WASHINGTON (CN) – The Senate on Monday continued to debate whether to approve a $140 billion legislation package that would extend tax breaks and unemployment benefits and would increase taxes on oil companies. The bill has been stalled as Senate Republicans accuse Democratic lawmakers of using revenue from the proposed tax hike to pay for government programs such as Medicaid.
“They’re using the crisis in the Gulf not only as cover for even more government spending, but as a major source of funding for it,” U.S. Senate Republican Leader Mitch McConnell of Kentucky said of Senate Democrats during a floor speech last week. “This is an outrage.”
The bill, called the American Jobs and Closing Tax Loopholes Act of 2010 or the Tax Extenders Bill, would ensure continued tax cuts for small businesses, which lawmakers hope will spur job creation.
It also proposes to increase five-fold the amount that oil companies pay into the Oil Spill Liability Trust Fund, the spill response fund created under the Oil Pollution Act of 1990, from 8 cents per barrel to 41 cents per barrel. The tax hike would generate $15 billion in revenue over 10 years.
“Democrats are using this bill as another opportunity to extend government’s reach,” McConnell said. “They’re quintupling the tax oil companies pay into the Oil Spill Liability Trust Fund that was created in the wake of Exxon Valdez. And instead of using this money to clean up the oil spewing in the Gulf, they’re raiding the trust fund to pay for new, unrelated spending.”
McConnell said it’s a throwback to White House Chief of Staff Rahm Emanuel’s statement in November 2008, when he said, “You never want a serious crisis to go to waste.” McConnell called it “one motto that defines this administration.”
Sen. David Vitter, R-La., submitted an amendment for the bill last week requesting that the spill response fund “be used for the purposes of the fund and not used as a budget gimmick to offset deficit spending.”
Senate Majority Leader Harry Reid, D-Nev., and other Senate Democrats shot back at Republicans, accusing them of shielding “big oil” by not wanting to remove tax loopholes for oil and gas companies.
“Today, with thousands of barrels of oil still gushing into the Gulf, Republicans are shamelessly protecting oil companies from accountability for their greed, recklessness and negligence,” Reid said. “The American people would be a lot better off if Republicans spent their time working with Democrats to hold BP accountable and ensuring that a disaster like this never happens again, instead of repeatedly protecting Big Oil and every other corporate special interest under the sun.”
Reid said the bill “includes a host of tax credits, tax extenders and tax incentives” for families and small businesses as well as extend unemployment insurance to help jobless Americans “keep their heads above water.”
On the Senate floor Monday, McConnell asked that jobless benefits be extended for 30 days.
“A 30-day extension doesn’t solve the problems we have,” Reid said, objecting to McConnell’s proposal. “It’s just kicking the ball down the road,” he said.
The Senate will continue consideration of the bill this week.
Reid needs at least one Republican to vote to close debate on the bill and bring it to a final vote.