Obama Reinforces Call to Cut Tax Breaks for Oil Companies

Posted April 26, 2011 at 2:39pm

Updated: 4:38 p.m.

President Barack Obama pressed Congressional leaders on Tuesday to end tax breaks for oil companies and use the money “to invest in clean energy to reduce our dependence on foreign oil.”

In a letter to House and Senate leaders, Obama noted “high oil and gasoline prices are weighing on the minds and pocketbooks of every American family.” He acknowledged “there is no silver bullet” to paring down gas prices — the national average is currently $3.88 a gallon — but nevertheless charged that “outdated tax laws” that help oil companies should sunset.

“As we work together to reduce our deficits, we simply can’t afford these wasteful subsidies, and that is why I proposed to eliminate them in my FY11 and FY12 budgets,” Obama wrote.

The letter was sent to Speaker John Boehner, House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.). In his letter, Obama also pointed to comments Boehner made Monday during an interview with ABC News in which the Ohio Republican said that ending oil subsidies is “certainly something we should be looking at.”

Obama said he was “heartened” by those remarks, which were seized upon by other Democrats. In a statement earlier Tuesday, Senate Democratic Conference Vice Chairman Charles Schumer (N.Y.) said that Boehner “see[s] the light on the insanity of providing subsidies to profit-soaked big oil companies.” Pelosi’s office, meanwhile, issued a release highlighting Boehner’s “change of heart.”

But despite Boehner’s comments Monday, spokesman Michael Steel cautioned they were not an endorsement of Obama’s energy plan.

“The Speaker wants to increase the supply of American energy and reduce our dependence on foreign oil, and he is only interested in reforms that actually lower energy costs and create American jobs,” Steel said in a statement. “Unfortunately, what the President has suggested so far would simply raise taxes and increase the price at the pump.”

McConnell called Obama’s letter “counterproductive.”

“If someone in the administration can show me that raising taxes on American energy production will lower gas prices and create jobs, then I will gladly discuss it,” he said in a statement Tuesday afternoon. “But since nobody can, and the President’s letter to Congress today doesn’t, this is merely an attempt to deflect from the policies of the past two years. Instead of returning again and again to tax hikes that increase consumers’ costs, the administration and its Democrat allies in Congress should open their eyes to the vast energy resources we have right here at home and to the hundreds of thousands of jobs that opening them up could create.”

Obama’s letter on gas prices comes as a new Washington Post-ABC News poll, released Tuesday, revealed that 70 percent of respondents said high gas prices are a financial burden; just 39 percent of those same respondents said they approve of the job Obama is doing.