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The vote marks the Democratic party's most comprehensive response to rising gasoline, jet fuel and diesel prices, and will kick off a debate that is expected to last at least until the presidential elections in November.
Republicans are expected to block the plan, which includes imposing a 25% tax on windfall oil-company profits, and in the process highlight the differences between the parties on energy policy.
Gasoline prices surpassed a nationwide average of $4 a gallon over the weekend, and on Friday the price of crude oil shot up by an almost $11 a barrel, the biggest one-day increase on record. Oil refiners are having trouble passing through all the increases in crude oil prices, U.S. airlines such as Aloha have filed for bankruptcy protection, and U.S. drivers are cutting back on purchases.
"There's no doubt in my mind that if we don't come to grips with this energy situation as quickly as possible, we're going to find ourselves in a deep recession," Senate Majority Whip Richard Durbin, D-Ill., told reporters on Monday.
The Democrats' plan revives long-simmering proposals, such as repealing tax breaks granted to in 2004 to companies such as Exxon Mobil Corp., (XOM) Chevron Corp. (CVX), ConocoPhillips (COP), Royal Dutch Shell PLC (RDSB) and BP PLC (BP) for domestically produced goods. Oil companies would also be subject to less- favorable tax treatment for certain kinds of foreign income, and would be subject to a 25% tax on windfall profits related to the surge in crude oil prices.
The legislation would also give the U.S. attorney general the power to take action against OPEC for limiting oil production. And it would authorize the Federal Trade Commission to take action against big suppliers determined to charge excessive prices.
Democrats need 60 votes to proceed with debate, a threshold that they aren't expected to cross. The White House has in the past also threatened to veto any legislation that raises taxes on oil companies, making any bill all but impossible to pass.
"Look, I'm not here to defend the oil companies, but they are the people who produce the oil, and, if you raise the cost of doing business, it will be passed on at the pump," Senate Minority Leader Mitch McConnell, R-Ky., said on Fox News on Monday.
If their efforts fail on Tuesday as expected, Democrats say that they may try to move pieces of the bill through Congress individually, rather than as a package. Among the likely candidates: a provision to crack down on speculative trading through IntercontinentalExchange Inc.'s (ICE) ICE Futures Europe. The exchange isn't subject to speculation limits as are U.S. exchanges, and is overseen by U.K. regulators who don't hold speculators to account if their positions become inordinately large.
"Speculators have been driving the price of oil far higher than the supply," said Tyson Slocum, director of Public Citizen's energy program.
The debate comes as regulators and Congress are proceeding on a host of fronts. The Commodity Futures Trading Commission on Tuesday hosts an all-day energy-markets forum. The U.S. Senate is also voting this week on whether to proceed with a tax bill that would extend tax credits for projects to generate energy from solar power, wind, and other sources of renewable energy.
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