House Majority Leader Eric Cantor (R-VA) blew up debt ceiling negotiations with Vice President Biden last week due to the GOP’s insistence that any budget deal not include one dime of revenue. As we’ve been documenting, the GOP walked away in order to protect Americans making more than $500,000 and large corporations from seeing their taxes increase at all.
One of the other sources of new revenue suggested by Congressional Democrats during the negotiation was cutting oil subsidies. But over the last few years, Republicans have continually gone to bat to protect these subsidies, and this time was no exception. In fact, House Majority Whip Kevin McCarthy appeared on Bloomberg’s Political Capital with Al Hunt over the weekend, where he insisted that oil subsidies be taken off the table during the budget negotiations:
HUNT: Let me ask you about if you would go along with any so-called ending some tax expenditures. The oil industry is making record profits right now. Would you oppose, in order to reduce the deficit, ending the oil depletion allowance for major oil companies?
MCCARTHY: Look, in America today, we use 19 million barrels a day, and we produce roughly seven million. If you want to create a system that says we are going to rely on more money being spent on oil in other countries that create jobs in other countries, I say no. Invest in American jobs.
HUNT: Right. So am I to take it that you would oppose any new oil depletion allowance for major companies?
MCCARTHY: I would enhance the ability that we invest in American jobs and American energy.
HUNT: You are so good. But you would oppose ending the oil depletion allowance?
MCCARTHY: Look, you can raise the question -
HUNT: Can I say yes to that?
MCCARTHY: No, you can raise the question any way you want. But the sheer fact that you want to create a system that sends more money out of America and makes us more dependent on other countries, I say no.
However, after taking oil subsidies off the table — which cost U.S. taxpayers about $4 billion annually — McCarthy said Medicare cuts must be part of any deal to raise the nation’s debt limit. Over the weekend, House Minority Leader Nancy Pelosi (D-CA) said she wants reductions in corporate tax subsidies to be part of the final deal.