The Senate Finance Committee yesterday formally sent a taxless energy tax bill to the Senate, 13 to 5, after Chairman Russell B. Long (D-La.) backed down on a couple of points to avoid antagonizing some powerful senators.
After his committee rejected all three of President Carter's proposed energy-saving taxes, Long settled on the idea a week or two ago of loading up the bill with tax credits to encourage production and conservation of energy.
His hope to whip this skeleton bill through the Senate next week and go to conference witht he House to bargain about taxes and incentives. The House approved all three Carter taxes, on domestic crude oil, industrial use of oil and natural gas and low-mileage cars.
Sen. Edmund S. Muskie (D-Maine), chairman of the Senate Budget Committee, called a meeting of his committee for Tuesday morning, just before the Senate takes up the energy tax bill, to consider the budget-busting implications of Long's tax credits.
Muskie, who has tangled with Long before and lost on this issue, said last night he was not predicting a floor fight with Long but felt his committee should consider the legislation in any case.
Long supports the crude oil tax, but wants the revenue to be returned to producers as incentives rather than returned to the public, as Carter proposed.
To make sure that the Senate conferees will be free to make about any kind of deal they can in conference, the committee ordered its staff to draft language that would give them broad discretion in such areas as how to spend money raised by taxes the Senate had never considered. The senators had also voted last week to create an energy development corporation to subsidize production of expensive new energy sources, though they provided it with no money.
Yesterday morning as the Finance Committee prepared to vote out the energy bill, Long said he'd been thinking that jurisdiction over a corporation of that sort might belong to the Senate banking or energy committees rather than to Finance.
He suggested that, rather than anger other committees who would consider it a "trepass upon their jurisdiction," Finance should drop the corporation provision from the bill. It could be offered as an amendment on the Senate floor, where the jurisdiction question could not be raised.
Word might have reached Long that Sen. Henry M. Jackson (D-Wash.). Energy Committee chairman, and Sen. William Proximire (D-Wis.), chairman of Banking, have met with a group of liberal senators to discuss ways of blocking Long's plan to give away $40 billion in tax incentives by 1985.
Long also said he's heard that some members were disturbed by language the staff had drafted - which Long said he had not seen - for the report accompanying the bill stating that if the final conference bill contains any energy taxes they "must" be accompanied by tax credits. Long suggested that the word be changed to "May," and it was. The bill contains "must" language, but that could be changed by the conferees.
Last week, the committee decided to end all the tax credits they had voted by 1985. Yesterday they reconsidered and voted 12 to 3 to make tax incentives for oil extracted from shale and hard-to-reach natural gas permanent. The credit is $3 a barrel for shale oil and 50 cents per thousand cubic feet for geopressurized methane, much of which is under Long's state of Louisiana.
The energy bill may come under a crossfire on the Senate floor from conservatives who see it as the first step in a plan by Long to save the crude oil tax and liberals who view it as a handout to the oil and gas industry.
Sen. Bob Dole (R-Kan.) told the committee that its vote sending the bill to the Senate floor would be "the first step toward a massive tax in-cease. You'll be voting for the crude oil)$ equilization tax in some form."
Long observed that the bill is "a massive tax cut as it stands."
Sen. Henry F. Byrd Jr. (Ind.-Va.) voted against the bill because, he said, the committee had failed to achieve its stated goal of emphasizing production rather than conservation. More than 90 per cent of the credit voted by the committee would be used to help industries convert from oil and gas to coal-fired boilers. Byrd also noted that the staff had increased its estimate of the revenue loss caused by the credits from $32 billion to $40 billion by 1985.