- The Washington Times - Wednesday, May 3, 2006

Republicans on Capitol Hill are deeply divided over how to respond to escalating gasoline prices, with some proposing new taxes on oil companies, some calling for investigations and others willing to ride out the storm on the forces of the free market.

No Republican plan has gathered as much attention as the multipronged proposal made last week by Senate Majority Leader Bill Frist and other Senate Republicans that would give increasingly frustrated drivers $100 rebates, use federal tax law to encourage development of refineries and hybrid vehicles and allow the president to tighten fuel-economy rules.

“The really insulting part of the whole proposal was that somebody would offer $100 to every American family over this,” House Majority Leader John A. Boehner said yesterday. “This is not going to solve the problem.”

Asked whether there was some tension with his Senate counterpart, the Ohio Republican replied, “No, I just think that trying to satisfy voters with a $100 voucher is insulting. I didn’t know it was Frist. It doesn’t make any difference who it is. I’m not referring to him. I don’t like the proposal, as you can probably tell.”

The proposal also ran afoul of Republican allies in the corporate world, who said a provision on how to count petroleum inventories for tax purposes would essentially amount to a multibillion-dollar tax increase on oil companies and others who maintain large reserves.

Mr. Frist was sticking to his $100 rebate, referring the proposal dealing with inventories to the Senate Budget Committee “so the pluses and minuses of the provision can become well-known.” It is widely expected among Republicans that the provision will die there.

“In the meantime, I’ll continue working to find a way to bring our proposals to the Senate floor for a vote,” said Mr. Frist, of Tennessee. “We’ve got to help those who are feeling pain at the pump as quickly as possible.”

By yesterday, other parts of the Republican bill were taking criticism from both sides of the aisle.

“The $100 rebate was dead before it was offered. It was ridiculous,” Minority Leader Harry Reid of Nevada told reporters yesterday. “I don’t know of one favorable editorial comment about this $100 rebate.”

Sen. Rick Santorum, Pennsylvania Republican, yesterday defended the package and the rebate.

“It’s an eight-point plan that addresses a variety of different things, everything from production and increasing our supply to reducing demand, as well as providing some very short-term relief in terms of giving some resources to consumers in the form of a rebate,” he said.

“I know a lot of people have focused in on the rebate and have suggested that that doesn’t do anything to solve the crisis,” he added. “Well, it wasn’t intended to do anything to increase supply or reduce demand. It was a way of trying to provide some help, some temporary help at a time of gas price spikes this summer driving season.”

Meanwhile, Democrats appear to be in political high cotton, blaming Republicans for the high gas prices and chronicling their every disagreement.

Senate Minority Whip Richard J. Durbin of Illinois and other Democrats plan to join with farmers and small-business owners today at Eastern Market to highlight the effect high gas prices has on businesses that rely heavily on transportation.

“Americans across the country are struggling under sky-high gas prices, and not just at the gas station,” the lawmakers said in a statement announcing today’s press conference. “The ripple effect of high gas prices has spread across the economy, and farmers and small-business owners are feeling the pain of the Bush Republican energy policies that put oil companies before the American people.”

House Speaker J. Dennis Hastert blamed Democrats for blocking Republican initiatives such as drilling for oil in Alaska’s Arctic National Wildlife Refuge. He also said such press conferences do little to help the matter.

“Our friends on the other side of the aisle are blowing a lot of hot air,” the Illinois Republican said. “Obviously, you can’t burn hot air, so we have a problem there.”



Click to Read More

Click to Hide