Chairman Russell B. Long (D-La.) yesterday proposed to his divided Senate Finance Committee a broad compromise on President Carter's "windfall profits" tax on oil.
He would cut the House-passed version of the tax by a third and split the remaining proceeds about equally, half for synthetic fuel production and half in tax credits for homeowners and business who take steps to save energy.
Long's plan was intended to resolve a dispute that has flared between committee members who favor easing the tax on oil producers and those who favor consumer credits for conservation.
The House-passed tax is less than Carter proposed, and Long's committee has already voted to reduce it, cutting $33.2 billion from its estimated $104 billion in revenue over the next 10 years by exempting various types of oil.
The committee has also approved about $99 billion in various tax credits. It has thus spent $28.2 billion more than the House tax would raise.
In addition to smoothing over the split on Finance, Long's proposal would give his committee increased say over other elements of Carter's new energy plan, particularly synthetic fuel production.
Carter proposed putting all the revenue from the windfall tax into a trust fund, mainly for synthetic fuel projects. Long's committee tentatively rejected this fund idea yesterday, but may reconsider later.
It was not immediately clear whether Long would be able to win full support for his plan, which would involve substantial concessions from other panel members who are pushing for their pet ideas.
Sen. Bill Bradley (D-N.J.) who is seeking more tax credits for homeowners, suggested to Long yesterday that synfuels should be dropped to make room for more tax breaks for consumers.
However, Long argued with members yesterday that if all proposals are fully considered, "We won't get this bill out." He had hoped earlier to finish the bill last week, but still is several days away from final approval.
The panel also began considering raising the estimates of available revenues from the tax by assuming higher rates of increase in oil prices over the years and by including expected increases in oil-company income taxes.
Staff calculations show that with those two factors adjusted estimated revenues from the House version of the bill would rise to $424 billion -- enough, at least in theory, to finance everything that panel members have proposed.
Although Long Island had said earlier that only the net House figures should be used, the panel may adopt higher revenue estimates as a way to get out of its box. The White House has used more liberal calculations in some of estimates.
Long's plan for dividing up the windfall tax would run roughly this way:
Approximately one-third of the $104 billion in net revenues cited in the House bill would be given back to the oil companies by exempting major categories of oil from the tax.
Of the remaining $70 billion in windfall revenues, half would be used for conservation in the form of tax credits for homeowners and businesses. The committee already has approved $99 billion worth of these, but would trim that to $35 billion.
The final $35 billion would be earmarked informally for the synthetic fuel program, now being handled by the Energy Committee. The Finance panel has taken one action in this area -- a $4 billion tax credit for users of unconventional fuels.