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Windfall Tax on Tap

Another political battle is brewing after an already tumultuous week of debate on global warming legislation, which was pulled from the floor Friday after it failed to garner enough votes to end debate.

Senate Democrats plan to bring the windfall tax on big oil companies to the floor in an attempt to address skyrocketing gas prices as the summer vacation season gets under way. They hope this will garner a more favorable reception, at least politically, as Republicans charged the climate change bill with raising gas prices at exactly the wrong time.

Majority Leader Harry Reid (D-Nev.) has set the Senate schedule to take up his own proposal that calls for a tax on oil companies’ surplus income and would make oil-producing companies liable in U.S. courts for limiting supply.

A Reid aide said that the Senate may also consider a renewable energy tax credit bill as well as a fix on Medicare reimbursements.

On Friday, Brian Fallon, a spokesman for Democratic Senatorial Campaign Committee Chairman Charles Schumer (D-N.Y.), a chief sponsor of the windfall profits tax, said that the gas plan will allow Democrats to take the debate to the GOP’s doorstep.

“Republicans spent the entire week talking about gas prices on the global warming bill. This bill will give them their opportunity to really own up and legislate. It addresses the short-term and long-term issues. Hopefully, Republicans will want to look at this holistically,” Fallon said.

However, Republicans are sure to punch back, especially on the oil profit tax provision. One GOP aide disputed the notion that the windfall tax would not drive up oil prices and said Republicans would continue to argue their case.

Republican lawmakers relished the debate on the global warming bill, which allowed them to take shots at Democrats for offering it as gas hits record prices. On Thursday afternoon, Minority Leader Mitch McConnell (R-Ky.) tried to offer an amendment to the climate change bill, but Reid resisted and offered McConnell the opportunity to place it on the coming energy measure.

It is unclear if McConnell will offer the amendment on Reid’s energy bill, according to a McConnell spokeswoman.

Republicans are still considering their options about how to play the upcoming energy debate. Last week, they chose to pull out all the procedural stops in a clash over judicial nominations by forcing the Senate Clerk to read the nearly 500-page global warming bill on the floor.

Regardless, one Democratic aide forecasted that the Democratic gas package faces dim prospects, particularly the profit tax. Not only do many Republicans oppose it, but some moderate Democrats are also against it, including Sens. Mary Landrieu (La.) and Energy and Natural Resources Chairman Jeff Bingaman (N.M.).

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