Senate Republicans unveiled a 10-point plan Thursday that offers a $100 "gas tax holiday" rebate check to millions of taxpayers. Meanwhile, Democrats are proposing a 60-day gasoline tax holiday.
In light of gas prices that are nearing a $3 per gallon average nationwide and a November election approaching, lawmakers are looking for any and every opportunity to reduce gas prices, even if their plans are more symbolic that substantive.
Senate Majority Leader Bill Frist, R-Tenn., introduced his 10-point proposal as an amendment to the Iraq war emergency supplemental spending bill currently being debated in the Senate. If passed, and signed into law, it would go into effect immediately.
“We must reduce our dependence on foreign oil by increasing domestic exploration, improving our energy infrastructure and continuing to encourage conservation," Frist said in a statement.
"We are going to ease the burden," added Sen. Pete Domenici, R-N.M., at a GOP news conference unveiling the measures. Frist said he hoped for a Senate vote next Tuesday.
Other provisions of the Gas Price Relief and Rebate Act include giving authority to the Federal Trade Commission to prosecute any retailer unlawfully inflating the price of gas; repealing tax incentives for big oil companies while expanding tax incentives to promote the use of hybrid vehicles; and allowing the secretary of transportation to update rules governing fuel efficiency standards for passenger vehicles.
The bill also legislates what President Bush already announced he would do — suspend deposits to the Strategic Petroleum Reserve until the fall to increase the supply of oil available to consumers. The bill also encourages expansion of existing refineries to expand production capabilities, putting more fuel online for consumers.
The fate of the amendment, however, is uncertain because Frist has included in his plan a provision on opening drilling in the Arctic National Wildlife Refuge. Drilling in ANWR has frequently been a poison pill for Democrats, and Republicans told FOX News they fully expect "Democrat shenanigans, " possibly in the form of a filibuster, on this amendment.
Last year, Republicans had what many saw as the best chance for its passage. Alaska Republican Sen. Ted Stevens tucked ANWR drilling into a defense spending bill at the very end of the session in December. It received 56 votes in favor of drilling, but not enough to stop a filibuster of the bill. Republican defections included Sens. Mike DeWine of Ohio and Lincoln Chafee of Rhode Island, longtime opponents of Alaskan drilling.
During that debate, Frist had to cajole Stevens into stripping the drilling provision out so the defense bill could pass. Democrats were able to hold their caucus together minus Sen. Mary Landrieu of Louisiana, who was not surprisingly more concerned with getting money appropriated for Hurricane Katrina recovery.
Frist said that if President Clinton had signed ANWR drilling legislation 10 years ago, a bill he received but vetoed, today 1 million barrels of oil a day would be flowing from ANWR.
Senate Minority Leader Harry Reid, D-Nev., called the GOP plan an effort at "damage control" after Americans have been badly "hit in the wallet."
"Though the record indicates that Senate Republicans have no interest in conserving energy, they could conserve paper by boiling down their 10-point plan to its essential three points: protect big oil; drill; and adopt the Democratic plan," Reid said.
Reid spokesman Jim Manley added that the GOP price-gouging measure focuses on "mom and pop" operators and not the major oil companies.
"It's designed to protect Big Oil while mistakenly believing that drilling in the Arctic National Wildlife Refuge will solve America's energy problems," Manley said.
"I call on Senate Democrats to work with us to relieve the pain drivers feel at the pump. Democratic obstruction has stifled domestic energy production, and current Democratic finger pointing not only obscures their record, but does nothing to help consumers now. Our plan, however, does,” Frist said.
Already, Sen. Bob Menendez, D-N.J., has proposed a 60-day suspension in the federal tax on gasoline and diesel and a repeal of tax breaks to oil companies worth $6 billion. The holiday would cut the cost of gasoline by more than 18 cents a gallon and reduce the price of diesel fuel by more than 24 cents a gallon. He said it would provide immediate relief of $100 million a day for motorists.
Several major oil companies have already reported sharp increases in their first quarter profits this week and more announcements are expected. On Wednesday, ConocoPhillips said its earnings rose 13 percent to $3.29 billion in the first quarter. On Thursday, ExxonMobil reported a 7 percent increase, or $8.4 billion, in the first quarter.
“While ExxonMobil executives are popping champagne and celebrating their record profits, American families are popping antacids under the strain of soaring gas prices,” Menendez said. “Prices at the pump continue to jump through the roof, while oil company profits follow suit.
The Senate Finance Committee voted unanimously Thursday to allow the Justice Department to prosecute member nations of the Organization of Petroleum Exporting Countries for price-fixing in violation of antitrust laws.
"We are venting our frustration," said Sen. Dick Durbin, D-Ill., adding that he doubted the law would act as a deterrent to OPEC. "They are just going to fight us in court forever," he said.
It also made the rare move of requesting tax returns from the country's major oil and gas companies as part of an investigation into industry profits and soaring gasoline costs.
Sen. Charles Grassley, R-Iowa, the committee's chairman, said senators were concerned about the "record profits and significant executive compensation in the oil and gas industry."
"I want to make sure the oil companies aren't taking a speed pass by the tax man," Grassley said in a statement.
With gasoline prices soaring and oil companies announcing record profits, "it's relevant to know what the real financial picture is for this industry," added Montana Sen. Max Baucus, the panel's ranking Democrat.
On Tuesday, Bush suspended filling of the nation's emergency oil reserve, urged the waiver of clean air rules to ease local gas shortages and called for the repeal of $2 billion in tax breaks for profit-heavy oil companies. He also urged lawmakers to expand tax breaks for the purchase of fuel-efficient hybrid automobiles.
Both Republicans and Democrats said they planned to support rescinding the $2 billion in tax breaks, which included subsidies for exploration in deep waters of the Gulf of Mexico and in geologically or politically difficult regions of the world, as well as royalty relief for certain oil and gas exploration. Executives of the major oil companies said at a recent hearing they do not need those tax breaks.
House and Senate conferees — as part of a broader tax package — were also considering a measure that would change accounting rules involving oil held in inventory, which would force the five biggest oil companies to pay an additional $4.3 million in taxes.
The industry and the White House oppose that measure, viewing it as a form of windfall profit tax that singles out five companies for accounting practices widely used in and out of the oil industry.
Republican leaders and tax writers said they hope to finish work on the broader tax bill this week, but it's not certain the oil inventory tax measure will survive.
In a letter to the IRS, Grassley and Baucus said the tax records of the major oil companies are needed to conduct "a comprehensive review" of the companies' compliance with tax laws.
"As pressure mounts to address extraordinarily high gas prices that consumers are facing at the pump, we feel we should better understand the federal tax posture of the industry," the two senators wrote IRS Commissioner Mark Everson.
In their request, the senators noted not only the industry profits, but "an extremely lucrative retirement plan by one oil and gas industry executive, benefits which may have been subsidized in part by the taxpayers."
The retirement compensation package given by Exxon Mobil Corp. to outgoing Chairman Lee Raymond is said to total $400 million when all pension payoffs and stock options are included.
Red Cavaney, president of the American Petroleum Institute, the major oil companies Washington-based lobbying group, said Wednesday oil company profits are huge because the industry is huge.
"In the oil and natural gas business size is everything," Cavaney said at a news conference. "It is critical to understand that fact when looking at the operational financial performance of our industry."
FOX News' Trish Turner and The Associated Press contributed to this report.