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Senate backs tougher fuel-economy rules for cars, SUVs

A push to reduce tax breaks for oil, gas firms fails

Email|Print| Text size + By Steven Mufson
Washington Post / December 14, 2007

WASHINGTON - The Senate passed an energy bill with overwhelming bipartisan support last night, but only after a Republican filibuster threat forced Democratic leaders to ditch the bill's tax package, which would have extended tax breaks for wind and solar projects while reducing those for the biggest oil and gas companies.

The revised bill, passed 86 to 8, would boost fuel efficiency standards for new automobile fleets to 35 miles a gallon by 2020, increase energy efficiency standards for appliances and buildings, and set a mandate for the vastly expanded use of ethanol and other biofuels.

The measure will go back to the House and, if approved, to President Bush, who said last night that he would sign it.

"Could this bill have been better? Of course it could have," said Senate majority leader Harry Reid, Democrat of Nevada, comparing it to a split decision in a boxing match. But he said that it was still a good bill.

The final bill represents a major setback for the automobile industry, which had fought a losing battle to blunt new fuel efficiency standards. Those standards, the first increase in 32 years, had gained widespread support amid high oil prices and concerns about US dependence on imported petroleum.

The energy bill is a major victory for farm states, which would reap the benefits of the mandated use of 36 billion gallons a year of corn-based ethanol and other biofuels by 2022. Critics say, however, that the new mandate could strain water resources, boost food prices, worsen fertilizer runoff problems, and cost scores of billions of dollars in federal subsidies over the next decade.

Wind and solar groups and environmental groups expressed dismay about the death of the bill's tax package and the earlier shelving of a requirement for utilities to rely on renewable energy for at least 15 percent of their power generation. Wind and solar firms said they needed an extension of tax credits and incentives to make plans.

"For the wind industry, it looks like coal in our Christmas stocking," said Gregory Wetstone, senior director for government and public affairs at the American Wind Energy Association.

Daniel Weiss, senior fellow and director of climate strategy at the Center for American Progress, said the Senate had given "the green light to more efficient cars and renewable fuels but has a red light for renewable electricity from wind, solar, and other clean sources."

Earlier in the day, the Senate had failed for a second time to block a Republican-led filibuster on the energy bill with its tax provisions still intact.

GOP leaders made a stand against a proposed $21.8 billion, 10-year tax package that had the support of the Senate Finance Committee chairman, Max Baucus, Democrat of Montana, and the committee's ranking Republican, Senator Charles Grassley of Iowa.

The bid to end debate failed even though Democratic presidential candidates - Senators Hillary Rodham Clinton of New York, Barack Obama of Illinois, Christopher Dodd of Connecticut and Joe Biden of Delaware - returned from the campaign trail early yesterday morning to lend their support to the bill. They rushed back to Iowa in time for a debate in the afternoon.

The 59-to-40 vote in the morning - one vote short of the margin needed to end debate and clear the way for a vote on the measure - was taken after warnings from the White House and Senator Pete Domenici of New Mexico, the ranking Republican on the Senate Energy and Natural Resources Committee, that Bush would veto the bill because of the tax component.

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