Pawlenty defends Big Oil: Cutting oil subsidies is ‘ludicrous’

Tim Pawlenty is proud that, “Every one of us” running for president has flip-flopped on climate change.  Unsurprisingly, I suppose Pawlenty now defends the massive subsidies for Big Oil even in the face of their record profits.  Think Progress has the story:

Oil giant Exxon last week, on the same day that announced nearly $11 billion in first-quarter profits, publicly whined about the renewed push by Congressional Democrats and President Obama to cut the nearly $4 billion in subsidies that oil companies collect every year. “What they really mean is that they want to increase our taxes by taking away long-standing deductions for our industry,” griped Exxon’s vice president for public and government affairs Ken Cohen.

Echoing those sentiments, 2012 GOP presidential hopeful Tim Pawlenty said over the weekend that cutting oil subsidies would be “ludicrous,” and a “tax increase”:

“I think we should have a discussion about all subsidies,” Mr. Pawlenty told Washington Wire at a forum for 2012 GOP presidential hopefuls. “But the Obama proposal is ludicrous. I mean the worst thing we could do is raise the cost burden on costs on energy and oil”¦What he’s proposing is a tax increase on energy at a time when the gas is $4 a gallon. It’s preposterous.

But as Sima Gandhi pointed out, contrary to Pawlenty’s pronouncement, oil subsidies don’t lower prices at the pump for American consumers:

A Joint Economic Committee report states, “the removal or modification of [one of these subsidies] is unlikely to have any effect on consumer prices for oil and gas.” The committee found that subsidies do not affect production decisions in the near term. And in the long term the Energy Information Administration explains that the major factors affecting oil prices include the production limits set by the Organization of the Petroleum Exporting Countries and global disruptions in supply. Moreover, the minimal impact of tax subsidies on domestic production (as discussed above) underscores that eliminating tax subsidies will have little, if any, effect on oil prices.

Meanwhile, Pawlenty’s preferred model for lowering gas prices “” opening up more federal land for drilling “” would have a negligible effect, as even the Republicans’ favorite economist, Douglas Holtz-Eakin, admitted.

Pawlenty’s also decrying subsidy cuts as a tax increase when oil companies are the most profitable companies in the history of the world and are paying very little in taxes. Exxon, for instance, paid nothing into the U.S. Treasury in 2009. The sky-high profits that oil companies have made over the last five years overwhelmingly went to lining the pockets of the companies’ executives.

— A Think Progress cross-post.

7 Responses to Pawlenty defends Big Oil: Cutting oil subsidies is ‘ludicrous’

  1. Lore says:

    Of course Tim Pawlenty has got it backwards. Although I would be more suprised if the charge of ludicrous didn’t come from his lips. Anything to help a friend who scratches my back.

  2. Ziyu says:

    Oil prices are set on a global market. Cutting subsidies for oil only decreases big oil’s profits. They can’t charge more for the oil. It’s a win win situation.

  3. Theodore says:

    Personal income taxes should be abolished. Corporate income taxes should range from 1% to 99%. The purpose of the 99% income tax should not be to raise money for government, but to diminish the political influence of corporations by constraining their size. Environmental behavior modification taxes would be able to meet the financial needs of government if the corporate income tax were insufficient.

  4. malcreado says:

    >Pawlenty’s also decrying subsidy cuts as a tax increase

    Yeah they all are using the same verbiage. It resonates with their base. If Obama wanted to stir their base against the these subsidies he would take over the messaging. Start calling it Corporate Welfare and he might start to rile the right of center enough to get movement on the issue.

  5. Mike Roddy says:

    It’s ludicrous for Tim, all right, since he’s in the trough.

  6. Mulga Mumblebrain says:

    malcreado, what mystifies me is the mental processes that lead [snip] the Tea Party Mad Hatters to identify with those responsible for their falling living standards, rather than with the other victims of that process. How people can come to direct their hatred at falling living standards, rising indebtedness and the destruction of their children’s life prospects, at those even poorer than themselves, leaves me stupefied. I have lived in this state for years, ever since I discovered that many of my confreres at school were self-declared ‘Rightists’ because they thought that ‘Right’ in ideological terms meant the same thing as ‘correct’.

  7. Merrelyn Emery says:

    Mulga #6. That is a very serious question as what as we are all seeing now, particularly in the USA, is the political version of the ‘old lag syndrome’. It is well known in prisons and to penologists from whence comes the name.

    Anybody kept long enough in an authoritarian state such as a prison or a representative democracy, develops one of three assumptions which play out in the behaviours of dependency, fight/flight or ‘pairing’ (attempting to assume the leadership).

    The ‘old lag syndrome’ is the final symptom or stage of dependency where the person concedes defeat, puts away their status as a purposeful system with free will and hands themselves over, body and soul to the ‘authority’, the system and the ‘leader’.

    They begin to revere the ‘leader’ and the dominant hierarchy and revel in its glorious achievements. They back its every move and join whole heartedly in ensuring its future success, ME