Pelosi to push $21 billion tax package

WASHINGTON — Defying a threat of a presidential veto, House Speaker Nancy Pelosi intends to push ahead with a $21 billion tax package, including repeal of tax breaks for major oil companies, as part of an energy bill, aides to the speaker said Tuesday.

Democratic leaders circulated a summary of the legislation that includes the new taxes as well as a requirement for a 40 percent increase in automobile fuel efficiency, a huge increase in the use of ethanol as a motor fuel, and a mandate for utilities to use renewable fuels.

Republicans earlier this year blocked Senate attempts to pass new energy taxes, contending they would hinder domestic oil and gas production. Democratic supporters of the taxes said that with oil hovering near $90 a barrel and the industry making large profits, the tax breaks aren't needed.

The White House has said repeatedly that if the energy legislation singles out the oil companies for new taxes, advisers would recommend that President Bush veto the bill.

Energy Secretary Samuel Bodman reiterated the administration's opposition to such taxes in a meeting with reporters Tuesday. "It is wrong to single out an industry, the oil industry or any industry" for new taxes, Bodman said at an energy newsmaker sponsored by the Platts publication.

The House draft bill, expected to come up for a vote as early as Thursday, calls for repealing $13.5 billion in tax breaks given to major oil companies in 2004 and 2005 and another $7.5 billion in various non-energy tax increases and adjustment to raise revenue needed for the new energy programs, aides said.

They spoke on condition of anonymity because a final bill was still being crafted.

"We are repealing tax breaks for profit-rich oil companies so that we can invest in clean renewable energy" a summary notice to Democratic lawmakers said.

Drew Hammill, a spokesman for Pelosi, confirmed that the energy package will include the sizable tax provision. "It's in there," he said.

The new tax revenues would be used to spur development of renewable fuels including multiyear extensions of solar and wind energy tax credits; tax credits for conservation an energy efficiency, and to recoup lost gasoline tax revenues because of the increased auto fuel efficiency.

The Congressional Budget Office in November projected the gas tax revenue losses from a 40 percent increase in auto fuel economy at $2.2 billion as motorists bought less fuel, although other estimates had put it as high as $3 billion.