Bush Rejects Big Oil Windfall Tax

Says Industry Should Reinvest Big Profits To Produce More Energy

(CBS/AP)  In the wake of the latest oil company profit report showing much higher earnings, President Bush on Friday rejected calls in Congress for a tax on oil company profits, saying the industry should reinvest its recent windfalls in finding and producing more energy.

"The temptation in Washington is to tax everything," Mr. Bush said in an exchange with reporters in the White House Rose Garden. Rather than for the government to reap the benefit from oil company profits driven by the recent surge in global oil prices, he said, "The answer is for there to be strong re-investment."

"These oil prices are a wakeup call," Mr. Bush said. "We're dependent on oil. We need to get off oil."

With gasoline topping $3 a gallon in many areas, Mr. Bush said energy companies should use their increased cash flows to build more natural gas pipelines, expand refineries, explore "in environmentally friendly ways" and invest in renewable sources of energy.

"That's what the American people expect. They also expect to be treated fairly at the pump," he said.

Mr. Bush's exchange comes in the wake of some congressional Republicans and Democrats in both the House and Senate promising to roll back billions of dollars in tax breaks for major oil companies.

House Republicans refused to go along with a proposal that called on House members to accept a Senate-passed repeal of $5 billion worth of oil industry tax breaks. They are the subject of intense negotiations between the House and Senate on a broad tax bill.

A resolution urging House negotiators to accept the Senate tax proposals failed 232-190, with only two Republicans voting for it.

Meanwhile, a major U.S. oil company has reported soaring first-quarter profits for the third time in three days, buttressed by near-record gasoline and oil prices.

Chevron Corp.'s first-quarter profit soared 49 percent to $4 billion, joining the procession of U.S. oil companies to report colossal earnings as lawmakers consider ways to pacify motorists agitated about rising gas prices.