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Guest: Senator Sherrod Brown

By Rachel Maddow Show, Rachel Maddow Show - March 29, 2012

Guest Host: Chris HayesGuests: Dan Dicker, Walter Dellinger, Sherrod Brown

CHRIS HAYES, GUEST HOST: Good evening, Ed. Thanks so much.

And thank you at home for staying with us for the next hour. Rachel has the night off.

All right. Something happened in Washington, D.C. today that at the surfaced level was the most banal, the most run of the mill thing in the entire universe. It was the most expected, least surprising thing and will probably appear on page A19 of tomorrow`s newspaper.

Today, in Washington, the United States Senate rejected an attempt to end oil industry subsidies. Why wasn`t that surprising?

Because President Obama was for ending those oil subsidies and so were Democrats in the Senate. But the Republicans filibustered and so it died. That three bullet point explanation can basically be said about everything that has happened in Washington since 2010 or more-or-less.

But if you just think about it for a second, in this particular case, if you don`t accept it at face value and you instead take this case and hold it up to the light 15 degrees to see it at a new angle, it is down right bizarre that this happened.

It is a true mystery that at a time when deficit scare-mongering rules the Beltway and physical probity is the flavor of the month, when nobody likes the oil companies, the Democrats have a majority in the Senate, and the president in the White House, they weren`t able to pluck this imminently low hanging fruit. It is a mystery, a classic Washington caper.

Why does this particular piece of policy persist? There`s a few possible reasons. Maybe because this is a popular piece of policy, right? No. That can`t be it. The NBC News polled on the issue last year and found that 74 percent of Americans -- 74 percent -- would like to do away with this policy. Three-quarters of Americans would be in favor of eliminates tax subsidies for oil and gas industries.

And every year, Gallup polls people on how they feel about various industries in this country. And out of the 25 industries they polled on last year, the oil and gas industry came in 24th place, in terms of favorability.

OK. So the oil and gas industry is not very popular. The policy itself is not very popular. Well, then, maybe it`s the case that subsidizing the oil and gas industry is a good piece of policy. It might be unpopular but economists everywhere recognize it is fundamentally sound. But that`s not it either. Economists on the left have long argued for the elimination of oil subsidies.

And here`s the view from the right. "Eliminating oil subsidies: two cheers for President Obama." That`s from the libertarian Cato Institution.

This from the conservative Heritage Foundation, quote, "Ending all energy subsidies, including those for oil and gas would be good for American taxpayers and consumers."

OK. So, it`s actually not universally recognized as good policy. Maybe this is an industry that`s on life support and needs the help. Nobody liked the auto bailout but saving the auto industry was good for the overall U.S. economy. So, maybe it`s not optimal policy and it`s not popular but it`s just one of those things we kind of need to suck it up and do because the oil and gas industries are in such dire straits, except -- well, obviously not.

The oil and gas industry is quite literally the most profitable industry in the history of human kind. The big oil companies essentially mint money. The most recent quarter, the top five oil companies made a combined profit of $32 billion.

OK. Well, finally, maybe there`s a just a durable, robust partisan divide on this issue where people on different side of the aisle just see the facts of the matter so differently they cannot reconcile them. They can`t come to the kid of consensus needed to get it over the hump. Maybe Republicans are just 100 percent fundamentally opposed to the idea of ending oil subsidies.

(BEGIN VIDEO CLIPS)

GEORGE W. BUSH, FORMER U.S. PRESIDENT: I will tell you, with $55 oil, we don`t need incentives to oil and gas companies to explore. They have plenty of incentive.

SEN. MARK KIRK (R), ILLINOIS: I have voted to wipe out many of the oil company subsidies. They`re doing just fine on their own.

SEN. SUSAN COLLINS (R), MAINE: We simply should not expect taxpayers struggling to pay their energy bills to continue to subsidize the oil industry.

SEN. DAN COATS (R), INDIANA: Look, I said everything`s on the table. That includes ethanol. That includes all subsidies.

UNIDENTIFIED MALE: Oil and gas subsidies?

COATS: On the table.

UNIDENTIFIED MALE: On the table.

SEN. JOHN THUNE (R), SOUTH DAKOTA: If, in fact, they are making such enormous profits, perhaps they don`t need the support and tax incentives given to them by the American taxpayer by the United States Congress.

REPORTER: Would you be in favor of seeing some subsidies going to big oil at times of record profits?

REP. JOHN BOEHNER (R-OH), SPEAKER OF THE HOUSE: It`s certainly something we ought to be looking at?

REPORTER: Doing away with these subsidies.

BOEHNER: We are at a time when the federal government is short on revenues, we need to control spending but we need revenues to keep the government moving, and they ought to be paying their fair share.

(END VIDEO CLIPS)

HAYES: All right. So, that`s not it either. Even President Bush, the quintessential Republican oilman is on record saying we don`t need oil subsidies.

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