Dems Target Attention On Strategic Reserve, Tax Incentives

Thu. May 8, 2008


Democrats will try to make progress before Memorial Day on two of the more politically feasible ideas to address record gas and oil prices, including suspending purchases of oil for the Strategic Petroleum Reserve.

Senate Democrats have taken out of a larger energy package unveiled Wednesday a plan to suspend additions to the reserve as long as crude oil remains above $75 a barrel, which is well below Wednesday's $123 per barrel price.

A Senate Democratic leadership aide said that was done to give the reserve proposal a better shot at passage.

Before the Senate wraps up work on the pending flood insurance bill, they will Monday vote on that reserve proposal -- which has the support of all 51 Senate Democrats -- as well as a broader Republican package that includes suspending additions to the reserve for six months.

Majority Leader Reid said 60 votes will be required for each to pass. The GOP plan is expected to fall short of that threshold since it calls for drilling in the Arctic National Wildlife Refuge and along the Atlantic and Pacific coasts, ideas Democrats have blocked in recent years.

Reid's spokesman said Democrats plan to bring to the floor their broader energy plan "in the coming weeks."

That plan includes other ideas that have failed to become law in the past, including the repeal of oil and gas tax incentives, making price-gouging a federal crime, allowing the United States to sue the Organization of Petroleum Exporting Countries for manipulating prices and reinstating a windfall profits tax on oil companies.

Sen. Byron Dorgan, D-N.D., said he expects bipartisan support when he offers the Democrats' petroleum reserve plan today in the Appropriations Committee as an amendment to the Iraq supplemental spending bill.

Democrats this month are likely to try to move through the House a plan to suspend the filling the reserve separately from a broader energy package incorporating many of the ideas Senate Democrats are pursuing, a House Democratic leadership aide said.

The Bush administration is continuing with its plan to double the reserve's capacity. President Bush argued last month that not enough oil is going into the reserve to affect gas and oil prices and that its capacity must be increased in case of a severe supply disruption.

Yet 94 House Democrats -- including House Speaker Pelosi and Majority Leader Hoyer --sent a letter Wednesday to Bush saying that suspending deliveries to the reserve "is something that can be done right now to immediately lower prices for American families."

In a news conference, Pelosi called it an "easy, short-term initiative." Hoyer added, "Our experts tell us it would immediately bring the price down."

House Global Warming Chairman Edward Markey and Rep. Peter Welch, D-Vt., have offered a bill that would stop deliveries to the reserve as long as crude oil remains above $50 a barrel. Markey said it is the "first and immediate thing the president can do to show he's serious" about gas and oil prices.

Another potentially viable plan would extend expiring renewable energy tax incentives for one year.

House Ways and Means Chairman Charles Rangel said a one-year tax extenders plan -- including renewable energy incentives -- will be taken up by his committee next week and should be on the floor this month.

He said the extenders will be paid for, but discussions continue about how to do that and avoid relying on contentious repeals of oil and gas incentives that have plagued efforts this Congress to extend production and investment incentives for renewable energies.

Pelosi said "maybe a different matchup will be more successful; we certainly hope so; that's the indication that we have." She added that Rangel "has been working with the Senate on a package that we think will be passable to them," indicating that Democrats will separate the one-year extension from an effort to repeal oil and gas incentives and fund longer term renewable incentive extensions.

"We may take these issues up separately and have a different set of pay-fors" for the one-year extension package, she said.

by Darren Goode

Thu. May 8, 2008