As C-Note Falls Flat, GOP Looks for Plan B on Gas

But many of the party's staunchest supporters are worried about what ideas politicians may float in search of a plausible-sounding remedy. A group of business trade associations representing scores of Fortune 500 companies wrote Senate Majority Leader Bill Frist (R-Tenn.) to warn him against the tax hike. "We will continue to build this coalition to ensure that the very serious ramifications" of the bill are widely known, said the letter circulated by the National Association of Wholesaler-Distributors, which is run by Bush fundraiser Dirk Van Dongen.

All sorts of Republican energy-related proposals are circulating around on Capitol Hill. In the Senate, the list includes price-gouging protections, new tax breaks for hybrid vehicles and to expand refinery capacity, research dollars for alternative fuels, and oil drilling in Alaska's Arctic National Wildlife Refuge, a highly controversial proposal that environmentalists have succeeded in blocking for years.

The House today will consider anti-price-gouging and refinery capacity measures, although neither is particularly controversial. Another House bill in the works would provide incentives for specialty fuels.

The gas-tax rebate was as close to a slapdash effort as legislative proposals get. Numerous GOP senators said they had no idea it was being considered before Frist announced it at last week's news conference.

"They just said, come quick to a press conference," according to Lott.

Senate Energy and Natural Resources Committee Chairman Pete V. Domenici (R-N.M.) conceded that "it just showed up" and said he was not crazy about the idea. He wants Congress to encourage the development of renewable fuels and hybrid vehicles.

The rebate proposal began percolating last month, as prices at the pump topped $3 per gallon and the idea of a federal gas tax holiday starting gaining momentum with Republicans. Their policy aides pointed out that the tax was collected by refineries and that Congress could not guarantee that the savings from the holiday would be passed on to consumers. GOP staffers on the Senate Finance Committee, which writes tax legislation, told Republican lawmakers that if they wanted to make sure consumers reaped the benefit, a rebate was the way to go.

The $100 sum is the equivalent of a nine-month federal gas tax holiday -- far more generous than the two-month break some Democrats were proposing, as Republicans who still support the idea like to point out. "So what we're talking about here is a substantially bigger benefit to the average consumer," said Sen. Rick Santorum (Pa.), considered one of the most vulnerable Republicans in the upcoming midterm election.

But Republicans are sorely divided.

Boehner called proposed new business taxes to pay for the rebate an "insulting" trade-off. He was no more impressed by Bush's suggestion of higher mileage standards. "The American car manufacturers and other manufacturers are producing cars that Americans want," Boehner said. "These high gas prices will lead consumers to probably better decisions. The market can handle this much better than some kind of government regulation."