The Senate Finance Committee continued to rip up President Carter's energy plan yesterday, first voting down the last of his big proposed energy taxes, then voting for a series of energy tax cuts instead.
By a vote of 14 to 4 the committee rejected the idea of a tax on industrial use of oil and natural gas to push companies into the use of more abundant coal. This was the most important energy-saving tax in Carter's plan. Then by a show of hands with only two senators voting yes, the committee also turned down the idea of any increase in the 4-cent-a-gallon gasoline tax that the administration favored.
In a series of votes two weeks ago, the committee had already rejected Carter's proposed tax on gas-guzzling cars and on the wellhead price of crude oil. It also rejected a House action, which Carter had endorsed, repealing the personal income tax deduction of state gasoline taxes.
These taxes were the principal weapon in Carter's plan to save 4.5 million barrels of oil a day by 1985. The House approved all of them except an increase in the gasoline tax.
As of yesterday morning the only tax part of Carter's energy proposals the Senate Finance Committee had approved was tax credits or cuts for homeowners who insulate their residences or install solar heat.
Committee Chairman Russell B. Long (D-La.), who was on the losing side of the most of the day's votes, told the committee yesterday morning that he saw no way it would approve any of Carter's taxes. He proposed that the committee give up trying, report out a skeleton bill consisting of home insulation tax credits and let a House-Senate conference write the energy tax bill.
The committee seemed about to follow Long's suggestion until Bob Packwood (R-Ore.) said that would mean the conferees would have to choose between a "miserable" House bill and nothing from the Senate. The only way to meet Carter's goal of saving 4.5 million barrels of oil a day in seven years, said Parkwood, is "incredible conservative" that would require "extraordinary price increases or rationing and incredibly increased production which requres incentives that we are not prepared to do."
Packwood urged the committee to defer action and let him prepare specific proposals to meet Carter's goals. Most independent studies find that even Carter's own proposals fall considerably short of reaching his goals.
Long set out to determine who besides Parkwood was enthusiastic about taking drastic action to save energy.
"Everyone in favor of a higher gas tax hold up his hand," said Long. Only Packwood and Sen. Abraham A. Ribicoff (D-Conn.) did so.
Packwood insisted on trying to do something more and offered a motion that it was the policy of the committee to fashion a bill that would meet Carter's goals.
Long said he couldn't vote for Packwood's motion until he knew "what direction you're going. If it means voting Louisiana out of the Union I'm not sure I want to."
I will bring in substantial tax proposals," said Packwood.
With that, Sen. Spark M. Matsunaga (D-Hawaii) offered a substitute motion putting the committee on record as favoring a bill that would meet Carter's goals "not through taxes but through tax credits, tax moratoria and incentives."
That sailed through by a vote of 9 to 3.
Assistant Treasury Secretary Laurence Woodworth, who had been trying to weeks to work out a tax compromise with the committee, observed that the committee had said it would vote only tax reductions to increase energy production.
"I think you have increased the deficit several times over," said Woodworth. "It would mean a very, very substantial revenue loss." Next year's federal budget deficit is expected to be about $60 billion.
Long said later the tax breaks could be paid for by having the House-Senate conference approve some of Carter's Tax increases. Or perhaps the tax breaks would stimulate the economy and produce revenue to cover it, he said.
The committee then got to work sweetening up the bill. At the request of Sen. Herman E. Talmadge (D-Ga.), it approved a $3-per-barrel tax credit for production of shale oil, which has so far proved too expensive for commerical production.
Ribicoff got in an amendment to redefine home insulation material eligible for the tax credit to cover the product of a Conneticut thermostat manufacturer. Sen. William D. Hathaway (D-Maine) added a 10 per cent investment tax credit for purchase of hydroelectric power generating equipment.
Matsunaga proposed a tax credit for purchase of geothermal (heat from the interior of the earth) equipment, and that too was approved. But Long objected when Matsunaga and Packwood also tried to get a 22 per cent depletion allowance for the geothermal resource. Long said he believed the heat in the center of the earth was inexhaustible.
Sen. Bob Dole (R-Kan.) persuaded the committee to approve 10 to 6, over Long's vigorous opposition, a provision forbidding the President to impose import duties on foreign oil except in wartime. Energy Secretary James R. Schlesinger said Sunday that Carter might feel forced to take this action to reduce imports if Congress rejected his crude oil tax to raise the price of domestic oil to world levels.
Long said it made no sense for the committee to say that "if we won't act, he can't act."
Woodworth said later the administration has not given up on getting its tax provisions enacted, but hasn't decided whether to fight for them on the Senate floor or wait until the will goes to conference.
The committee will continue working on the bill today.
The Senate, meanwhile, passed 86 to 7 a gutted version of Carter's proposal to require changes in electric utility rate structures to save energy. As it stands, the bill would permit the federal government to intervene in state regulatory proceedings only to make recommendations. The House approved Carter's plan.
The Senate did approve cheaper electricity rates for the elderly, by requiring that power companies sell electricity to persons over 62 at the cheapest rate they charge their largest customers. Sen. Gary Hart (D-Colo.), who sponsored the amendment, estimated it would reduce electricity bills of the elderly by 40 per cent.
Sen. J. Bennett Johnston (D-La.) did not offer his amendment to partially decontrol the price of oil to the utility rates bill because he decided he did not have the votes to win.