Transcripts

Congress Tries To Pull The Plug On Oil Perks

SUSIE GHARIB: And you learn a little Hawaiian along the way. There is a move afoot in Congress to cut tax breaks and deductions for big oil companies and end sweetheart deals on oil leases. The House passed the energy bill today capping the last of the Democrats 100 hours agenda but as Stephanie Due reports, the controversial bill faces an uncertain future in the Senate.

STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: The message to big oil from Democrats: times have changed. The bill repeals tax breaks for oil and gas exploration, rescinds tax deductions for domestic oil and gas manufacturing and rewrites oil drilling royalty leases. Texas Democrat Lloyd Doggett said the bill signals the end of special treatment for big oil.

REP. LLOYD DOGGETT, (D) TEXAS: They prospected in Washington and they never came up with a dry hole. It was one gusher of tax benefits and special benefits and special privileges after another. Now we finally have an opportunity to rewrite a genuine energy policy.

DHUE: The bill would generate $14 billion in taxes and royalty fees over the next 10 years. That money would go to fund alternative energy initiatives. But it shines little light on just how the money will be spent. Republicans blasted the legislation as a political ploy for sound bites at the expense of sound energy policy. They argue the proposal will drive oil and gas prices higher. New York Congressman Phil English called the bill a placebo.

REP. PHIL ENGLISH (R) NEW YORK: That will ultimately reduce domestic energy production, give American energy companies less of a reason to invest in exploration here at home, encourage greater dependence on foreign oil and damage America's manufacturing base.

DHUE: The House bill won't be taken up directly by the Senate. Senate Majority Leader Harry Reid says the Senate will approach energy and global warming issues together with a series of proposals, among them rescinding oil industry tax breaks.

SEN. HARRY REID, MAJORITY LEADER: I think we want to do it for a number of reasons, not the least of which, we're going to pay for everything. We're not going to do deficit spending, as has been done the past six years and this is a pot of money that certainly we should have.

DHUE: House Speaker Nancy Pelosi called today's bill an important first step and she also announced the creation of a select committee to work on gaining energy independence and stopping global warming within 10 years. Stephanie Dhue, NIGHTLY BUSINESS REPORT, Washington.