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Bush to veto bill rolling back tax breaks for oil

White House says the president will refuse to sign a bill that puts an

end to $18 billion in tax cuts for the oil industry.

White House will veto

February 26 2008: 7:12 PM EST

 

 

 

WASHINGTON (AP) -- If Congress passes legislation to roll back nearly

$18 billion in tax breaks for large oil companies, advisers to

President Bush will recommend a veto, the White House said Tuesday.

 

The tax legislation is scheduled to come up for a vote in the House on

Wednesday.

 

The revenues from oil companies would be used to pay for tax

incentives for wind, solar and other renewable energy sources,

including for ethanol produced from feedstock other than corn, and tax

breaks for energy-efficiency programs.

 

A similar tax proposal passed the House last summer, but it was

abandoned in the Senate where Republicans overwhelmingly opposed it.

Bush said at the time he would veto the measure because it singled out

an industry for new taxes.

 

The White House made the same argument Tuesday as it outlined its

objections to the latest version of the bill.

 

Democrats anticipated House passage of the bill and hoped that the

recent surge in oil prices to $100 a barrel and gasoline prices

averaging well above $3 a gallon would help garner support for the

measure, especially in the Senate, where it is expected to need 60

votes to overcome an almost certain GOP filibuster.

 

The House bill targets a tax break Congress provided in 2005 to help

domestic manufacturers compete with foreign companies. It would limit

the amount of tax credits the largest U.S. oil companies could claim

under that law. The bill also limits the tax break provided to oil

companies in connection with foreign oil and gas extraction.

 

The oil companies would have to pay an additional $17.65 billion in

federal taxes over 10 years under the proposed changes, according to

an analysis by the House Ways and Means Committee.

 

Oil settles at record high above $100

The White House, in a statement sent to Congress on Tuesday, said the

bill " would use the tax code to target tax increases on a specific

industry in a way that will lead to higher energy costs to consumers

and businesses. "

 

" If this legislation is presented to the president in its current

form, his senior advisers would recommend that he veto the bill, " said

the statement.

 

While the oil companies have lobbied vigorously against the

legislation, other energy companies, including the solar and wind

energy industries, have campaigned for it on Capitol Hill.

 

The bill would extend production tax credits for electricity produced

by wind turbines, biomass, geothermal and certain hydropower

facilities. It also would extend for eight years investment tax

credits for solar energy and fuel cell facilities. Those industries

have argued that they need long-term assurances of tax incentives to

attract investors.

 

The bill also would extend for two years energy efficiency tax breaks

for homeowners, including a $300 consumer tax credit linked to energy

efficiency improvements.

 

 

Real knowledge is to know the extent of one's ignorance.

Confucius