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US Senate Republicans block Democrats' attempt to impose windfall profits tax on oil firms

US Senate Republicans block Democrats' attempt to impose windfall profits tax on oil firms

Senate Republicans on Tuesday blocked a proposal that would have taxed windfall profits of the largest oil companies and allowed the government to take OPEC members to court, handing Democrats fresh ammunition in an election year in which voters are struggling with surging gasoline prices.
The Democratic energy package would have imposed a tax on any "unreasonable" profits of the five largest U.S. oil companies and given the federal government more power to address oil market speculation that the bill's supporters argue has added to the crude oil price surge. Republicans, however, have said the bill would do nothing to ease soaring gasoline prices in the U.S..
The Democrats failed, 51-43, to get the 60 votes needed to overcome a Republican filibuster _ a procedural tactic to delay debate on a bill _ and bring the energy package up for consideration.
The defeat affords Democrats another opportunity, going into the November congressional and presidential elections, to try to cast Republicans as siding with the oil companies at a time of record gasoline prices.
"Americans are furious about what's going on," declared Sen. Byron Dorgan, a Democrat, and want Congress to do something about oil company profits and "an orgy of speculation" on oil markets.
Republicans argued the Democratic proposal focusing on new oil industry taxes is not the answer to U.S. energy problems.
"The American people are clamoring for relief at the pump," said Sen. Pete Domenici, a Republican, but if taxes are increased on the oil companies "they will get exactly what they don't want. The bill will raise taxes, increase imports."
The measure would also have allowed authorized the U.S. Justice Department to bring charges of price fixing against Organization of Petroleum Exporting Countries member states _ a development that could have seriously complicated U.S. foreign policy efforts, particularly in the Middle East.
Separately, Democrats also failed to get Republican support for a proposal to extend tax breaks for wind, solar and other alternative energy development, and for the promotion of energy efficiency and conservation. The tax breaks have either expired or are scheduled to end this year.
The tax provisions were included in a broader $50 billion tax measure blocked by a GOP filibuster threat. A vote to take up the measure was 50-44, short of the 60 votes needed.
The windfall profits bill would have imposed a 25 percent tax on profits over what would be determined "reasonable" when compared to profits several years ago. The oil companies could have avoided the tax if they invested the money in alternative energy projects or refinery expansion. It also would have rescinded oil company tax breaks _ worth $17 billion over the next 10 years _ with the revenue to be used for tax incentives to producers of wind, solar and other alternative energy sources as well as for energy conservation.
The legislation also would:
_Require traders to put up more collateral in the energy futures markets and open the way for federal regulation of traders who are based in the United States but use foreign trading platforms. The measures are designed to reduce market speculation.
_Make oil and gas price gouging a federal crime, with stiff penalties of up to $5 million during a presidentially declared energy emergency.
Republican leader Mitch McConnell of Kentucky has acknowledged that Americans are hurting from the high energy costs but strongly opposes the Democrats' response and has ridiculed those who "think we can tax our way out of this problem."
"Republicans by and large believe that the solution to this problem, in part, is to increase domestic production," McConnell said.
A Republican energy plan, rejected by the Senate last month, calls for opening a coastal strip of the Arctic National Wildlife Refuge in the state of Alaska to oil development and to allow states to opt out of the national moratorium that has been in effect for a quarter century against oil and gas drilling in more than 80 percent of U.S. coastal waters.


Updated : 2021-01-18 18:44 GMT+08:00