Energy Bill Compromise Cuts Key Democratic Proposals

Democrats in the U.S. Senate have dropped efforts to finance consumer credits and impose new taxes on the biggest oil companies, unable by one vote to overcome a Republican filibuster last week. 

Republicans had signaled they would force the Democrats to find 60 votes on the oil taxes. President Bush said that $13.5 billion in taxes on the five largest oil companies over 10 years would guarantee a veto. According to a Democratic analysis, $13.5 billion over 10 years amounted to 1.1 percent of the net profits that the five largest oil companies would be expected to earn at today’s oil prices.

Sen. Mary Landrieu, D-La., whose state’s economy is dominated by oil and energy interests, was the only Democrat to break ranks during the 59-40 vote that failed to overcome the GOP filibuster.

Continued -The measure was finally approved 86-8 last week. Nine Republicans supported the tax measures. Sen. Carl Levin, D-Mich., voted for the bill but said he regretted dropping the tax provisions “since many of these are important to continued development of biofuel and to development and commercialization of many advanced and renewable technologies.”

Michigan Sen. Debbie Stabenow was the only Democrat to vote no. Stabenow said she opposed the revised bill because it dropped tax incentives that would have helped Michigan car makers meet the fuel economy mandate.

“I could not support a new mandate on our auto industry without including the critical incentives and funding support needed to help them be successful and keep our jobs in America,” Stabenow said. “Republicans refused to eliminate taxpayer subsidies for oil companies; stripped out tax incentives, including over $1 billion in consumer credits for the purchase of advanced technology vehicles; eliminated the clean-energy requirement; and did not fully implement the loan program.”

Almost two weeks ago, congressional leaders reached a compromise on energy legislation that included tax incentives, increased use of clean energy by utilities and a major increase in vehicle mileage standards, called CAFE. In addition, a loan program was authorized for the auto industry to retool their plants and create jobs in the United States to meet the aggressive CAFE mandates. The bill also included an incentive package to end taxpayer-funded subsidies for oil companies and redirect public support to the production of alternative fuels to eliminate dependence on foreign oil.

The bill will go back to the House, where it is expected to be voted on this week. The White House issued a statement saying President Bush will sign the legislation if it reaches his desk.