President Obama on Thursday called on Congress to end tax breaks for oil companies in a populist speech that sought to turn the blame for gas prices nearing $4 a gallon back onto his Republican critics.
In fiery, campaign-style remarks delivered from the Rose Garden, Obama told lawmakers that they can “stand with big oil companies, or they can stand with the American people.”
President Obama says Americans are getting hit twice — once at the gas pump, and once more by sending billions of dollars in tax subsidies to oil companies.
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As grumblings grow louder that the world’s countries could reduce oil from their strategic reserves, experts are still divided on whether they should do so.
FACT CHECKER | Heard the president claim that the U.S. has 2 percent of the world’s oil but consumes 20 percent?
Senate Democrats followed by forcing a vote to end tax cuts for the five largest oil companies, which Republicans resoundingly defeated.
“With record profits and rising production, I’m not worried about the big oil companies,” Obama said. “I think it’s time they got by without more help from taxpayers who are having a tough enough time paying their bills and filling up their tanks.”
“And,” he added, “I think it’s curious that some of the folks in Congress who are the first to belittle investments in new sources of energy are the ones fighting the hardest to keep these giveaways for big oil companies.”
Obama raised the issue of rising gas prices outside the Beltway last week in a tour of four states important to domestic energy production — three of them in play for the November election.
In addition, the administration apparently has worked to arrange a global release of emergency petroleum reserves to reduce the price of oil, according to reports from French government officials.
On Thursday, French Prime Minister Francois Fillon said there was a “good chance” that the United States and Europe would tap their reserves.
The White House would not confirm the report, saying only that an emergency release is “on the table, but no decisions have been made and no specific actions have been proposed.”
The efforts underscore the political and economic vulnerability created by the increase in gas prices. Republicans hammered Democrats all week, arguing that Obama’s energy policy should move far more aggressively to encourage domestic production.
House Speaker John A. Boehner (R-Ohio) circulated independent research showing that increasing taxes on oil companies would likely increase prices for consumers.
In an e-mail to reporters, Boehner cited an analysis from the nonpartisan Congressional Research Service examining the effect of eliminating the subsidies.
“On what would likely be a small scale, the proposals . . . would make oil and natural gas more expensive for U.S. consumers and likely increase foreign dependence,” according to the analysis.
Teeing up the debate this week, Senate Democrats on Monday introduced a measure to end $24 billion in tax cuts and authorize new tax credits for alternative energy.
“Is this really the best we can do?” Senate Minority Leader Mitch McConnell (R-Ky.) asked before Thursday’s vote.
The measure ultimately failed — as expected — when 51 senators voted for cloture but 60 votes were needed to move to final passage.
The one short-term economic weapon in Obama’s arsenal may be tapping emergency oil reserves. The United States has 700 million barrels of crude sitting in its Strategic Petroleum Reserve, which is stored in salt caverns near the Gulf of Mexico. And the International Energy Agency, which advises 28 countries on energy issues, said Thursday that it is “ready to act if market conditions warrant.”
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