WASHINGTON -- After a full day of debate in which senators agreed that gas was too expensive and almost nothing else, a Democratic proposal to strip $2 billion in annual tax subsidies from five major oil companies failed Tuesday.

The vote was on a procedural question - whether to bring the bill to the floor for debate. Such motions require 60 votes to pass so while the bill earned a majority, 52 to 48, it still fell short. (Every Democrat voted for it except Mary Landrieu of Louisiana, Ben Nelson of Nebraska and Mark Begich of Alaska while all Republicans except Olympia Snowe and Susan Collins of Maine voted against it.)

Democrats said the vote delays, but does not end, efforts to change tax law that would disqualify Chevron, Exxon Mobil, Conoco Phillips, Shell and BP from pocketing $21 billion in subsidies over the next 10 years.

Oregon Democratic Sens.

and

both voted for the measure and aggressively backed the bill on the floor.

With the setback, Democrats now hope to build their case to include the measure in a deficit-reduction package being negotiated by key lawmakers and the Obama administration. Lawmakers from both parties are demanding deficit reduction as part of deal to increase the government's ability to borrow and avoid an unprecedented default on U.S. Treasury bonds.

Like other Democrats, Merkley highlighted the $36 billion profits the five companies reported over the first three months of 2011, a rate of return that he said brings $5 million to each company every hour of the day. With profits that rich, he and other said, the companies no longer need tax subsidies to encourage exploration and production.

“I think, if you have an ounce of common sense, then you will recognize if you are making $5 million per hour, you do not need taxpayer subsidies to stay afloat,” he said from the floor.

Republicans scoffed at the effort, insisting that removing the subsidies would do nothing to ease the price of gas and suggesting that Democrats are pushing the plan to score political points at a time when consumers are angry at the cost of filling their cars.

“Instead of actually doing something about high gas prices, our Democratic friends staged what one of my Republicans colleagues accurately described as a dog and pony show,” Minority Leader Mitch McConnell said.

“They rounded up what they believed were a few unsympathetic villains who they could blame for high gas prices, hoping nobody would notice they don’t have a plan of their own to deal with them,” he said. “Americans aren’t interested in scapegoats. They just want to pay less to fill up their cars.”

A GOP measure designed to increase offshore drilling is scheduled for a Senate vote on Wednesday, though it is not expected to pass, either. The bill would force the Interior secretary to conduct offshore lease sales in the Gulf of Mexico, Virginia and Alaska that were delayed by the Obama administration after the Gulf oil spill. It also would give the agency a maximum of 60 days to make a decision on a drilling permit. If the agency does not act within that time, drilling would be approved, regardless of the status of environmental and safety reviews.

Merkley conceded that eliminating subsidies would have no direct impact on price, but he insisted that applying the subsidies to reducing the deficit would be good the economy.

“The question we all need to ask ourselves is: Can that $2 billion per year be put to better work than subsidizing companies that are making enormous profits at the pump? One possibility is that $2 billion could go toward decreasing our deficit. A lot of folks on the floor of the Senate talk about how important that is. Which is more important, giveaways to the most profitable companies or reductions in the national deficit?” he asked.

In his remarks from the floor on Tuesday, Wyden pointed out that CEOs from the same five companies unanimously told a Senate committee in 2005 that their companies did not need subsidies to explore and produce. At the time, oil was selling for $55 a barrel. Today the price is nearly $100.

In 2005, Wyden said, "They said they didn't need incentives. There were no qualifiers, no caveats. Period. End of sentence."

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"The CEOs did an about face and frankly, they did it with a straight face," Wyden said.

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