"Senate Republicans yesterday blocked a proposal to tax the windfall profits of the nation's biggest oil companies and eliminate some of the firms' tax breaks, rejecting Democratic claims that the measure would help assuage consumer anger over $4-a-gallon gasoline.

The vote was largely partisan, with each party sticking to long-held positions while striving to connect with frustrated consumers in an election year. Gasoline prices rose another 2 cents yesterday to a nationwide average of $4.04 a gallon for regular, but there appeared to be little prospect of imminent action by Congress or the Bush administration.

The Senate fell nine votes short of the 60 required to proceed to debate on the Democrat-sponsored energy measure, which would have erased $17 billion in tax breaks for oil companies over 10 years and created a levy on "unreasonable" profits collected by the five largest U.S. oil companies. Only six Republicans voted to move ahead.

"Today we had a chance to deal with the issue of high gasoline prices, and the Republican senators sent a resounding no," Sen. Charles E. Schumer (D-N.Y.) said at a news conference after the vote. "Of everything they have done so far in terms of obstruction, this is the politically most damaging."

The bill would have used the revenue to create an Energy Independence and Security Trust Fund, tasked with reducing U.S. dependence on foreign and "unsustainable" energy sources and reducing the risks of global warming.

The bill also would have instructed the Justice Department to pursue members of OPEC for alleged price fixing and required oil traders to put up more cash on futures exchanges to address speculation, which many observers believe is contributing to the unprecedented run-up in world crude oil prices.

Republicans said that the measure, which they dubbed the "no energy bill," would do little to lower gasoline prices, and could have the opposite effect by placing an additional tax burden on oil companies. They said the nation could combat high fuel prices more effectively by increasing domestic oil supplies by permitting new exploration in the Arctic National Wildlife Refuge and in waters on the Outer Continental Shelf. Most congressional Democrats oppose drilling in those areas.

"This bill is not a serious approach to oil and gas prices," Minority Leader Mitch McConnell (R-Ky.) said. "Raising taxes on those who produce something leads to higher prices on the product they sell."

Sen. Kay Bailey Hutchison (R-Tex.) added: "Anyone in America who is filling their gas tank must think that Congress is fiddling while Rome burns. The idea that we would bring up a bill that is called an energy plan, that has no energy production in it, is ludicrous."

Democrats accused Republicans of trying to block debate on "the biggest problem confronting the American people right now," in the words of Sen. Claire McCaskill (D-Mo.), who added that if U.S. consumers' "heads aren't about to blow off their bodies right now, they aren't paying attention. They have a right to be very, very angry."

The vote immediately became campaign material for Sen. Barack Obama (D-Ill.), who issued a statement saying that "Senate Republicans turned a blind eye to the plight of America's working families and our nation's worsening dependence on foreign oil."

The Bush administration said the oil crunch was the fault of years of Democratic opposition to drilling. "There's no question that we're paying a price today for decades of Democratic opposition and regulatory obstacles to increasing domestic oil production," White House spokesman Tony Fratto said. "Instead of populist votes that would do nothing for gas prices, we need to allow domestic oil production in environmentally sensitive ways."

In a separate vote, the Senate blocked a proposal to extend an array of expiring tax breaks for individuals and businesses, and to protect millions of middle-class taxpayers from the alternative minimum tax, or AMT. The House overwhelmingly approved a similar bill, minus the AMT provision, May 21. Senate leaders tried yesterday to bring the House bill to the Senate floor, where they planned to replace it with their version, but failed on a vote of 50 to 44 to get the 60 votes they needed to proceed.

The failure of the tax package was a disappointment for many companies that have been pressing hard for an extension of the tax incentives for research and development as well as wind and solar energy production.

Senate Republicans generally support extending the tax cuts, many of which have been embedded in the tax code for years. But they balked at Democratic plans to replace about half the lost revenue by delaying a planned tax benefit for multinational corporations and forcing hedge fund managers to pay taxes on their compensation immediately instead of storing it in offshore tax havens.

The bill would not replace revenue lost by preventing the expansion of the AMT, which would cost the treasury about $62 billion next year.

Republican leaders said they were taking a stand against pay-as-you-go budget rules that automatically assume federal spending will increase from year to year but force lawmakers to make up lost revenue through tax increases or spending cuts when tax cuts expire.

"We don't believe philosophically that in order to extend existing tax policy you should use that to raise taxes on others," McConnell said.

Senate Finance Committee Chairman Max Baucus (D-Mont.) vowed to bring his bill back to the Senate floor, saying paying for the tax cuts is "the right thing to do."" (Lori Montgomery and Steven Mufson, The Washington Post, June 11, 2008)