Word: decontrols
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Some members of Congress have done an almost total about-face. Until a few weeks ago, Democrat Henry Jackson of Washington, chairman of the Senate Energy Committee and Carter's principal Senate ally on energy, supported phased decontrol. But a trip back home to the Northwest changed his mind, as voters howled about rising fuel prices. Last week Jackson joined with Kennedy and Ohio Democrat Howard Metzenbaum, one of the Administration's bitterest foes in previous energy fights, in co-sponsoring a bill to overrule Carter and extend price controls for two years. With less than five weeks...
Though the Administration optimistically asserts that decontrol will add less than .2% annually to the rise hi consumer prices, the impact could in fact be much more severe. No one really knows to what extent inflation will be aggravated by potentially limitless price rises hi a commodity so basic to the economy as petroleum, yet the nation has no real alternative to freeing up the price of crude. It seems pointless for Washington to preach to the world about the need to conserve while at the same time maintaining artificially low prices that encourage waste...
...Since decontrol appears inevitable, the real scrap will be over Carter's tax proposal. Not only must both the House Ways and Means Committee and the generally pro-industry Senate Finance Committee agree on its details, but after that, the full House and Senate must also vote on the tax. Says a key member of the Senate Energy Committee, Louisiana Democrat J. Bennett Johnston: "There are almost as many views of what is a fair tax and what its proper uses would be as there are members of Congress...
Oilmen insist that all the profits of decontrol, not just some of them, are urgently needed to finance the search for crude. Asks Hugh Liedtke, chairman of Pennzoil Co.: "Are we to raise more tax money or raise more oil?" But some of the biggest firms are swinging around to an emotional accommodation with the idea of a tax, so long as it is phased out in a couple of years. What they want is a temporary levy with a so-called plow-back provision. Under it, companies would be able to reduce their windfall profits taxes each year...
Carter's populist tub thumping is also helping to stir up hostility to oil companies. Two days after his nationally televised energy message, with its harsh attack on the oil industry, the President defended his decontrol program before a Democratic fund-raising dinner by saying, "I will not allow this painful but necessary step to become an excuse for a massive rip-off of the American people by American oil companies. They are going to be all over Capitol Hill like a chicken on a June bug. They say they have more influence on Congress than the American people...