Republican presidential challenger Mitt Romney hinted he could eliminate billions of dollars in U.S. oil and tax breaks if he were elected, but the reductions would be far less than what President Barack Obama wants.
Romney signaled in the first presidential debate in Denver on Wednesday that annual reductions of some $2.8 billion in tax breaks for oil and natural gas companies could be eventually traded for a lower corporate tax rate if he won on Nov. 6.
"If we get that tax rate from 35 percent down to 25 percent, why that $2.8 billion is on the table," Romney said at the debate in Colorado, a state that produces both fossil fuels and clean energy like solar and wind power. "Of course it's on the table. That's probably not going to survive if you get that tax rate down to 25 percent."
Obama's tax plan overhaul calls for a more moderate reduction in the corporate tax rate of 28 percent. But he has long pushed for steeper reductions in oil and gas breaks of $4 billion annually.
Both candidates' plans to trim oil and gas tax breaks would face uphill battles in Congress because the industry has gotten the breaks for decades.
But Kevin Book, an analyst at ClearView Energy Partners in Washington, said he sees a potential opening for cutting some of the breaks because conservative leaders in the House of Representatives represent energy consumers rather than energy producers. The opposite was true during the administration of George W. Bush.
Romney also used the tax debate to slam Obama's 2009 green energy stimulus. "In one year you provided $90 billion in tax breaks to the green energy world," the Republican said, bringing out a line he has used on the campaign trail since August. "Now I like green energy as well, but that's about 50 years' worth of what oil and gas receives."
Americans for Prosperity, a non-profit advocacy group backed by the conservative Koch brothers, said Obama has wasted $90 billion on green energy "schemes" like Solyndra, a solar panel maker that went bankrupt after it got more that $500 million in government loans.
The $90 billion number is exaggerated, Book said, because some of the funding went to projects that were initiated during the Bush era and because some of it has yet to be distributed.
Obama did not respond to Romney's description of the size of the clean energy stimulus.
© 2014 Thomson/Reuters. All rights reserved.