A Project of The Annenberg Public Policy Center

Oily Words

Clinton and Obama shade the truth as each claims to be tougher on oil companies than the other.


Summary

Clinton and Obama are slamming each other and the oil companies in dueling radio ads in Pennsylvania. Both ads exaggerate and twist the facts. Both ads say, in effect, that the opposing candidate is reluctant to offend oil companies due to campaign donations. The truth is they both propose energy plans that are similar, and which the oil giants won’t like. 

  • Obama’s ad claims, "Clinton’s taken more from big oil and other PACs and lobbyists than any other candidate, Democrat or Republican." Actually, Clinton is fourth and Obama is a close fifth when it comes to donations from oil and gas industries.
  • Clinton’s ad says that "she’s the one who will make oil companies pay" to support her clean-energy initiatives. In fact, both candidates propose to spend $150 billion for energy improvements over 10 years, and both propose to pay for some part of that through higher taxes on oil companies.
  • Obama’s ad says it is he who is "demanding higher gas mileage standards." Actually, both candidates voted for last year’s increase in those standards and both candidates propose further increases in the future. Clinton’s proposed increase is a bit higher than Obama’s, in fact.
  • Clinton faults Obama for voting for the 2005 energy bill, which she calls "the Bush Cheney energy bill." But the compromise Obama voted for was supported by most Senate Democrats and lacked many of the administration’s original proposals. As we’ve said before, it resulted in a small net tax increase on oil companies.
  • Obama’s ad talks of "gas prices close to four dollars a gallon" in Pennsylvania. Actually, the statewide average for a gallon of regular gasoline is $3.32, according to the American Automobile Association.

Analysis

Sen. Hillary Clinton’s campaign released her radio ad April 9, and Sen. Barack Obama’s rebuttal ad was launched the following day. Both are airing in Pennsylvania, where Clinton and Obama face each other in a Democratic presidential primary election on April 22. 

Oil Money
 
  
(Click to Play Audio)
 

[TET ]

Hillary for President Radio Ad: "Real Life"

Announcer: In his TV ads, Barack Obama sounds like he’ll take on the oil companies.

Obama: I don’t take money from oil companies.

Announcer: What he doesn’t tell you is that “no candidate does … they can’t,” according to the Annenberg Center’s Factcheck.org . . . It’s been against the law for companies to donate to candidates for a hundred years.
Listen to Barack Obama some more.

Obama: Now Exxon’s making forty billion dollars a year and we’re paying three fifty for gas.

Announcer: Obama doesn’t mention that he voted for the Bush Cheney energy bill. It was called a piñata of perks and the best energy bill corporations could buy.
Hillary Clinton voted against that bill.
She’s the one who will make the oil companies pay to set up a new strategic energy fund that will cut our dependence on foreign oil, invest in new clean energy and create five million new jobs.
It’s time for a president who takes on the oil companies in real life, not just on TV. Hillary Clinton.
[/TET]

The Clinton ad criticizes Obama for saying "I don’t take money from oil companies," and it cites our March 31 article as evidence to the contrary. Obama’s ad says, "Clinton’s taken more from big oil and other PACs and lobbyists than any other candidate, Democrat or Republican." Both candidates have a point, but both strain the facts. Actually, both have accepted a few hundred thousand dollars from sources in the oil and gas industry, but these make up a tiny percentage of their total contributions.
 
Obama accepts no money from oil companies directly (which would be illegal), and he also turns away donations from the political action committees set up by oil companies and other interests and refuses money from active lobbyists for oil or any other industry. We faulted him earlier for a TV ad in which he claimed, "I don’t take money from oil companies." In fact, he does accept donations from oil company employees, and he has two oilmen working as "bundlers" for the campaign, collecting donations. In his radio ad he states matters more accurately, saying he’s "the only candidate who doesn’t take a dime from oil company PACs or lobbyists."
 
