Obama slams oil company profits as gas prices surge

President Obama on Saturday blasted oil companies for enjoying gangbuster profits while pump prices surged to nearly $4 a gallon this week and again urged Congress to end $4 billion a year in subsidies for the oil and gas industry.

Obama thew the volley in his weekly radio address, the latest in an effort by the White House and Congressional Democrats to tie Republicans to deeply unpopular energy companies.

“When oil companies are making huge profits and you’re struggling at the pump, and we’re scouring the federal budget for spending we can afford to do without, these tax giveaways aren’t right,” Obama said. “They aren’t smart. And we need to end them.”

Senate Democrats plan to push forward a bill as early as next week that would end subsidies to oil and gas companies over Republican objections that the legislation could cost jobs. The bill’s immediate prospects look dim because it is unlikely to win passage in the Republican-dominated House.

In their weekly Saturday radio address, Republicans said Obama’s proposal would hurt the economy and that his unwillingness to open other domestic oil sources is a factor in the high cost of gas.

“Americans are looking for leadership to tackle the rising gas prices, but President Obama has only offered a tax increase on energy and the prospect of reduced supply,” Rep. James Lankford (R-Okla.) said. “For more than two years, his administration has knowingly increased energy prices by choking off new sources of traditional American energy and smothering our economy in new energy regulations.”

In recent days, Democrats have targeted the GOP for its opposition to cutting subsidies.

After Republican House Speaker John Boehner told ABC News this week that “we gotta take a look” at tax subsidies for oil and gas companies, the president seized on the words and fired off a letter to Congress urging ”immediate action,” saying he was “heartened” by the speaker’s comments. Boehner advisers said the speaker meant to say he wanted to look at whether rolling back those subsidies would cost jobs or raise energy prices.

Playing on the royal wedding of Prince William and Kate Middleton, the House Democratic campaign committee launched a Web site that features the image of Boehner’s head atop a royal gown, announcing the “sacred and lasting union between the Republican party and big oil.”

The actions by the White House and its allies come as Obama, already facing public discontent over high unemployment, is at risk of being blamed for the jump in fuel prices.

A Washington Post-ABC News poll this week showed the spike in gas costs is eating away at the president’s popularity.  In a hypothetical matchup with former Massachusetts governor Mitt Romney, the GOP frontrunner in the Post-ABC poll, Romney wins by 24 points among independents who have taken a severe financial hit because of the squeeze at the pump.

Obama acknowledged the political danger of high gas prices last week at a fund-raiser, saying, “My poll numbers go up and down depending on the latest crisis, and right now gas prices are weighing heavily on people.”

Republicans have sought to exploit that vulnerability. GOP presidential candidates joined congressional Republicans this week in criticizing Obama.

“If people thought the country was heading in the wrong direction this has just made it worse,” said GOP pollster David Winston.

Republicans stress that Democrats have unsuccessfully tried to link Republicans to oil companies every time fuel prices have risen.

“When drivers are paying four bucks a gallon, no amount of political scapegoating is going to distract them from the administration’s sustained effort to block and slow the production of American energy,” said Brendan Buck, a Boehner spokesman

By confronting tax subsidies, White House officials say they’re addressing the need for new tax revenues while investing in areas that could cut U.S. dependence on foreign oil.

“The Republicans have a policy that makes no sense, particularly in this fiscal environment — rewarding oil companies with tax breaks while slashing funding for clean energy, which would reduce our dependence on foreign oil,” said Obama communication director Dan Pfeiffer.

A McClatchy-Marist poll this month poll reported that far more Americans blame oil companies for surging oil prices than they blame either political party.

One of the biggest oil companies, Exxon — which reported Thursday that its profit rose 69 percent to $10.65 billion during the first three months of the year -- shot back this week.

“We understand that it’s simply too irresistible for many politicians in times of high oil prices and high earnings — they feel they have to demonize our industry,” Exxon’s vice president for public and global affairs, Ken Cohen, said on the conference call with analysts. He added that there has been “predictable political positioning but no action to actually help bring down energy prices.”

Obama announced a long-term plan last month to move the nation toward clean energy and to reduce the its reliance on foreign oil. He also named a task force to investigate potential ma­nipu­la­tion in the energy market.

These two proposals are not new. Previous presidents who faced rising oil prices have also called for these measures, and neither has ever had much immediate effect.

Obama also faces pressure from Democrats, including Sen. Charles Schumer (N.Y.) and Rep. Ed Markey (Mass.), to tap the nation’s emergency oil reserves to help bring down the price of fuel. The president so far has resisted doing so.

“The idea that we can’t use it to stabilize prices for consumers baffles me,” said Philip K. Verleger Jr., an oil analyst who helped draft legislation creating the Strategic Petroleum Reserve in the 1970s.

Zachary A. Goldfarb is a staff writer covering the White House, focusing on President Obama’s economic, financial and fiscal policy.
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