Defying a veto threat from the White House, the House passed legislation that would encourage the use of renewable energy, raise automobile fuel efficiency standards and increase taxes on major oil and gas companies, but the measure promptly stalled when it reached the Senate.

The Energy Independence and Security Act passed the House by a 235-81 vote. The bill provides tax incentives to increase ethanol use to 36 billion gallons by 2022, two-thirds of it from sources such as switch grass and wood chips rather than corn. Utilities would be required to generate at least 15 percent of their electricity from renewable sources by 2020. The bill includes a $3,000 tax credit to help families buy plug-in hybrid and electric vehicles, and includes tax incentives for biking to work.

To help pay for the extra tax credits and incentives, the bill would repeal the manufacturers' deduction for major oil and gas companies and close a loophole that allows them to understate their foreign oil and gas extraction income. House Speaker Nancy Pelosi, D-Calif., called the bill "a shot heard 'round the world for energy independence in America."

The White House has threatened to veto the legislation. "The administration strongly opposes raising taxes in a way that will lead to higher energy costs to U.S. consumers and businesses," said a statement of administration policy released by the White House. "Furthermore, the administration strongly opposes using the federal tax code to single out specific industries for punitive treatment."

When the measure went to the Senate, Republican opponents were able to use procedural tactics to block the legislation. However, the Senate may consider a pared-down version of the bill to attract the 60 votes needed to overcome procedural hurdles. Increased fuel economy standards and an expansion in the use of biofuels do have wide bipartisan support.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access