Heller: Repeal oil breaks and cut gasoline tax

WASHINGTON -- Criticized by Democrats who portray him as a friend of Big Oil,  Sen. Dean Heller proposed Tuesday to repeal some of the industry's tax breaks and use the savings to reduce gasoline costs for motorists.

Heller, R-Nev., submitted a Senate amendment to reduce the 18.3 cent per gallon federal gas tax by a penny, and make reductions in diesel mixture and aviation fuels.  The gas tax cuts would be offset by raising taxes on oil companies by about $2 billion.

Spokesmen for Democratic Rep. Shelley Berkley, who is seeking to unseat Heller in November, charged he was flip-flopping on oil taxes after voting multiple times previously against repealing billions of dollars in subsidies.

Heller's move was "a back flip that would make an Olympic gymnast proud," spokesman Eric Koch said.

Heller in response said his plan "is moving in a different direction" than earlier ones, by steering savings into gasoline, even though a penny price cut "is not a lot."

"Let's take that money and instead of additional government spending let's reduce prices at the pump," he said.  "These high gasoline prices are going to have a serious effect on the economy if we don't do something about it."

"I think it is just imperative at this point that we come together with some compromise that will lower prices at the pump, that will eliminate these loopholes and increase our resources and go after new resources," Heller said.

Heller proposed his plan as a substitute to a bill by Sen. Robert Menendez, D-N.J., that seeks to strip oil subsidies from the five largest oil companies and steer savings to extend tax credits for alternative energy and to reduce the deficit.

Both the amendment and the underlying bill are likely to go nowhere in the sharply divided Senate where 60 votes would be required to advance the legislation.

In fact, Senate Majority Leader Harry Reid, D-Nev., took procedural steps Tuesday to cut off amendments on the oil tax bill, meaning it is unlikely Heller's even would be brought up for a vote.

It also was unclear where Heller might find support.  By repealing oil tax breaks, his effort angers some Republicans who argue that a tax increase will not bring down oil prices, and that the companies will merely pass on added costs to consumers.

Heller's amendment also calls to open the Arctic National Wildlife Refuge to energy exploration, force the Obama administration to schedule offshore oil lease sales, and approve the Keystone XL oil pipeline, three of the most divisive energy and environmental issues in Congress.

But an amendment to repeal some oil subsidies might help Heller inoculate himself against criticism he is beholden to major oil companies,  which has been one of the  charges Berkley has pursued since early in the campaign.

Heller's amendment "isn't fooling anyone," Koch said, charging that rising gasoline prices coupled with Berkley's election challenge was motivating the Republican senator rather than an aversion to taxpayer "giveaways" to oil companies.