Record Oil Profits, High Bills Causing Concern in Congress

As a conservative Republican, Sen. Judd Gregg of New Hampshire is not one who would easily call for a new tax.

But Gregg and fellow lawmakers have been getting an earful lately from constituents paying high energy prices while the oil industry posts record profits. So Friday, Gregg called on Congress to consider reinstituting an excess profit tax on oil companies, with some of the proceeds going to help consumers pay for their higher fuel bills.

With the White House and many of his Republican colleagues cool to any tax increase, Gregg’s idea appears to be a long shot. Still, it was another sign of the growing focus in Congress, even from the oil industry’s usual allies, over the soaring profits.

Gregg’s proposal came a day after Senate Majority Leader Bill Frist (R-Tenn.) called for oil industry executives to travel to Capitol Hill to explain why prices are so high. And earlier in the week, House Speaker J. Dennis Hastert (R-Ill.) urged companies to put more of their profits back into building and expanding refineries to increase fuel supplies and reduce prices at the pump.

Hastert issued another statement Friday declaring, “This is America and Republicans don’t believe in punishing success.” But he added, “Oil companies need to do more to inform the American people about what they are doing to bring down the cost of oil and natural gas.”

Another Republican, Sen. Olympia J. Snowe of Maine, on Friday called on the major oil companies to voluntarily contribute to a federal program that helps low-income families pay part of their winter heating bills.

Gregg, chairman of the Senate Budget Committee, voiced some of the harshest criticism of the oil industry by a congressional Republican, saying he found it “infuriating” that the oil industry was posting record profits “while the public and our national economy are suffering under the huge burden of costs of oil and gas.”

“Clearly, something has to be done to reign in the irresponsibility of Big Oil,” said Gregg, whose constituents are worried about higher heating bills this winter. Gregg called on lawmakers to consider using the proceeds from an excess profit tax to help reduce the federal budget deficit and to boost funding for the program that helps low-income families pay utility bills.

Gregg acknowledged it was unusual for him to consider a new tax. “Some might call this a novel approach for me, but I cannot sit back in good conscience while those in our society struggling to heat their homes are being left in the cold by oil companies,” he said in a statement.

Sen. Byron L. Dorgan (D-N.D.), who has led other Democrats in pushing -- without GOP support -- for a windfall profit tax on oil companies, said he was encouraged by Gregg’s comments.

“I think they’re all starting to feel some heat” from constituents, Dorgan said of the GOP lawmakers raising questions about gas prices and oil industry profits. Still, he conceded that his proposal to impose a tax surcharge on oil firms when the market price of oil exceeds $40 a barrel -- with the proceeds rebated to consumers -- faced stiff opposition.

White House budget director Joshua B. Bolten, citing Friday’s news that the economy grew by a strong 3.8% annual rate in the third quarter, said, “The president is not interested in jeopardizing that with tax increases.”

The oil industry responded less than warmly to the calls to tax some of its profits.

“Politicians calling for taxes seem to think oil companies are owned by space aliens,” said John Felmy, chief economist at the American Petroleum Institute. “In fact, they are owned by millions of investors, who have invested for a secure future in 401(k)s, retirement plans and pension funds. Calls for taxes are an open attempt to rip off millions of their own constituents of their hard earned savings.”