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Posted at 04:48 PM ET, 05/17/2011

Reid: Debt-limit deal will include repeal of oil company subsidies

Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that he is “confident” that a final deal on raising the country’s debt limit this summer will include a repeal of tax subsidies for the top five oil companies, a top Democratic agenda item.

“I am confident that before we finish our budget negotiations here, in anticipation of raising the debt ceiling, that that will be part of it,” Reid told reporters after Senate Democrats’ weekly caucus luncheon. “There is no justification for giving these companies that are making so much money, and their own executives said these subsidies are unnecessary, there’s no justification for continuing that.”

The Treasury Department has projected that Congress has until Aug. 2 to raise the $14.3 trillion federal debt ceiling before the country risks default.

Democrats have been pushing for repealing subsidies for the five biggest oil companies, arguing that the move would not only serve to lower gas prices but would also make a dent in the national debt. Republicans and the oil industry have contended that rather than alleviating gas prices, repealing the subsidies would increase costs for consumers and would also make only a trivial impact on the country’s debt.

Later Tuesday, the Senate will vote on a Democratic measure that would repeal the tax subsidies. The bill is not expected to garner the 60 votes necessary to proceed in the Senate. A Republican counter-proposal aimed at opening up more federal land for energy exploration is also expected to fall short when it comes up for a vote on Wednesday.

By  |  04:48 PM ET, 05/17/2011

 
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