In bailout, Bush will allow oil company tax he opposes In signing bailout bill, Bush will allow oil company tax he opposes

WASHINGTON — President Bush has long opposed singling out oil and gas companies for higher taxes.

But today he signed a bill that will do just that.

The massive financial bailout package approved by the House today — supported by the administration and now heading for the president's desk — blocks oil and gas companies from enjoying nearly $5 billion in anticipated tax cuts, while raising nearly $4 billion more in new taxes to help fund tax breaks for renewable energy.

The legislation freezes the tax deduction oil and gas companies receive for their domestic manufacturing operations at 6 percent, while other American manufacturers will see that deduction rise to 9 percent in 2010. That provision will raise $4.9 billion over 10 years.

The legislation would raise another $2.2 billion by tightening the rules applying to oil and gas companies' taxes on income earned overseas.

And the bill would raise $1.7 billion by increasing what producers must pay to the Oil Spill Liability Trust Fund from 5 cents per barrel to 8 cents per barrel starting in 2009 and then 9 cents a barrel in 2017.

Oil industry leaders were opposed to those provisions.

david.ivanovich@chron.com