Red Lodge Clearinghouse

"We have to deal with energy prices in America," Senate Majority Whip Richard Durbin (D-Ill.) said this morning.

But increased taxes on major oil companies and a repeal of incentives -- including the Section 199 domestic manufacturing deduction -- mean the bill likely lacks the 60 votes needed to overcome near-certain GOP objections.

Several Democrats introduced the bill, S. 3044, last month amid efforts by both parties to show they are responsive to record energy prices. Nationwide average gasoline prices are currently close to $4 per gallon.

Timing of a potential floor fight and vote on cloture -- or cutting off debate -- is unclear. Senate Majority Leader Harry Reid (D-Nev.) last night sought agreement on a Tuesday cloture vote, but Minority Leader Mitch McConnell (R-Ky.) objected. Democratic aides did not provide any more information this morning about timing or potential strategy.

The windfall profits tax would not apply to profits reinvested in renewable power and advanced biofuels facilities. Revenues from the tax provisions in the bill would be steered into a new fund for alternative energy and consumer protection programs.

Other provisions include new prohibitions and penalties on gasoline "price gouging" and the so-called NOPEC measure that would authorize Justice Department antitrust lawsuits against the Organization of Petroleum Exporting Countries, or OPEC.

Futures market provision

The bill also contains language aimed at preventing excessive speculation and manipulation of futures markets.

It would require the Commodity Futures Trading Commission to raise margin requirements. Another CFTC provision would require the commission to obtain more data from regulators of overseas exchanges about trading in U.S-delivered oil contracts and ensure that they apply rules comparable to CFTC's.

The bill introduced last month also has provisions requiring the Bush administration to suspend shipments of oil to the nation's Strategic Petroleum Reserve. But Congress subsequently passed -- and President Bush signed -- a bill to halt deliveries last month.

The White House has repeatedly threatened to veto measures that raise taxes on oil producers and has similarly threatened vetoes on the NOPEC and price gouging bills.

GOP lawmakers say raising taxes on oil producers will stymie domestic oil development. "We will welcome the debate if they want to have it," said Matt Letourneau, a spokesman for Sen. Pete Domenici (R-N.M.), the top Republican on the Energy and Natural Resources Committee.

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