[Congressional Record Volume 154, Number 95 (Tuesday, June 10, 2008)]
[Senate]
[Pages S5398-S5399]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          WINDFALL PROFITS TAX

  Mr. McCONNELL. Mr. President, over the weekend, as we all know, the 
average U.S. gas prices hit an alltime high of more than $4 a gallon. I 
only point this out because it seems our friends on the other side 
aren't aware of it. In the middle of what some are calling the biggest 
energy shock in a generation, they seem baffled. Faced with a national 
outrage over gas prices, they propose as a solution, of all things, a 
windfall profits tax. If the idea had any merit at all, Republicans 
would consider it. But, of course, it doesn't.
  We know from experience that Jimmy Carter tried a tax hike in 1980, 
and it was a miserable failure.
  The Congressional Research Service says its only effect--its only 
effect--was to depress domestic production, thus significantly 
increasing our reliance on foreign oil and, in the end, less domestic 
production led to significantly less revenue from the tax that was 
expected. The same thing, of course, would happen again.
  The biggest hit would not be to the energy companies, it would be to 
the American consumer who now dreads pulling his or her car into the 
gas station. Hitting the gas companies might make for good campaign 
literature or evening news clips, but it will not address the problem. 
This bill is not a serious response to high gas prices. It is just a 
gimmick. Don't take my word for it. The Democrats themselves said as 
much when their leadership proposed this sham solution last month.
  Americans have lost patience with Democratic inaction on gas prices. 
Americans understand supply and demand. They know the only way to drive 
prices down is to drive production up at home by reducing demand 
through the kind of sensible action we took last year on fuel 
efficiency and renewable fuels. With gas now at $4 a gallon, recent 
polls show that an increasing number of Americans are calling on us to 
exercise the option of exploring for energy at home.
  What is the Democratic response to all this? Last week, the majority 
proposed a climate change tax that would have raised gas prices $1.40 a 
gallon higher than they already are. They are hoping the idea of going 
after energy

[[Page S5399]]

companies will create the illusion of action, after a week in which 
they themselves fought for a bill that would make the problem worse. 
What a political charade.
  This bill is not a serious approach to lowering gas prices. Our 
friends proposed the same one last month. It went nowhere. They didn't 
even bring it up because their own committee chairman opposed it. The 
Democratic chairman of the Energy and Natural Resources Committee, the 
junior Senator from New Mexico, called the windfall profits tax 
``arbitrary.'' The senior Senator from New York cautioned that another 
key provision of the bill would drive jobs overseas.
  If the Democrats themselves don't like the bill and oppose its 
provisions, why are they reviving it?
  Democrats will claim this bill will bring gas prices down, but in 
doing so they are counting on Americans to forget a basic law of 
economics: raising taxes on those who produce something leads to an 
increase in the price of products they sell. This was true in Adam 
Smith's pin factory. It is true for energy companies today. More taxes 
mean higher prices.
  The rational response to high gas prices is to propose a policy that 
would actually lower them, and that is what Republicans have done. Last 
month, we proposed a bill that would allow us to access the 14 billion 
barrels of known recoverable oil on the Outer Continental Shelf in an 
environmentally sensitive way. We have also tried to open the Arctic 
National Wildlife Refuge for very limited and safe exploration. We have 
been blocked by our friends on the other side at every turn.
  When Bill Clinton first vetoed the idea in 1995, the price at the 
pump was $1.06 a gallon. Gas costs nearly four times as much as it did 
then. How high does it have to go before our friends on the other side 
allow limited and environmentally sensitive exploration of these giant 
U.S. reserves? Evidently, $4 a gallon isn't high enough for them.
  So, Mr. President, we have a better plan for addressing gas prices, 
one that respects the laws of supply and demand. In addition to the two 
provisions I already mentioned, our bill mandates that billions of 
coal-derived fuels be produced through clean coal technologies as a way 
of further reducing our dependence on foreign sources of oil.
  Our bill repeals the 1-year moratorium on oil shale production in 
Colorado, Wyoming, and Utah, and it would accelerate the construction 
of refineries in the United States, as well as development of advanced 
batteries for plug-in hybrid vehicles.
  Republicans are determined to lower gas prices the only way we can 
and strengthen our energy security for the long term--by increasing 
supply. We have tried to do so repeatedly, and every time we have tried 
we have been blocked by our friends on the other side.
  Just last month, 48 Democrats blocked consideration of our energy 
supply bill. Last week, they blocked consideration of an amendment I 
sponsored that would have prevented the increase in gas taxes that the 
Boxer climate tax bill would have caused. Now, 2 days after we have 
seen the highest recorded gas price in history, they are proposing an 
idea that has already failed once and which will do nothing to ease the 
pain Americans are feeling at the pump.
  Our friends on the other side have no serious plan to address gas 
prices. They have demonstrated this in the past, and they are 
demonstrating it today.
  Yesterday's Wall Street Journal highlighted the kind of situation 
that has become typical over the past several months. In a story about 
high gas prices, the Journal quoted a self-employed handy man in Dallas 
who is paying twice as much money to fill his tank than he did a few 
years ago. This is what he had to say:

       I feel like I am being held at knifepoint. If they charge 
     $10 a gallon, I'm going to pay it.

  It is time we got serious about helping guys such as this. It is time 
we did something about supply to go along with our previous efforts to 
affect demand. But as long as our friends on the other side refuse, we 
will get nowhere in this debate, and that is why gas prices have gone 
up $1.71 since the Democrats took over Congress.
  I will vote against proceeding to this totally irresponsible bill and 
advise my colleagues to do the same.
  Mr. President, I yield the floor.

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