Gas Prices, Government Debt Return to Forefront in Congress

BY Quinn Bowman  May 5, 2011 at 3:09 PM EDT

U.S. Capitol; photo by Bill Clark/Roll Call

Thursday on Capitol Hill represented a significant shift in narrative, as attention turned from the minute details of the death of Osama bin Laden to the looming debate over the budget, the debt ceiling and gas prices.

Gas prices, in particular, were the subject of discussion on the floor of the House, as the Republican majority introduced a bill that would direct the secretary of the Interior to sell leases to four new oil-drilling tracts off the coast of Virginia and in the Gulf of Mexico.

Republicans said Wednesday the act would help address high gas prices by increasing supply, while Democrats called it a handout to oil companies that would not reduce gas prices, which are now averaging around $4 a gallon.

The House passed the Restarting American Offshore Leasing Now Act 266-149. Thirty-three Democrats voted yes and two Republicans voted no.

House Speaker John Boehner blamed the Obama administration for preventing energy production and seeking to regulate carbon emissions with the Environmental Protection Agency. Republicans have frequently criticized President Obama’s moratorium on deepwater drilling put in place after the Deepwater Horizon catastrophe spilled millions of gallons of oil into the Gulf of Mexico.

“Republicans are standing with the American people who want us to increase the supply of American energy that will lower costs, reduce our dependence on foreign oil and create jobs here in America…The American people will remember who listened to them and who didn’t,” Boehner said.

House Minority Leader Nancy Pelosi supported an unsuccessful bid on an amendment to eliminate special tax breaks given to the oil industry.

“Republicans have brought to the floor another ‘drill-only’ bill that will not bring down prices at the pump. It’s a boon to ‘big oil’ that would make another catastrophic oil spill more likely. Instead of more giveaways to ‘big oil,’ this morning, Democrats are calling on Republicans to allow us to vote on bill that ends one of the most egregious tax breaks for ‘big oil,’” Pelosi said on the House floor.

She estimated the measure would save $31 billion over 10 years.

Democrats hoped to make inroads on the issue after Boehner said recently that oil companies should “pay their fair share” while declining to support a repeal of tax breaks for the industry. President Obama wrote a letter to congressional leaders in April calling for an end to $4 billion in tax subsidies.

“In the past CEO’s of the major oil companies made it clear that high oil prices provide more than enough profit motive to invest in domestic exploration and production without special tax breaks. As we work together to reduce our deficits, we simply can’t afford these wasteful subsidies, and that is why I proposed to eliminate them in my FY11 and FY12 budgets,” Mr. Obama wrote in the letter.

And down the street at the Blair House, Vice President Biden met with four Democrats and two Republicans for yet another discussion on how to reduce federal deficit and debt ahead of the looming vote to raise the government’s authority to borrow money.

Senate Minority Leader Mitch McConnell urged people in the Biden meeting to take action on entitlement reform.

“Everybody agrees this is a crisis. More people, including the president, agree that failing to address it would be disastrous for jobs and the economy. And everybody knows the upcoming debt limit vote is the best opportunity we have to do something about it,” McConnell said, adding that tax increases should be off the table, while entitlement reform should be a focus.

Majority Leader Harry Reid offered an immediate rebuttal on the Senate floor. He said McConnell is most concerned about preserving tax cuts for the rich.

Reid held up the House Republican budget plan, which he plans to put before the Senate in an effort to divide Republicans, as an example of how Republicans would reduce deficits “(The House Republican budget) has a number of ways of saving money. The most significant way of saving money is destroying Medicare,” Reid said.

“The only way we are going to work our way through this is on a bipartisan basis,” Reid added.

The Biden meetings take place as a bipartisan group of senators called the Gang of Six is working on a Senate debt-reduction package. And Senate Budget Committee Chairman Kent Conrad, D-N.D., is expected to unveil his 2012 budget plan next week.

The meetings and plans will all go toward an eventual showdown over how to reduce a growing national debt in the long term, as well as under what terms Congress will raise the government’s debt ceiling. At the heart of the debate will be how to deal with Medicare and Medicaid spending, as well as whether or not tax increases will be part of any deal reached.

According to the Treasury Department, the government is expected to reach its limit for borrowing money by Aug. 2.