer’s retort comes just hours after Boehner upped the stakes over the debt ceiling debate: He told a Wall Street crowd that his caucus would not sign off on raising the limit -- which stands at $14.3 trillion -- unless it was attached to strict spending reductions. Tax increases, he added, are off the table.

“Without significant spending cuts and changes in the way we spend the American people’s money, there will be no increase in the debt limit. And the cuts should be greater than the accompanying increase in the debt limit that the president is given,” Boehner said in an address to the Economic Club of New York. The timeframe for the cuts would be longer than the life of the debt limit increase, meaning that it would be implemented over the course of, likely, several years.

The natural response would be to ask Boehner to actually pinpoint the cuts that he wants. But Senate Democrats are choosing a slightly different tact: proposing their own deficit reduction measures and daring Republicans to object.

Repealing oil company tax breaks is something that Boehner briefly said he would consider supporting before cautioning that he wouldn’t back a policy that could hurt domestic suppliers. Democrats responded by tailoring the proposal so that it hit just the top five companies. Ending their breaks could save the government $21 billion over ten years.

It's a non-starter for Boehner, who sees ending a subsidy as a tax hike.

"Our goal is to increase the supply of American energy to lower costs, reduce our dependence on foreign oil and create American jobs," said Boehner spokesman Michael Steel. "This tax hike would make prices at the pump even higher. That simply doesn't make any sense."

A formal bill is expected to be introduced today with a vote likely to happen early next week, according to a Senate leadership aide.

In the meantime, the Democratic caucus has been given its talking points.

“We have our message today, which is oil,” said the aide. “If [Republicans] are going to have these unspecified targets, ok. But if the goal is to cut trillions, why not start with the oil and gas subsidies?”

Popular in the Community