The Associated Press May 12, 2011, 10:36AM ET

Schumer seeks to end US subsidies of oil companies

U.S. Sen. Charles Schumer, D-N.Y., is proposing to end what he says are $4 billion a year in tax subsidies to the biggest oil companies.

The subsidies date back decades as an incentive for small- and medium-size oil companies to explore for more oil sources.

But instead, Schumer says the subsidies have become a tax break for oil producers at a time when gasoline costs more than $4 a gallon in New York.

Democrats in recent years have often targeted the gas and oil company tax breaks, but they have not been able to muster enough votes to rescind them. Republicans defend the tax benefits, saying they're needed to boost domestic oil and gas development.

Schumer says the chances are better now because of the need to close the federal deficit.

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