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Senate Republicans Propose Drilling of Arctic, Gas Rebate

By Carl Hulse


Senate Republicans on Thursday tried to get the upper hand in the escalating political battle over high gasoline prices by proposing a $100 rebate for taxpayers and by suggesting that they might increase taxes on oil-industry profits.

Their proposal also calls for opening the Arctic National Wildlife Refuge to oil production, a provision sure to draw opposition from many Democrats and even some Republicans.

“The American consumer is the one that needs the break today, and we need to be taking steps to make sure that they aren’t emptying their wallet every time they fill their tank,” said Sen. John Thune, R-S.D., as the leadership unveiled its legislative response to an issue quickly taking over the congressional agenda.

The Republican plan includes a provision that could levy a significant tax on oil company profits, a provision that President Bush promised to veto when a similar version appeared in another Senate bill last year.

Speaking at a BP service station in Biloxi, Miss., on Thursday, Bush endorsed one aspect of the Senate proposal by encouraging Congress to give him the same authority to set standards for gasoline mileage of cars as he has over “light trucks,” or SUVs, pick-ups and minivans.

Greeting surprised customers, Bush, confronting an issue that is adding to his political woes, compared rising gas prices to a new tax and promised to curb price gouging, boost refinery capacity and support alternative fuels. “One of the things we’ve got to do is make these trucks run on ethanol and batteries that won’t require gasoline,” he said. “That’s what the future is going to be.”

Democrats quickly dismissed the new Republican approach as a back-door attempt to overcome deep-seated opposition to drilling in the Arctic National Wildlife Refuge.

“Americans are struggling to pay the rising cost of gas, and they are not interested in handouts to help oil companies make more money by letting them drill in wildlife refuges,” said Sen. Harry Reid of Nevada, the Democratic leader.

Democrats pressed their own ideas, including a proposal by Sen. Bob Menendez, D-N.J., to suspend the 18.4-cent federal tax on gasoline and 24-cent-a-gallon diesel tax for 60 days. “It is direct relief at the pump,” said Menendez. Some Republicans, including Thune, have also endorsed a suspension of the tax.

Sen. Ron Wyden, D-Ore., tied up the Senate for almost five hours Thursday in an effort to force a vote on his proposal to prohibit oil companies from escaping federal royalties for drilling on public lands when oil prices exceed $55 per barrel. But Republicans blocked that effort.

“You cannot get a vote up or down in the United States Senate on a rip-off of taxpayer money,” said Wyden.

The exchanges in the Senate and elsewhere on Capitol Hill illustrated both the political dangers and potential opportunities presented by the rise in gas prices and the accompanying consumer discomfort.