Energy

Obama challenges Republicans on oil subsidies

Chris Moody Contributor
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Seizing upon comments made this week by House Speaker John Boehner that Congress should “be looking into” quelling subsidies for oil and gas companies,  President Obama sent a letter to House and Senate leaders urging them to pass his proposal to end tax credits for oil companies and transfer them to other companies that produce energy through other means.

“I am writing to urge you to take immediate action to eliminate unwarranted tax breaks for the oil and gas industry, and to use those dollars to invest in clean energy to reduce our dependence on foreign oil,” Obama said in a letter addressed to Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell.

In an interview with ABC News this week, Boehner said that oil and gas companies will “pay their fair share in taxes and they should,” adding that subsidies for oil companies are “certainly something that we oughta be looking at.”

Boehner’s spokesman said in reaction to Obama’s letter that the president’s proposal would do nothing to lower gas prices, suggesting Republicans would not take up the measure.

“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,” said Boehner spokesman Michael Steel. “Unfortunately, what the President has suggested so far would simply raise taxes and increase the price at the pump.”

Daniel Kish, senior vice president for policy at the Institute for Energy Research, an oil industry think tank, said Obama has long supported policies that would increase the price of oil, including limits on oil production in the United States, and is now pointing fingers at the oil companies for high gas prices.

“Now that his plan is bearing expensive fruit Americans don’t like, his attempt to shift blame away from his actions is pathetically akin to what we would expect from Hugo Chavez or some other third world populist.  His chickens are coming home to roost,” Kish said.

In the past, Congress has not shown much interest in Obama’s call to transfer the subsidies. The president’s budget proposals for the past two years have called for removing the subsidies for oil companies, but the proposals never made it through Congress. The Senate last year defeated a measure shortly after the BP oil spill in the Gulf of Mexico that would effectively end all tax breaks and subsidies now being targeted by the White House.

Citing last year’s vote, Oklahoma Sen. James Inhofe, ranking member of the Senate Committee on Environment, also suggested that Obama’s initiative was unlikely obtain the votes needed to pass through Congress.

“My bet is this won’t happen,” he said.

While in the Senate, even Obama voted for an energy bill in 2005 that extended the 14.6 billion in subsidies and tax breaks for oil and gas companies. The bill passed the Senate 74-26.

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Tags : energy oil
Chris Moody