April 04, 2020

Protest over 2 oil tax continues in Congress

WASHINGTON — Warning that a proposed heating oil tax threatens budget approval, about 50 Northeast and Midwest lawmakers have appealed to congressional leaders to drop the tax from the budget plan.

“The removal of this exemption, in our minds, threatens the enactment of the entire package,” lawmakers said in a letter to House Speaker Thomas Foley, D-Wash., and Senate Majority Leader George J. Mitchell.

Heating oil was originally exempt from any tax in the five-year, $500 billion deficit reduction plan unveiled Sunday. After protesting that a 19-cent increase in the federal gasoline tax would place a hardship on Western residents, Sen. Lloyd Bentsen, D-Texas, urged removal of the exemption. The 2-cent-per-gallon heating oil tax was added to the budget plan in the final hours of negotiations at the urging of Bentsen.

“If one participant in the negotiations can insist that the exemption be excluded,” the letter reads, referring to Bentsen, “then certainly House and Senate leaders can restore fairness to the package by restoring the exemption.”

Signers of the letter say they are “disturbed and angered” over the oil tax. Mitchell said Wednesday that the tax was a controversial issue throughout the budget negotiations and was part of a last-minute compromise.

The letter-signing was spearheaded by Rep. Silvio Conte, R-Mass., who was on the House floor soliciting more signatures for the letter late Thursday afternoon. Conte also appealed to Foley on the House floor Wednesday to drop the tax.

Congressional members from New England who have signed the letter include Rep. Olympia J. Snowe and Rep. Ronald Machtley, R-R.I.

Rep. Claudine Schneider, R-R.I., was hoping to sign the letter Thursday night, according to her press secretary, Josie Martin.

Rep. Joseph E. Brennan did not sign the Conte letter, fearing that it indicates support for the budget if the oil tax exemption was replaced, said his spokeswoman Sheryl Bagalio. Brennan plans to vote against the budget, Bagalio said.

On his own Brennan sent a letter to President George Bush Wednesday saying that the budget agreement “places the burden of eliminating the deficit squarely on the backs of those who are least able to afford it — those with middle and low incomes.”

Brennan said that the price of heating oil has “skyrocketed” since Iraq’s Aug. 2 invasion of Kuwait, and that a seriously cold winter would be a “disaster” for families with marginal incomes.

The heating oil tax is expected to cost the average consumer about $16 a year more in fuel costs, but still kindled outrage from northern lawmakers who said the tax is unfair to constituents already hit hard by an economic slowdown in that region.

In a study of the budget agreement’s regional impact, the Northeast-Midwest Congressional Coalition found that gasoline consumption in Texas was above the national average in 1988.

But the study also claims that four Northeastern states — Maine, New Hampshire, Vermont and Delaware — also had above-average levels of gasoline consumption that year.

“Requiring the citizens of these states to pay additional taxes on home heating oil will not add to the equity of the package,” the study said.

Bentsen said a home heating oil tax would ensure that all regions of the country “share the burden” of deficit reduction. The heating oil tax is expected to generate $200 million in revenue.

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