WASHINGTON - Senate Democrats announced a plan Tuesday to eliminate federal tax breaks to the five biggest oil companies and use those savings, estimated at $21 billion over the next 10 years, to help cut the deficit.
Facing pressure from cash-strapped voters to do something about surging gas prices, Democrats want to put a spotlight on highly profitable oil companies and to cut off taxpayer subsidies to the firms.
The proposal, which the Democratic Senate leadership endorsed, would close several longtime tax loopholes, such as the domestic manufacturing tax deduction that could yield roughly $2 billion a year in savings to be applied to lowering the deficit.
Republican leaders dismissed the Democrats' plan, saying it amounts to a tax increase on oil companies and would do nothing to alleviate the pain at the pump. Senate Minority Leader Mitch McConnell, R-Ky., in a floor speech Monday, called the proposal "completely counterproductive."