Windfall profits tax on Big Oil halted in Senate
Election-year posturing over skyrocketing gasoline prices erupted Tuesday in Congress, with Senate Republicans blocking a new tax on oil companies they say will hit drivers at the pump, and Democrats accusing them of abandoning struggling Americans.
“This was politics at its worst,” said Sen. Claire McCaskill, Missouri Democrat. “This was a refusal to debate the biggest problem facing the American people - that takes nerve.
“If the American people’s heads aren’t ready to blow off in anger,” added Mrs. McCaskill, “they aren’t paying attention.”
Republican Sen. Kay Bailey Hutchison of Texas countered that the Democrats’ plan “does not produce one ounce of energy” and that “it’s a pathetic attempt to even call it an energy plan.”
Senate Democrats failed on a vote to 51-43 to get the 60 needed to overcome a Republican filibuster on a proposal to increase the development of renewable energy sources and a proposed “windfall profits” tax on big oil companies.
Six Republicans voted for the measure, while only one Democrat, Sen. Mary L. Landrieu of Louisiana, supported the measure. Senate Majority Leader Harry Reid, Nevada Democrat, switched his vote to “no” on a procedural move that will allow Democrats to reintroduce the measure in the future.
The bill would have imposed a 25 percent “windfall profits” tax on large oil companies over profits determined as “reasonable” when compared with previous years. The oil companies could have avoided the tax if they invested the money in alternative energy projects or refinery expansion.
It also would have rescinded oil company tax breaks - worth $17 billion over the next 10 years - with the revenue to be used for tax incentives to producers of wind, solar and other alternative energy sources, and for energy conservation.
The legislation included provisions designed to curb oil speculation - which many experts say is a big cause for the recent gas price increases - by requiring traders to put up more collateral in the energy futures markets, and for federal regulation of traders who are based in the United States but use foreign trade platforms.
The plan also called for making oil and gas price gouging a federal crime, and would have given the Justice Department authority to file price fixing charges against countries that belong to the Organization of Petroleum Exporting Countries (OPEC) oil cartel.
Republicans also blocked a second Democratic energy proposal that called for extending tax breaks set to expire at the end of the year for alternative energy sources such as wind and solar, and for the promotion of energy efficiency and conservation.
The measure died on a procedural vote of 50-44, or 10 votes shy of what was needed to proceed toward a final vote.
Republicans say the best and quickest way to slash gas prices is to increase the production of U.S. oil, and are pushing to drill in the Arctic National Wildlife Refuge (ANWR) in Alaska and off the Florida coast.
“Democrats will claim that this bill will bring gas prices down, but in doing so they’re counting on Americans to forget a basic law of economics - that raising taxes on those that produce something leads to an increase in the price of products they sell,” said Senate Minority Leader Mitch McConnell, Kentucky Republican.
But Sen. Charles E. Schumer, New York Democrat, said opening ANWR for drilling would reduce gas prices only a few cents, and not before 2018.
“Drilling in ANWR isn’t a plan, it’s a talking point,” he said. “The bottom line is we have had a White House and a Republican minority that has taken zero proactive steps to reduce our dependence on foreign oil for seven years.”
Meanwhile Tuesday in the House, Republicans renewed calls for the chamber’s Democratic majority to bring to a vote an 11-month-old Republican bill that calls for opening new domestic oil refineries, increasing domestic drilling for oil and natural gas, and encouraging the use of nuclear power and other alternative energy sources.