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Windfall tax on oil profits stifled

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WASHINGTON — Saved by Senate Republicans, big oil companies dodged an attempt Tuesday to slap them with a windfall profits tax and take away billions of dollars in tax breaks in response to the record gasoline prices that have the nation fuming.

GOP senators shoved aside the Democratic proposal, arguing that punishing Big Oil won't do a thing to lower the $4-a-gallon-price of gasoline. High prices at the pump are threatening everything from summer vacations to Meals on Wheels deliveries to the elderly.

The Democratic energy package would have imposed a 25 percent tax on any "unreasonable" profits of the five largest U.S. oil companies, which together made $36-billion during the first three months of the year. It 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. Sen. Mary Landrieu of Louisiana, a state tied closely to the oil industry, was the only Democrat opposing the bill.

"We are hurting as a country. We're hurting individually as Americans … and the other side says, 'Do nothing. Don't even debate the issue,' " complained Sen. Charles Schumer, D-N.Y.

GOP opponents argued that little was to be gained by imposing new taxes on the five U.S. oil giants: Exxon Mobil Corp., Chevron Corp., Shell Oil Co., BP America Inc. and ConocoPhilips 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.

"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.

Neither Republican presidential candidate John McCain nor his Democratic rival, Barack Obama, were in Washington to vote on the energy issue.

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 GOP filibuster — a longshot at best — and the House acted, President Bush has made clear he would veto it.

Windfall tax on oil profits stifled 06/10/08 [Last modified: Monday, November 7, 2011 4:33pm]
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