Clinton takes lots of money from lobbyists and PACs from a wide variety of companies and industries. In fact, just as Obama’s ad states, she has accepted more from PACs ($1,157,939) and from current and former lobbyists ($865,290) than any other candidate of either party, according to public records tallied by the Center for Responsive Politics. (McCain is second in both categories, with $687,794 from PACs and $590,952 from individual lobbyists.) The figures are based on the most recent reports filed, as of March 20. (CRP also shows $115,163 from lobbyists to Obama, though he says this is all from former lobbyists, not those currently active.)
 
But the fact is that little of Clinton’s money comes from the oil and gas industry, the focus of both ads.
 

In fact, Clinton’s total from oil and gas company PACs and employees ranks fourth among the candidates (behind Republicans Rudy Giuliani, Mitt Romney and McCain), and Obama’s ranks fifth, according to CRP.

More to the point, the amounts accepted by Clinton and Obama make up an insignificant fraction of the record totals that they have raised for their campaigns overall. Oil and gas money makes up just 18 pennies for every hundred dollars received by Clinton and 11 pennies for every hundred dollars raised by Obama. For these two candidates to be suggesting that the other is somehow influenced by oil industry donations rests on scant evidence, to put the matter charitably.

Who’s "The One"?

(Click to Play Audio)

[TET ]

Obama for America Radio Ad: "Fill"

Announcer: Across Pennsylvania, we’re living the problems. An economy in shambles. Families struggling. Gas prices close to four dollars a gallon.

What’s Hillary Clinton’s answer? Misleading negative ads. Here’s the truth.

While she’s played political games, it’s Barack Obama who’s taken on the oil companies, demanding higher gas mileage standards and a larger investment in alternative energy.

It’s Obama who’s worked to strip tax breaks from the oil giants as they roll up record profits.

And he’s the only candidate who doesn’t take a dime from oil company PACs or lobbyists. The only one.

The Federal Election Commission reports that Clinton’s taken more from Big Oil and other PACs and lobbyists than any other candidate, Democrat or Republican.

The same old Washington politics isn’t going to lift our economy or bring down gas prices.
So if you’ve had your fill of that…
Vote for change we can believe in, Barack Obama for President. [/TET]

Clinton’s ad claims she’s "the one" who proposes to make oil companies pay for clean-energy initiatives. Obama’s ad claims "it’s Obama" who has worked to reduce oil company tax breaks. In truth, neither candidate can claim exclusive credit for these positions. Both candidates have similar proposals and records.
 

Both Clinton and Obama propose to spend $150 billion over 10 years for energy improvements. Clinton says she’ll fund her new spending in part by raising taxes on oil companies and repealing tax incentives for the industry. Obama’s energy plan also states that he’ll "repeal tax breaks for the oil and gas industry." We don’t see much distinction here.

We also see little difference in their past records regarding tax incentives for the oil industry. In 2006 Clinton introduced a bill calling for a 50 percent tax on "excess oil profits" and elimination of a number of tax incentives for the oil industry. And in 2007 Obama introduced a bill of his own that also would eliminate a number of tax incentives. Neither bill attracted any cosponsors. Clinton’s died in the Senate Finance Committee at the end of the last Congress, and Obama’s is still languishing in the same committee.

 
Real Differences, Exaggerated
 

There are some real differences in the voting records of the two candidates on energy, but even here these dueling ads exaggerate and strain the facts.

Oil Tax Breaks. Clinton’s ad faults Obama for voting in favor of the 2005 energy bill, which she voted against. She misleads, however, by describing it as "the Bush Cheney energy bill." By the time Obama voted for final passage, many of the Bush administration’s original proposals had been stripped out, and in fact most Senate Democrats (including some of Clinton’s most vocal supporters) sided with Obama in supporting the bill. Clinton was one of only 19 Democrats to vote against final passage. Obama was among the 25 Democrats who voted in favor.

It’s true, as the Clinton ad states, that the bill "was called a piñata of perks." That was from a Washington Post report from 2005, which discussed criticism of the bill. The ad also is correct to say that the bill was called "the best energy bill corporations could buy," a criticism that came from Public Citizen, the consumer advocacy organization. But it’s also true, as we’ve noted a number of times, that the Congressional Research Service later calculated that the oil and gas industry lost more tax breaks than it gained in the 2005 legislation, resulting in a net tax increase that CRS put at $300 million over an 11-year period. Not mentioned by Clinton is the fact that (as we’ve noted several times before) the $14.3 billion in tax breaks in the bill included large incentives for alternative fuels research and subsidies for energy-efficient cars, homes and buildings. So while Clinton and Obama were on opposite sides, her ad is misleading to suggest that his vote represented support for "Bush Cheney" perks for oil companies.

