By Brian Friel and Geof Koss, CQ Staff

The Senate will debate this week competing energy proposals that pose multiple challenges for leaders of both parties.

Democrats are bringing to the floor a bill that would end some tax breaks for the five largest oil companies, and Republicans will counter with a measure to boost domestic fuel production.

Each measure reflects well-established partisan positions: Democrats want to spark a shift to renewable energy, while the Republicans want to increase the supply of fossil fuels. Neither approach can attract the 60 votes needed to overcome objections from the other side, which would prolong a stalemate on energy policy.

The debate will likely be a proxy battle for how each party will address high gasoline prices, tax policy and the fight over the budget deficit.

Democrats want to count the revenue that would be gained from their bill (S 940) sponsored by Robert Menendez of New Jersey — estimated at $21 billion over 10 years — as deficit reduction. The measure is designed to signal their broader interest in eliminating a range of tax breaks, particularly those for corporations, as part of an effort to shrink the deficit that will be negotiated this summer between Congress and the White House.

“This $21 billion is an excellent down payment on our effort to get the nation’s fiscal house in order,” Charles E. Schumer, D-N.Y., said May 12. “The bill repeals a host of byzantine tax provisions that only a lobbyist could love.”

Schumer said Democrats will try to include the measure in a deficit reduction package, even if the Senate rejects it.

Republicans oppose reducing the deficit with new tax revenue, insisting that the effort rely entirely on spending cuts.

But even within the 53-member Democratic Caucus, the push for tax increases is controversial. Bernard Sanders, I-Vt., has called for 50 percent or more of a deficit reduction package to come from tax increases on high-income earners and businesses, while Ben Nelson, D-Neb., has argued that the bulk of deficit reduction should come from spending cuts. Nelson also opposes the oil tax bill Democratic leaders are backing this week.

Internal Divisions

The decision to single out oil companies has also divided Democrats, costing leaders the support of oil-state senators including Nelson, Mary L. Landrieu of Louisiana and Mark Begich of Alaska. Landrieu called the bill headed to the floor a “gimmick” and argued that Congress should review all energy subsidies, including those favored by other Democrats that help the wind, solar, geothermal, nuclear and hydropower industries. “Should some of these subsidies and tax credits be looked at? Yes, in a comprehensive format,” Landrieu said.

If the Senate debate turns to other energy subsidies, that could ignite intraparty arguments on both sides of the aisle. Tom Coburn, R-Okla., has been trying to cut federal backing for ethanol, a corn-based fuel, and fellow Republican Charles E. Grassley of Iowa has vowed to block that effort.

The Democratic leaders’ attack on oil subsidies poses internal challenges for Republicans as well. While most of the GOP will oppose the bill because it would increase taxes, some members of the conference have long argued against such targeted subsidies.