Oil CEOs Defend Tax Breaks On Capitol Hill

CEOs from major oil companies were on Capitol Hill Thursday, testifying about the tax advantages their industry enjoys. Some senators and the Obama administration want to remove those tax breaks.

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ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

We're going to begin this hour on Capitol Hill. Executives of the five largest U.S. oil companies were there to face a scolding from Democrats. The senators asked why the oil industry should continue to receive lucrative tax breaks when people are paying four dollars a gallon for gasoline. Republicans called the hearing political showmanship.

Coming up, we'll put some of our own questions to a representative of one of those oil companies, ConocoPhillips.

But, first, NPR's Jeff Brady tells us about today's hearing.

JEFF BRADY: Executives from Shell, ExxonMobil, ConocoPhillips, BP and Chevron sat behind a table before the Senate Finance Committee. Some of the most pointed criticism came from the great grandson of oil tycoon John D. Rockefeller, Democratic Senator Jay Rockefeller of West Virginia.

Senator JAY ROCKEFELLER (Democrat, West Virginia): I think you're out of touch, deeply, profoundly out of touch and deeply and profoundly committed to sharing nothing.

BRADY: Oil companies oppose a bill in the Senate that would get rid of tax breaks for the industry worth more than $2 billion a year. The proceeds would go toward reducing the country's deficit.

Chevron CEO John Watson said Congress should help oil companies succeed even more rather than looking for ways to penalize the industry.

Mr. JOHN WATSON (CEO, Chevron): I would tell you that I don't think the American people want shared sacrifice. I think they want shared prosperity. And what we have to offer, Senator...

Sen. ROCKEFELLER: Oh, you no. A lovely statement, but do you understand how out of touch that is? We don't get to shared prosperity until we get to shared sacrifice.

BRADY: Senator Rockefeller said the executives appeared to have no idea how much some Americans are suffering right now, something ExxonMobil's CEO Rex Tillerson disputed.

Mr. REX TILLERSON (CEO, ExxonMobil): Well, first, Senator, I want to assure you I'm not out of touch at all. And we do understand the big picture. We understand the enormous challenges confronting the American people with respect to this enormous deficit that has to be dealt with.

BRADY: The executives argued that resolving the deficit is not their duty alone and they shouldn't be singled out. Most often, the executives found allies in the Republicans on the Senate Finance Committee.

Utah Senator Orrin Hatch said the hearing was designed to score cheap political points for Democrats.

Senator ORRIN HATCH (Republican, Utah): I have a chart depicting what I expect this hearing to turn into, and there you go.

BRADY: An aide held up a photo of a dog riding on the back of a horse, suggesting this was a dog and pony show. Finance Committee Chair Max Baucus of Montana asked Senator Hatch a question as the audience laughed.

Senator MAX BAUCUS (Democrat, Montana): Who's the horse and who's the dog?

(Soundbite of laughter)

Sen. HATCH: I think we both know.

(Soundbite of laughter)

Sen. HATCH: I know who the horse's ass is, I'll put it that way.

BRADY: Senator Hatch later apologized for his language, but stuck to his main point that nothing in the legislation would reduce gasoline prices for consumers. He echoed a point made often by the executives that Congress should encourage more domestic oil production by making it easier to get offshore oil leases, for example.

Near the end of the hearing, Montana Democratic Senator Max Baucus began negotiating with ExxonMobil's CEO.

Sen. BAUCUS: Here's something. How about a trade here? More leases, give up the tax breaks.

(Soundbite of laughter)

Mr. TILLERSON: I don't think I came to negotiate a trade with you today, Senator. I came to answer your questions.

Sen. BAUCUS: That just popped in my mind.

BRADY: Ultimately, it's unlikely the Senate's legislation will become law without support in the House. Still, Senate Majority Leader Harry Reid is expected to bring it up for a vote next week.

Jeff Brady, NPR News.

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