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Congress turns down new taxes on Big Oil
Lawmakers are scrambling to respond to nation's anger over high gasoline prices.
WASHINGTON -- House Republicans on Thursday refused to support billions of dollars in new taxes on oil companies as lawmakers in both parties looked for ways to soothe election-year rage over high gasoline prices.
Senate Republicans proposed a $100 fuel-cost rebate for millions of taxpayers. Democrats talked of a two-month suspension of the 18.4-cent per gallon federal gasoline tax.
Despite the jockeying for political advantage, economists and energy experts generally agreed that the government has few, if any, immediate powers to drive pump prices down from their $3-plus perch.
"Unfortunately there's nothing, really, that can be done that's going to affect energy prices or gasoline prices in the very short run," Federal Reserve chairman Ben Bernanke told a congressional hearing.
Nonetheless, lawmakers scrambled to put together legislation they hoped would show their sympathy for motorists and their willingness to stand up to big oil companies.
The GOP-run House, in a largely partisan vote, failed 190-232 to instruct its tax bill negotiators to support a Senate proposal that would have required oil companies to pay about $5 billion more in taxes. Only four Republicans voted for the proposal; nine Democrats were against it.
Senators have voted to require oil companies to pay more taxes on their inventories, rescind favorable tax treatment for exploration in difficult areas and remove tax credits for taxes paid overseas.
Despite the House vote, the proposals are "still on the table," said Sen. Charles Grassley, R-Iowa, the lead Senate negotiator.
Senate Democratic leader Harry Reid of Nevada said the tax breaks are "unnecessary and unwarranted" when oil companies are reaping billions of dollars in profits. The industry says the change would amount to a windfall profits tax.
Lawmakers' election-year anxiety deepens each time a major oil companies announces huge first-quarter profits. Exxon Mobil Corp. said Thursday it made more than $8 billion during from January through March -- the fifth largest quarterly profit ever for a public company.
"While Exxon Mobil executives are popping champagne and celebrating their record profits, American families are popping antacids under the strain of searing gas prices," said Sen. Bob Menendez, D-N.J.,
In Dallas, Exxon spokesman Kenneth Cohen said the company was bracing for more trips to Washington to explain its earnings. "I just hope for the opportunity to communicate the fundamentals of our business," he said.
Menendez proposed a 60-day suspension of the 18.4-cent gasoline tax and 24-cent-a-gallon diesel tax. Revenue lost to the government, as much as $6 billion, would be made up by removing some oil company tax breaks, he said.
Senate Republicans release a 10-point response to high fuel costs that included giving millions of taxpayers $100 checks. They also proposed a federal law against price gouging.
The rebate check would go out at the end of August to taxpayers with adjusted gross incomes of no more than $145,950 for single filers and $218,950 for married couples, according to the Senate Finance Committee.
"It's a bold package to help consumers ... to help ease the pain," said Majority Leader Bill Frist, R-Tenn. He promised a vote on the measures by Tuesday.
"We are going to ease the burden," said Sen. Pete Domenici, R-N.M., chairman of the Senate Energy and Natural Resources Committee.
Democrats criticized the GOP proposal because it linked attempts at short-term relief with oil drilling in an Alaskan wildlife refuge; the exploration idea has divided the Senate for decades.
"It's designed to protect Big Oil while mistakenly believing that drilling in the Arctic National Wildlife Refuge will solve America's energy problems," said Reid's spokesman, Jim Manley.
The GOP plan also would:
* repeal some recent tax breaks for oil companies.
* ease permits for refinery expansion.
* provide tax breaks for development of gas-electric hybrid cars.
* give the Transportation Department the power to increase auto fuel economy.
President Bush, touring the hurricane-ravaged Gulf Coast, stopped at a gas station in Biloxi, Miss., and said he welcomed any steps by Congress to give him the power to change fuel economy requirements. Lawmakers recently did that for small trucks.
Much of Senate's time was taken up by a dispute over whether to vote on a proposal by Sen. Ron Wyden, D-Ore., to require energy companies to pay a federal royalty on oil pumped from the Gulf of Mexico, if barrel prices topped $55. Some oil now is exempt from royalties, costing the government billions of dollars.
The Senate Judiciary Committee voted unanimously to allow the Justice Department to prosecute member of the Organization of Petroleum Exporting Countries for price-fixing in violation of U.S. antitrust laws.
Committee members acknowledged that the action was little more than a gesture. "We are venting our frustration," said Sen. Dick Durbin, D-Ill.