Senate Republicans Block Windfall Taxes on Big Oil
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WASHINGTON — The outcome of the vote was hardly a surprise. Democrats knew they probably couldn’t overcome a Republican filibuster on a plan to tax billions of dollars in “windfall” profits by the country’s biggest oil companies.
Still plenty of anger was on display. After all, the bill was meant to respond to what has the nation fuming — gasoline costing $4 a gallon and going up.
Republican leaders were refusing to even debate a proposal to address “the biggest problem confronting the American people,” Senator McCaskill, Democrat of Missouri, said.
“That takes nerve,” she said.
Democratic leaders fell nine votes short of the 60 needed to take up the energy package. Its centerpiece was a 25% tax on Big Oil’s windfall profits and the stripping away of tax breaks the oil companies have enjoyed. The tax could be avoided if the money were put into alternative fuel projects.
“The American people must be wondering what in God’s name is going on in their nation’s capital,” Senator Sanders, an independent from Vermont, said. Expensive gasoline is sending economic waves across the country, threatening everything from summer vacations to Meals on Wheels deliveries to the elderly.
The Republican senators argued that punishing big oil companies won’t do a thing to lower prices at the pump. They also said it could curtail domestic oil production and maybe even cause prices to go up, not down.
On world markets, oil prices retreated a bit yesterday but remained above $131 a barrel. Gasoline prices edged even higher to a nationwide record average of $4.04 a gallon.
The proposed windfall tax would have been triggered on any “unreasonable” profits of the five largest American oil companies, which together made $36 billion during the first three months of the year. The bill also would have given the government more power to address oil market speculation, opened the way for antitrust actions against countries belonging to the OPEC oil cartel, and made energy price gouging a federal crime.
Democratic leaders needed 60 votes and they got only 51 senators’ support, including seven Republicans who bucked their party leaders. Senator Landrieu of Louisiana, a state tied closely to the oil industry, was the only Democrat opposing the bill. The Senate majority leader, Harry Reid, voted in favor of the measure, but for procedural reasons changed his vote to “no” so that he could bring it up again.
“Americans are furious about what’s going on,” Senator Dorgan, a Democrat of North Dakota, said. He said they want Congress to do something about oil company profits and the “orgy of speculation” on oil markets.
But Republican leaders said little was to be gained by imposing new taxes on the five American oil giants: Exxon Mobil Corp., Chevron Corp., Shell Oil Co., BP America Inc., and ConocoPhillips Co. While these companies may be huge, they don’t set world oil prices and raising their taxes would discourage domestic oil production, the Republicans said of the Democrats’ plan
“In the middle of what some are calling the biggest energy shock in a generation … they proposed as a solution, of all things, a windfall profits tax,” Republican leader Mitch McConnell of Kentucky chided the Democrats. He called their proposal “a gimmick” that would not lower gasoline prices and only hold back domestic oil production.
“The American people are clamoring for relief at the pump,” Senator Domenici, a Republican of New Mexico, said, but “they will get exactly what they don’t want” under the Democrats’ plan — higher prices and an increase in oil imports.
Shortly after the oil tax vote, Republicans blocked a second proposal that would extend tax breaks that have either expired or are scheduled to end this year for wind, solar, and other alternative energy development, and for the promotion of energy efficiency and conservation. Again Democrats couldn’t get the 60 votes to overcome a GOP filibuster.
Neither Republican Senator McCain nor his Democratic rival, Senator Obama, were in Washington to cast votes on the energy issue yesterday.
Mr. Obama, in a statement, said Republicans had “turned a blind eye to the plight of America’s working families” by refusing to take up the energy legislation. Mr. Obama has supported additional taxes on the oil companies. Mr. McCain is opposed to such taxes and has proposed across-the-aboard tax reductions for industry to help revive the economy.
Election-year politics hung over the debate. Democrats know their energy package has no chance of becoming law. Even it were to overcome a Senate Republican filibuster — a longshot at best — and the House acted, Mr. Bush has made clear he would veto it.