GOP blocks Dems' plan to crack down on oil companies

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 and argued that punishing Big Oil won't do a thing to lower the $4-a-gallon price of gasoline that is sending economic waves across the country. 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.

"Americans are furious about what's going on," said Sen. Byron Dorgan, D-N.D. He said they want Congress to do something about oil-company profits and the "orgy of speculation" on oil markets.

But Republican leaders said the Democrats' plan would do harm rather than good — and they kept the legislation from being brought up for debate and amendments.

House Republicans are also pushing two bills that would allow drilling in the Arctic National Wildlife Refuge and two that call for drilling in coastal waters. Supporters are expected to make their case to a House panel Wednesday.

The GOP faces an uphill battle because the Senate rejected a measure last month to allow drilling in areas now off-limits to exploration. And Sen. John McCain of Arizona, the presumptive GOP presidential nominee, opposes drilling in the wildlife refuge.

"Every other country in the world looks at their natural resources and sees them as an economic asset," Rep. Roy Blunt, R-Mo., said at a news conference on Capitol Hill. "Democrats in Washington look at our natural resources and see them as an environmental hazard. That's a mistake."

House Democrats argue that the GOP's call for increased production is a losing plan.

"More drilling," said House Majority Leader Steny Hoyer, D-Md. "That is the Johnny-one-note policy of the Republican Party, of the president, of this Republican leadership in the House."

Hoyer said drilling has increased "dramatically" and that the oil industry is "sitting on 10,000 permits that they aren't using," while gas prices continue to climb.

In addition to the proposed windfall-profits tax, the Democrats' bill that was rejected Tuesday would have rescinded tax breaks that are expected to save the oil companies $17 billion over the next 10 years.

The money would have been used to provide tax incentives for producers of wind, solar and other alternative energy sources as well as for energy conservation.

Information from Gannett News Service is included in this report.