Presented by the Barefoot Accountant
Cenk Uygur: $36 billion is how much oil companies stand to get from taxpayers over the next 10 years. That’s about $4 billion a year of your money. President Obama wants to fight to end these tax breaks. He says he wants to strike these tax breaks from his next budget and hand the money back to you, me and everyone else who pays taxes. That would be phenomenal. And yet the Republicans will probably still say no. Over $36 billion for big oil and the Republicans love it. What happened? I thought they were so worried about this deficit? It’s a perfect opportunity to cut.
President Obama has been trying to end these subsidies for three straight years now and it’s gotten voted down every time in Congress. Well maybe that’s because these poor oil companies need the tax breaks, right? Let’s take a look at their bottom line and find out.
In 2009, Exxonmobil pulled in almost $20 billion in profits, Chevron over $10 billion and ConocoPhillips nearly $5 billion. Why on God’s green earth are we giving the most profitable companies in the world our taxpayer money? Again, conservative and liberals should hate this; we should all unite on this.
Now you want to know why they get the money anyway. For years, the industry has been one of the biggest lobbying forces in Washington, shelling out more than $110 million in 2010. Much of the money came straight in from those three companies I just mentioned: Exxonmobil, Chevron and ConocoPhillips.
And lobbying also explains what might be the biggest travesty of all. In 2009, when Exxonmobil posted $20 billion in profits, it got back $156 million in Federal taxes from the United States government. And Chevron got $19 million back. Look, this is exactly what’s wrong with our system. Money goes into politicians pockets; votes come out. Taxpayers lose; the lobbyists win. The politicians don’t represent us. They represent the people who pay them. And in this case, it’s the oil companies. And now I want to bring in former Pennsylvania Governor Ed Rendell. He’s now an NBC News political analyst. Governor Rendell, I’ll ask you if I’m being too cynical but what other reason is there to not pull back these subsidies from the world’s richest companies?
Ed Rendell: There’s no reason whatsoever. In fact, we should take away all subsidies to any energy company that’s mature. To renewable energy companies that are growing and that have a short life span, they need subsidies, they need tax credits, and they need loan guarantees until they reach maturity and can compete economically, because we want them to grow. But it is a disgrace. You cited Exxon figures, but Exxonmobil, i think, their last quarter was the most successful quarter in the history of the world by any corporation. And that’s obscene. When you talk about $36 billion, about taking that away, the average citizen might say that that $36 billion is a lot of money, but that’s less than 1% of what the oil companies will gain in revenue in that decade: 1%.
Cenk Uygur: And accordingly it might not matter much to them, but it matters to us: that’s a lot of money for us. And I know the Republicans claim that they want to cut the deficit, but, you know, sometimes it’s bipartisan here. Why can’t we get this through Congress?
Ed Rendell: Well, you hit the nail on the head. By the way, we didn’t get it through Congress the first two years President Obama was President because some of the Democrats voted to continue the subsidy. And what we’ve got to be clear, I think what the people have to be clear on, is who’s voting against our interests for these big companies that are making enormous profits. It should be a campaign issue; and it should be a campaign issue in the Democratic primary and it should be a campaign issue in the general election. It’s a legitimate issue. These companies do not deserve tax subsidies. The idea that somehow removing the subsidies will hurt their growth, that’s baloney. One of the gas companies — a gas company filed a report with the SEC where they said they expected a 64% return on investment this year. Well, that’s simply, you know, obviously something that’s off the charts. And we want them to make money, we want more exploration, we want more drilling, because we want American independence. We want our gas companies to be able to drill so we can produce our own form of energy. But they shouldn’t get a subsidy.
Cenk Uygur: Yeah, no question about that. Now, you mentioned using it as a campaign issue. So now, the President has already put it up twice and it’s gotten defeated twice. He’s putting it up a third time. Is the idea behind making it a campaign issue so it creates pressure on the politicians to actually change their vote, is that how you would actually get it done?
Ed Rendell: Sure, the one thing that politicians fear more than losing money, losing campaign contributions, is losing votes. But basically they’ve been able to continue these subsidies with a sort of veil of anonymity around them. It never gets framed as a particular issue. And if it was, what do you think if we polled right now, let’s say we went into any state in the Union, red state, blue state and polled, should Exxonmobil that made the highest corporate profits in the history of the world in the last quarter get taxpayer subsidies? It would probably poll 90% no, 7 or 8% yes.
Cenk Uygur: Yeah, I think 7 or 8% would be high. Why would any average American want to pay money out of their own pocket to the most profitable company in the world? It doesn’t make any sense. You’re saying pressure is the only thing that works in this case. If you point that out. Look, here’s Republican X or Democrat Y voting for this, that’s going to make them change their vote.
Ed Rendell: We could have gotten rid of these subsidies when both houses of Congress were run by Democrats and President Obama proposed it. So there are Democrats who voted to continue these subsidies as well. And some of these subsidies are not necessary. The only energy companies that we should be subsidizing, let me repeat again, are the new ones, the new renewable, alternative renewable energy companies that need a little time to grow, that need a little help for them to be in position to produce a significant amount of production. Those companies we should be subsidizing, with everything, loan guarantees, subsidies, making tax credits permanent so that Wall Street will have confidence in investing in them. But other than them, we shouldn’t be subsidizing. You know, the corner grocer doesn’t get subsidized. The guy who sells sweat shirts doesn’t get subsidized by the government. And neither should the mature energy companies.
Cenk Uygur: Right. And by the way, the subsidies in the budget that the President announced last year was about $500 million for renewable energy companies, as opposed to $36.5 billion for the oil companies. There’s something wrong there. But Governor Rendell, you got it exactly right as to what the core problem is. Thank you.