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Roll Call

Senate Agrees to Debate Energy Policy

Measure Would Repeal Tax Breaks for Big Oil

Tom Williams/CQ Roll Call
Senate Minority Leader Mitch McConnell criticized Democrats for pushing tax increases, saying the party is “out of touch” with the American people on the issue.

With gas prices continuing to rise and the November elections approaching, Senate Democrats and Republicans embraced the opportunity this week to square off on energy policy.

Democrats initially expected to fall short of the 60 votes needed to overcome a procedural hurdle, but many Republicans sided with the majority in a 92-4 vote that paves the way for debate on a Democratic measure that would repeal tax breaks for the five biggest oil companies and extend 19 renewable energy tax subsidies. Despite the about-face from Republicans, the debate will likely be contentious and attract a raft of amendments, including proposals designed to score political points.

The Senate is still unlikely to pass the bill, but both sides feel they have winning energy arguments that will resonate with voters, who are paying an average of almost $4 a gallon at the pump.

Democrats expect the debate will help them to highlight the theme that their polices favor the middle class, which they argue has gotten short shrift under the tax regime enacted during the George W. Bush administration.

“Last year, Big Oil raked in $137 billion in profits — more than ever before — but still received billions in taxpayers-funded giveaways,” Senate Majority Leader Harry Reid (D-Nev.) said on the floor Monday.

“The only real way to bring down prices at the pump is to reduce U.S. dependence on foreign oil,” Reid continued. “That will take additional responsible, domestic oil exploration and smart investments in clean energy technology.

“Repealing wasteful subsidies won’t cause oil and gas prices to rise,” Reid said. “But reducing America’s dependence on foreign oil will cause prices to fall.”

A Senate Democratic aide said: “We think we have the upper hand talking about oil subsidies. People blame oil companies for high gas prices and don’t think they should be getting the tax break.”

Republicans, who will continue to oppose the bill and may attempt to filibuster it before a vote on final passage, believe that Democratic ideas all too often involve raising taxes, which they argue will simply be passed on to consumers as even higher energy prices.

“If they had their way, gas prices would be even higher,” Senate Minority Leader Mitch McConnell (R-Ky.) said on the floor, adding that he thinks Democrats are “out of touch” with the American people on the issue.

“How does this help the American people now?” McConnell asked rhetorically. “Of course it doesn’t.”

A GOP aide said one thing that can be done is to complete the 1,700-mile Keystone XL oil pipeline. It’s expected that an amendment to approve the project will likely be proposed to the bill.

Sen. John Hoeven (R-N.D.) offered a Keystone proposal to the Senate transportation bill earlier this month, but the amendment, needing 60 votes to pass, was defeated 56-42, with 11 Democrats voting with Republicans in favor of expediting the project.

The pipeline would transport an additional 830,000 barrels of oil per day from Canada to U.S. refineries on the Gulf Coast, supporters argue.

“Why block oil from a friendly neighbor like Canada rather than importing it from the volatile Middle East?” the aide continued, adding that increased domestic production should also be in the mix.

While renewable energy development is important, the aide said, “we can’t forget about the people struggling to fill up their tanks today.”

Last week President Barack Obama, looking to blunt GOP criticism, went to Cushing, Okla., to declare his support for building the southern half of the Keystone project from Cushing to the Gulf Coast.

The northern part from Canada still needs federal approval but only after a proper review to ensure its safety, he said. A route has not yet been chosen through Nebraska after the initial path faced opposition in that state over concerns a spill would affect underground water supplies and the environment.

Congress passed a measure in December forcing the White House to make a decision on TransCanada’s permit request for the cross-border pipeline, and Obama rejected it in January on the grounds that his administration did not have enough time to review the effects.

In Monday’s vote, only one Republican — Oklahoma Sen. James Inhofe — and three Democrats voted against taking up the proposal, which was offered by Democratic Sens. Bob Menendez (N.J.) and Debbie Stabenow (Mich.). GOP support to take up the bill is a change in its position from last week, when Reid scheduled the vote and most of the chamber’s 47 Republicans were expected to mount a filibuster against the motion to proceed to the bill.

Reid also had scheduled a vote on whether to take up a postal reform bill. But Democrats are expected to vote against the postal bill to continue the energy debate and take it up another time. That vote is likely to come as early as today.

During a conference call ahead of the vote Monday, Menendez said his bill would save $24 billion over 10 years, of which $11 billion would be used to extend clean energy tax breaks and the remaining amount would be used to reduce the deficit.

The Senate last voted on a similar Democratic measure in 2011, when it received only 52 of the 60 votes needed to pass the proposal. Three Democrats opposed the bill, while two Republicans voted in favor of the measure.

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