Senate Blocks Debate on Windfall Tax Measures

The Senate Tuesday voted against taking up a new energy package that would revoke $17 billion in tax breaks extended to big oil companies like Exxon Mobil and slap a 25 percent windfall profits tax on firms that don't invest in new energy sources.

CNBC.com

A week after U.S. oil prices hit an all-time peak of $139.12 a barrel and average U.S. pump prices topped $4 a gallon for the first time, Democrats moved to act on soaring gasoline pump prices, which are a growing political liability in the November presidential election.

The Consumer-First Energy Act -- assembled by Senate Majority Leader Harry Reid and other key Democrats -- would tax big energy companies and seek to put checks on oil market speculation.

But the bill's opponents -- mostly Republicans -- blocked a key vote that would have allowed the Senate to formally debate the bill. The White House had threatened to veto it.

The Democratic proposal would funnel the money into tax incentives for renewable energy sources such as wind and solar, and to promote energy efficiency and conservation.

Most Senate Republicans have a different approach to dealing with the growing energy crisis -- pump more oil and gas.

The GOP energy plan, rejected by the Senate last month, calls for opening a coastal strip of the Arctic National Wildlife Refuge in Alaska to oil development and to allow states to opt out of the national moratorium that has been in effect for a quarter century against oil and gas drilling in more than 80 percent of the country's coastal waters.

"Republicans by and large believe that the solution to this problem, in part, is to increase domestic production," said McConnell.

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