Democrats seek to slash subsidies for 'Big Oil'

By ANDREW TAYLOR | May 10, 2011 | 12:14 PM EDT

WASHINGTON (AP) — Democrats running the U.S. Senate are seeking to take away tax breaks that pad the profits of the five biggest oil companies by $2 billion a year and use the money to attack the spiraling deficit.

The new legislation would cut off immensely profitable companies like Shell Oil and Exxon Mobil from subsidies like a deduction originally aimed at boosting manufacturing. The oil companies have booked profits of $36 billion in the first quarter of 2011.

Democrat Robert Menendez acknowledged that the legislation — slated for a vote next week — will not do anything about gas prices that now exceed $4 a gallon ($1 a liter) in many places.

Republicans are expected to try to delay the bill. They say the companies would raise prices if the measure became law.