The Senate gave a strong hint yesterday that it would approve some version of the crude oil tax that President Carter considers crucial in his energy program.
By 47 to 30, the Senate rejected an amendment to the energy tax bill that would have put it on record as opposing any new tax on domestic crude oil.
The Senate Finance Committee had rejected the tax, which is designed to force the price of domestic crude to rise to world levels and thus cut its use. And the Senate is not expected to take an up or down vote on it before completing action on the energy bill early this week.
But Finance Committee Chairman Russell B. Long (D-La.) hopes to revive the crude oil tax in conference with the House, which approved it, in exchange for approval of billions in tax credits to encourage production of more energy.
The Senate vote yesterday appeared to signal that it would be receptive to some such package.
This, plus the Senate's approval two days ago of a modified version of the tax on industrial use of oil and natural gas, now makes it appear very likely that the Senate and Congress will approve this year some version of these two most important taxes in the Carter energy program.
This is a far more encouraging picture than the President faced at the beginning of the week when the Finance Committee sent the Senate a taxless energy tax bill after rejecting the oil tax, the user's tax and a tax on gas-guzzling cars. The House approved all three.
Carter hopes his program will save 4.5 million barrels of oil a [WORD ILLEGIBLE] by 1985 to reduce U.S. dependence of foreign oil, which is now nearly half the national consumption of about 17 million barrels a day. The user tax approved by the Senate is estimated to save about 1.2 mbd by 1985. The crude oil tax approved by the House is expected to save about 500,000 barrels. The gas-guzzler tax is expected to save 175,00 barrels daily.
The Senate voted last month to ban gas guzzlers and is deadlocked on that issue in a conference with the House on nontax parts of the energy program. The House preferred the tax as the best way to get rid of low mileage cars.
Both House and Senate bills now contain three different programs to push industry and utilities from use of oil or natural gas to more abundant coal as boiler fuel. One is the tax on use of oil or gas. Second is a tax credit given for conversion. Third is regulatory power given government to order conversion.
Some critics contend none of these carrot-and-stick programs is needed because industry is moving as fast as it can to convert to coal for the same reason that homeowners are insulating their homes - because of the rapid price increases, for oil and gas.
By voice vote, the Senate yesterday adopted a proposal to set up a trust fund to finance development of expensive new energy sources and to improve the nation's transit systems. House-Senate conferees could feed money into the trust fund from any energy taxes they approve.
Rejected, 57 to 18, was an amendment requiring that any tax revenues produced by the act that are not used to find or save more energy be deposited in the Social Security trust funds. Carter wants all energy taxes rebated to the paying public or industry to avoid adverse economic impact.
The House voted to rebate the crude oil tax to the public for the first year but did not decide its use in future years. Long, who will head the Senate conferees at the meetings that will write the final version of the energy tax bill, wants to give part of the revenue - which would total $12 billion a year when fully effective - to the oil industry to help find and produce more oil.
The Senate refused, 65 to 12, to follow the lead of the House and to repeal the individual income tax deductions of state gasoline taxes. It was not expected to save energy, but the House decided a tax break should not be given for purchase of gasoline. Repeal would bring in federal revenues of about $1 billion a year.
By 36 to 35, the Senate refused to strip from the bill a 10 per cent tax credit to businesses that install insulation. Sen. Bob Dole (R-Kan.), who also tried unsuccessfully to delete the tax credit for residential insulation, argued that a credit would produce shortages or a black market and that businesses and homeowners should not be given a tax break for doing what good sense shouldmake them do anyway.