Senate Democrats’ efforts to impose $29 billion in taxes on oil companies as part of larger energy reform bill collapsed Thursday when they failed to break a Republican-led filibuster.
Hours later a mandate that utilities get 15% of their energy from renewable resources by 2020, apparently also was out of the bill.
Jude McCartin, spokeswoman for Sen. Jeff Bingaman, D-N.M., the provision’s lead sponsor, said time to add the renewables provision had run out now that the overall bill was headed towards a final vote, expected late Friday.
The provision had drawn opposition from Republicans who claimed it was tilted toward wind power and would hurt Southern states not suited for it.
The Senate did approve a compromise deal on raising fuel economy standards late Thursday.
Some Democrats from automaking states had balked at calls to raise Corporate Average Fuel Economy – better known as CAFE – standards to 35 miles per gallon by 2020 for cars and trucks.
A “35 by 2020” compromise was reached on Thursday, and the Senate soon passed the amendment.
But the dispute revealed the stark divisions in the Senate that have forced Democratic leaders to back down on earlier, more ambitious goals for the energy bill.
The energy tax vote was 57-36, just shy of the 60 needed to move forward. One Democrat, Louisiana’s Mary Landrieu, voted with the GOP.
Senate Majority leader Harry Reid, D-Nev., glumly conceded that the tax package, intended to finance breaks for renewable energy, wouldn’t be part of the overall bill.
“I am disappointed that we weren’t able to get the tax plan . . . but it is over with,” he told reporters Thursday afternoon. He angrily accused the GOP of obstruction and doing the bidding of big oil.
Energy Taxes Dead, For Now
Reid said he may try to revive the taxes later this year by attaching them to other legislation.
“Dead is relative,” he said. “There are ways of bringing it back.”
Republicans countered that Reid was trying to ram through major, multi-billion policy bills with little or no debate.
“The tax bill came out of committee on Tuesday,” said Don Stewart, spokesman for Senate Minority leader Mitch McConnell, R-Ky. “It was on the floor for all of 45 minutes before Reid moved to invoke cloture” and cut off debate.
The failure to invoke cloture – a procedural move that lets the Senate bring a bill up for a final vote – represented a major blow for the Democrats’ efforts to rewrite the nation’s energy policy.
The taxes were included as part of a $32 billion tax-incentive package for renewable fuels. It would have expanded breaks for wind, geothermal and other renewable resources as well as boost technology to capture carbon emissions.
Under “pay-as-you-go” rules set by the Democratic majority, the tax breaks required offsets elsewhere in the budget. Democrats opted to hike taxes on Big Oil, arguing they were so profitable they could and should absorb the costs.
“Take a small amount of the profits from big oil companies and put it into alternative energy,” said Sen. Chuck Schumer, D-N.Y. “They’re not going to spend it (so) we’re going to make sure it gets done by other companies.”
Sen. Jon Kyl, R-Ariz., countered the hikes would only get passed on to consumers who already were dealing with soaring gas prices.
“Instead of reducing gasoline prices, this bill is just going to add to the cost” at the pump, Kyl said.
Business groups like the National Association of Manufacturers urged the Senate to kill the tax.
“Instead of seeking to ensure an adequate and affordable energy supply for all Americans, the amendment seeks to punish oil and gas companies and their employees,” wrote Jay Timmons, NAM’s senior vice president for policy, in a letter to senators.
While the energy tax unraveled, the Senate drove through a deal to lift fuel economy standards.
Sens. Dianne Feinstein, D-Calif., Ted Stevens, R-Alaska, and Trent Lott, R-Miss., introduced an amendment that would raise CAFE standards to 35 miles per gallon by 2020 but drop the energy bill’s additional 4% annual automatic rise after that.
The Senate quickly approved the amendment without a roll call vote.
Earlier efforts to raise CAFE to 35 by 2020 with an automatic ratchet hit fierce opposition from Michigan senators Carl Levin and Debbie Stabenow, both Democrats. They said it would hit the auto industry too hard. They proposed limiting the CAFE hike to 36 mpg for cars and 30 for light trucks by 2020.
Automakers currently must meet an average of 27.5 miles per gallon for cars and 22.2 for SUVs and light trucks. The standard was last raised in 1989.
By Sean Higgins
21 June 2007
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