Baby, it's cold outside.

It's going to be a tough, cold winter for families struggling to get by when those winter heating bills start coming in.

Homeowners using natural gas are expected to pay 48 per cent more in heating bills this winter, according to the U.S. Energy Department. Heating oil costs are forecast to rise 32 per cent.

There's a federal program to help low-income families hit with those high costs, but - surprise! - it's under-funded by $3 billion dollars.

Last week, Big Oil's profits were announced. According to Bloomberg, the top five oil companies reaped $200 million dollars per day in profits during the 3rd quarter.

The WaPo put the profits of the biggest winner -Exxon Mobile -- in perspective:

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By most familiar comparisons, the $9.92 billion profit earned by Exxon Mobil Corp. in just three months is almost unimaginable. It would cover all Social Security benefit payments for three months. It would pay for an Ivy League education for about 60,000 kids. It would pay the average list price for more than 160 Boeing 737s. It would fund the military operations in Iraq and Afghanistan for more than two months.

Yet oil industry representatives and Exxon Mobil yesterday made a game effort to cast the record profit, earned during a quarter in which the Gulf Coast was shattered by hurricanes and gas prices rose well above $3 a gallon, as middling at best.

According to the article, "Oil industry analysts yesterday also pointed out that while times are good for oil companies, one of the reasons is the huge American demand for gas at a time when supply is constrained."

That story - the prevailing free-market wisdom -- is false, according to internal oil-industry memos unearthed by the Foundation for Taxpayer and Consumer Rights:

The three internal memos from Mobil, Chevron, and Texaco show different ways the oil giants closed down refining capacity and drove independent refiners out of business. The confidential memos demonstrate a nationwide effort by American Petroleum Institute, the lobbying and research arm of the oil industry, to encourage the major refiners to close their refineries in the mid-1990s in order to raise the price at the pump.

You can read the memos here.

Byron Dorgan, Ted Kennedy and other Dems have called for a windfall tax on Big Oil's bonanza, but the Bush administration - essentially an arm of that industry - has signaled that such a proposal is a non-starter. Bloomberg:

Energy Secretary Samuel Bodman said yesterday that he opposes any proposal for a windfall profits tax…

A tax of that sort "is not something I would be in favour of," Mr. Bodman said. "That would be the equivalent of some kind of windfall profits tax," he said. "We have proven, I thought, to our general satisfaction back in the '70s and '80s that that didn't work."

To who's satisfaction? Oh, never mind.

This is a great issue for Dems. According to Adam Sieminski, an energy analyst with Deutsche Bank, "The administration has come under the gun for its insensitivity to lower-income people … The administration recognizes that they have to act like they care."

But they're constrained by their ideology from doing anything more than flapping their gums. That's not gonna be enough. Even Judd Gregg (R-NH) -- with whom I've taken issue for making silly free-market arguments against things like drug reimportation - told the Boston Globe that he was "infuriated" by the energy industry's recent profits and came out in support for a windfall tax.

He said, "some might call this a novel approach for me, but I cannot sit back in good conscience while those in our society struggling to heat their homes are being left in the cold by oil companies."

You know when Ted Kennedy and Judd Gregg see eye-to-eye you're looking at a tasty wedge issue for the left.