Republicans continue to side with Big Oil, defeat Senate proposal to tax windfall profits
11 Jun 2008
As oil prices rise to record levels, and beyond, pushing ordinary people further into misery, one segment of the world economy is quite happy. They are the large oil companies like Exxon and Chevron, collectively and critically called Big Oil. Now, Big Oil has successfully lobbied US lawmakers to defeat a proposal to tax its windfall profits and withdraw generous tax breaks.
Senate Republicans on Tuesday blocked the Democrat-sponsored proposal to impose a 25 per cent tax on any "unreasonable" profits of the five largest American oil companies - Exxon Mobil Corp., Chevron Corp. and ConocoPhilips and Dutch-based Royal Dutch Shell plc and British-based BP plc - which together made about $36 billion during the first three months of the year. The defeated plan would also have rescinded tax breaks expected to save the firms $17 billion over the next 10 years.
The vote was largely partisan, with each party sticking to long-held positions while striving to connect with frustrated consumers in an election year. Gasoline prices rose another 2 cents Tuesday to a nationwide average of $4.04 a gallon for regular, but there appeared to be little prospect of imminent action by Congress or the Bush administration, which rejected Democrat arguments that a successful passage of the proposal would cool consumer anger.
The 51-43 Senate vote fell nine short of the 60 required to proceed to debate on the Democrat-sponsored energy measure. Only six Republicans voted against the general party line. If passed, the bill would have used the revenue from increased taxes and reduced tax breaks to create an Energy Independence and Security Trust Fund, charged with reducing US dependence on foreign and "unsustainable" energy sources and reducing the risks of global warming.
The bill also would have instructed the Justice Department to pursue members of OPEC for alleged price fixing and required oil traders to put up more cash on futures exchanges to address speculation, which many observers believe is contributing to the unprecedented run-up in world crude oil prices.
Opposing the proposal, which they dubbed the ''no energy bill'', Senate Republicans said that it would do little to lower gasoline prices and could have the opposite effect by placing an additional tax burden on oil companies.
They said the nation could combat high fuel prices more effectively by increasing domestic oil supplies by permitting new exploration in the Arctic National Wildlife Refuge and in waters on the Outer Continental Shelf. Most congressional Democrats oppose drilling in those areas. Republicans are expected to make their case to a House panel today.
