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Congress wary of oil-market speculation

After a failed effort to boost taxes on oil companies, lawmakers turn attention to role of speculators in driving up oil prices.

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As energy prices soar, Congress is under the gun to find a way out for American consumers – or, failing that, someone to blame: Big Oil, speculators, or the other political party.

Oil companies dodged a bullet in the Senate this week, as Republicans blocked an energy bill that would have imposed a windfall profits tax on them and ended billions in tax breaks. But Democrats, who control both the House and Senate, plan to bring the issue up again, even as bipartisan scrutiny shifts to the role of speculators in contributing to sticker shock at the pump.

The Senate bill, which fell nine votes short on a procedural vote, proposed a 25 percent windfall profits tax for companies that made more than 10 percent above a past average. It also would have created an Energy Independence and Security Trust Fund – and used the $17 billion in discontinued Big Oil tax breaks to fund it.

Senate GOP leaders dubbed the legislation a "no energy" bill because it produced no new domestic sources of energy. The White House threatened a veto on grounds that it would reduce oil supply and increase energy costs. It's "exactly the opposite of what the Congress should be doing at a time when consumers are already burdened with record high energy prices," President Bush said in a statement.

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