Fuel Efficiency Standards. Obama similarly distorts his differences with Clinton regarding federal fuel efficiency standards for cars and trucks. His ad says that "it’s Barack Obama who’s taken on the oil companies, demanding higher gas mileage standards," as though Clinton had never supported higher standards. That’s not true.

Both candidates voted for higher Corporate Average Fuel Economy standards last year, approving an energy bill that was signed into law in December. Previously, CAFE standards for passenger cars hadn’t been raised since 1985. The new law calls for an average standard of 35 miles per gallon by 2020.

Both candidates are proposing even higher requirements than that, but Clinton is aiming slightly higher than Obama. He calls for doubling the current CAFE standard averages for passenger cars and light trucks to 49 miles per gallon by 2030, from this year’s average requirement of 24.5 miles per gallon. Clinton proposes a 55 miles per gallon standard, also by 2030.

The bigger difference between the two goes back to a vote Clinton cast in 2005 against an amendment to that year’s energy bill. The amendment would have raised the average standard to 27.5 by 2016, but it failed in the Senate by a vote of 28 to 67. Obama voted for it.

Clinton spokesman Howard Wolfson told FactCheck.org that Clinton voted against the 2005 amendment because "she wanted the auto companies to come to the table with some options. Since then, she has supported a number of measures to provide incentives to auto companies to retool their plants to produce more efficient vehicles, and she has supported increasing fuel economy standards to go along with those incentives." Others have speculated that Democrats who opposed the 2005 proposal did so rather than incur the political disfavor of the auto industry and the United Auto Workers union by supporting something that wasn’t likely to become law. A similar measure had already been voted down by the House, then still controlled by Republicans. 

Price Inflation  
 

Obama’s ad greatly exaggerates the rise in fuel prices. It says that "across Pennsylvania" families are struggling with "gas prices close to four dollars a gallon."

Actually, in Pennsylvania the average price of a gallon of regular gasoline was $3.32 as of April 10, according to state-by-state data from the American Automobile Association. The highest price for regular that AAA recorded anywhere in the state was $3.41, at a gas station in Erie. Even premium grade gasoline was selling for a statewide average of $3.65, well short of four dollars.

Late-breaking update: The Obama campaign posted an interactive feature on its Web site April 11. It includes a statement that Clinton "voted for oil tax giveaways." An Obama spokesman says that refers to her vote in 2004 in favor of the American Jobs Creation Act, which was a broad tax measure meant to end trade sanctions against U.S. exports that had been imposed because of a World Trade Organization ruling. News accounts at the time noted that oil companies would be among those benefiting from the wide-ranging bill. An analyst for the Tax Policy Center later called it "a potpourri of new tax breaks for businesses" large and small. It further allowed individual taxpayers the temporary option of deducting state and local sales taxes. Clinton was among 25 Senate Democrats to vote for final passage, while only 14 opposed it. Obama was not then a member of the Senate.

–by Brooks Jackson, with Lori Robertson

Correction: Due to a math error, our article originally said that oil money made up two pennies for every hundred dollars of Clinton’s money and one penny for every hundred dollars of Obama’s. Our chart correctly reflected the percentages, which actually figure out to 18 pennies and 11 pennies, respectively.

Sources

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Michael Grunwald and Juliet Eilperin. "Energy Bill Raises Fears About Pollution, Fraud:Critics Point to Perks for Industry." Washington Post, 30 July 2005.

"The Best Energy Bill Corporations Could Buy: Summary of Industry Giveaways in the 2005 Energy Bill." Public Citizen, 2005.

Congressional Research Service. Oil and Gas Tax Subsidies: Current Status and Analysis. Washington: GPO, 2007.

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American Automobile Association. "Daily Fuel Gauge Report." Pennsylvania Unleaded Average, accessed 10 April 2008.