From the Los Angeles Times
GOP Offers Consumer Fuel-Relief Package
It includes a $100 rebate, but its Arctic drilling component will probably doom it. Democrats' proposals are expected to fare no better.
By Maura Reynolds
Times Staff Writer
April 28, 2006
WASHINGTON — Fearing public ire over rising gasoline prices, Republicans on Thursday unveiled a series of proposals aimed at giving consumers some relief, including a $100 rebate.
Democrats derided the GOP plan, and its political chances appeared weak.
The Democrats said that although the package incorporated some ideas they already had introduced, it contained a provision that almost assuredly would torpedo its passage: opening the Arctic National Wildlife Refuge to oil and gas drilling, a measure that repeatedly has stalled in Congress.
"Joining a rebate for consumers with [the drilling proposal] is not, I believe, a sincere effort," said Sen. Debbie Stabenow (D-Mich.).
Emotion over fuel costs ran high on Capitol Hill, illustrated by a five-hour filibuster staged by Sen. Ron Wyden (D-Ore.). He refused to leave the Senate floor in an effort — ultimately unsuccessful — to press for a vote on forcing oil companies to pay more to the government for the right to drill for oil on public land. Some of that drilling is exempt from payments.
"Government subsidies may be needed when the price is low, when we have to simulate production," Wyden said. But such relief is uncalled for "at a time when prices are soaring to record-high levels."
By the end of the day, the two parties essentially played to a draw — neither the rebate idea nor Democratic proposals, which include a moratorium on federal gasoline taxes, appeared to have much chance of becoming law.
But the theatrics made clear that each party wanted to demonstrate its sensitivity to rising prices — and wanted to direct public anger toward the opposing camp.
At an outdoor news conference with the Capitol dome as a backdrop, Republicans blamed the price surge on Democrats, who they said had blocked measures to increase oil production, such as drilling in the Arctic.
"Those who stand up and criticize … and suggest that somehow or another that the blame [for gasoline costs] is upon those of us who had been pushing for increased supply of energy in this country, I think they need to look in the mirror," said Sen. Rick Santorum (R-Pa.), chairman of a GOP task force that drew up the party's proposals. "Democrats are the ones who have simply blocked every attempt for us to build transmission networks — whether it's electric transmission networks, or whether it's oil and gas networks, or whether it's energy generating, or whether it's oil and gas production."
Democrats blamed the high prices on Republicans, who they accused of being too cozy with large oil companies and too eager to pass out tax breaks to them. They dismissed the rebate as a meaningless gesture, arguing it would wind up in oil company coffers because consumers would use it to buy gasoline.
"It is disappointing that neither skyrocketing gas prices nor obscene oil company profits can break the bond between Bush Republicans and Big Oil," said Senate Minority Leader Harry Reid (D-Nev.).
The back-and-forth in Washington came as the world's largest publicly traded oil company, Exxon Mobil, reported first-quarter profits of $8.4 billion, up 7% from the first three months of 2005.
The increase fell short of Wall Street expectations. But the report accelerated the criticism of oil companies from politicians.
"Quarter after quarter, oil companies post unheard-of profits at the expense of farms, businesses and family budgets," said Sen. Maria Cantwell (D-Wash.).
"We need to figure out what's behind these prices and work together to put stronger consumer protections on the books."
The high gasoline prices — above $3 a gallon in some regions of the country — result from a confluence of forces that have constricted supply. Experts say few measures under discussion on Capitol Hill would have much effect.
"Unfortunately, there's nothing, really, that can be done that's going to affect energy prices or gasoline prices in the very short run," Federal Reserve Chairman Ben S. Bernanke told lawmakers at a hearing Thursday.
But with elections coming in November, lawmakers appeared undeterred.
"There is no silver bullet," said Senate Majority Leader Bill Frist (R-Tenn.). "There is nothing, nothing we can do that can compensate for the fact that today we're 60% dependent on foreign sources of oil. But we can put forth a bold agenda."
Under the Republican plan, a $100 rebate would be sent to taxpayers making less than $125,000 a year.
Stabenow has proposed a $500 rebate, which she said would cover the average cost of higher gas prices for most families.
The GOP package also called for:
• A summer suspension of the 18.4-cent-per-gallon federal retail gasoline tax, to be paid for by ending some oil industry tax breaks. Sen. Robert Menendez (D-N.J.) previously proposed a 60-day gas-tax holiday.
• New authority for the Federal Trade Commission to investigate possible price gouging. Democrats accused Republicans of undermining their own proposal, however, by limiting the measure to retail pricing and excluding wholesale distributors from scrutiny.
• Increased incentives for the development and purchase of hybrid vehicles.
• New authority for the Department of Transportation to increase fuel efficiency standards for automobiles.
Many Republicans, including President Bush, previously had opposed raising those fuel efficiency requirements, known as CAFE standards. But on Thursday, Bush endorsed the idea.
At a gas station in Biloxi, Miss., Bush said he would "use it wisely if Congress would give me that authority."
Bush earlier this week announced steps that underscored his concern about gasoline prices, including a suspension of government oil purchases to refill the Strategic Petroleum Reserve. But, as with the various congressional proposals, experts said the White House moves would have little impact on the rising fuel costs.
During his mini-filibuster, Wyden said existing royalty-payment breaks for oil companies had cost the federal government at least $20 billion in lost revenue.
"Oil companies are supposed to pay royalties to the federal government when they extract oil from federal lands. But in order to stimulate production of oil in our country, the federal government, over the last decade, has been discounting these royalty fees," Wyden said. "So, on top of the oil companies' record profits, record tax breaks and record prices consumers are paying at the pump, there are now record amounts of royalty relief granted to the oil companies as well."
Wyden's position earned quick support from at least one Republican, Sen. Jon Kyl of Arizona. He offered to cosponsor Wyden's measure, which would suspend the subsidies whenever the price of oil topped $55 a barrel.
Still, votes on this and other proposals could be stymied by Senate rules. They have been offered as amendments to an emergency spending bill for the military operations in Iraq and Afghanistan and for post-Hurricane Katrina relief efforts. Parliamentary procedures for the legislation may block action on the energy-related measures.
Times staff writer Elizabeth Douglass in Los Angeles contributed to this report.