Senate To Rework Ambitious Energy Bill

In the wake of the Senate vote, there was more uncertainty about the fate of the tax package.

Senate Finance Committee Chairman Max Baucus (D-Mont.) said a tax package was "an essential component" of the bill and added that "it will not be jettisoned."

Oil companies have complained vociferously about the House measure, which would raise an additional $13 billion from major oil companies over 10 years. But one GOP aide said the House's tax items were reasonable. One change would exclude oil companies from a tax deduction for manufacturers that Congress adopted in 2004 after international trade negotiators rejected a tax incentive that had been targeted at exporting manufacturers alone. "They got a free ride," said one congressional aide.

Another part of the House package reduces tax credits for imported raw materials; the United States imports 60 percent of its crude oil.

"This is a $13 billion Christmas gift to Big Oil," said Daniel J. Weiss, senior fellow and director of climate strategy at the Center for American Progress. "The size of the tax breaks are a drop in the Big Oil barrel."

GOP and Democratic leaders pointed fingers at each other in the wake of yesterday's vote. Minority Leader Mitch McConnell (R-Ky.) called the electricity requirements and the tax package "twin millstones" around the neck of the bill. Republican lawmakers said Democrats had to decide whether they wanted to adopt energy legislation or "veto bait."

But Democrats said that Republicans were bowing to oil companies and utilities and that they were blocking legislation that Americans want and need. And they said President Bush would be hard pressed to veto it.