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Obama pumps oil subsidy end

Wed., April 27, 2011

White House tries to capitalize on Boehner’s remarks in TV interview

WASHINGTON – Seizing on an unexpected political opportunity, President Barack Obama urged members of Congress to repeal tax breaks for oil companies and said he was “heartened” that the Republican House speaker revived the idea.

While Speaker John Boehner, R-Ohio, may have veered a bit from GOP talking points on taxes earlier this week – telling a television interviewer that the government is low on revenue and oil companies ought to pay “their fair share” – an aide said that doesn’t mean Boehner advocates a sweeping repeal of subsidies.

But Obama tried to make the most of Boehner’s comments, dashing off a letter Tuesday to congressional leaders reminding them that “high oil and gasoline prices are weighing on the minds and pocketbooks of every American family.”

The back-and-forth took on added meaning at a time when Republicans are demanding spending cuts, and some are suggesting they might not vote to raise the federal government’s debt limit in mid-May unless they get significant reductions. If Congress fails to raise that ceiling when the country reaches it, the country would default on its debts in the coming weeks.

Obama has proposed reducing the deficit through a mixture of budget cuts and ending tax breaks for the wealthy, but Republicans are resistant to the idea of tax increases.

In his letter to congressional leaders, Obama said he was encouraged by Boehner’s remarks, which came in an “ABC World News” interview and seemed to be a concession to Democrats who have sought to end the subsidies.

“Our political system has for too long avoided and ignored this important step, and I hope we can get together in a bipartisan manner to get this done,” the president wrote in his letter.

The president has proposed eliminating subsidies to oil and gas companies, which the administration pegs at $4 billion. Republicans have argued that they are necessary to keep the energy industry competitive and encourage domestic oil exploration.

A Boehner spokesman quickly shut down the possibility that the speaker was moving closer to the president’s proposal.

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

Still, the White House was gleeful about the speaker’s remarks and used the opportunity to score points with consumers. The subsidies are unpopular, particularly during periods of rising gas prices.

Oil and gas companies are set to announce their earnings soon, White House press secretary Jay Carney said, adding that “they are expected to be quite large.”

“While we certainly are glad to see companies making a profit, we do not believe that given the size of those profits – record profits, in some cases – that they need to be subsidized by the American taxpayer,” Carney said.


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