President Obama urged Congress on Tuesday to take “immediate action” to end tax subsidies for oil and gas companies, as he attempts to limit the political fallout of surging gas prices.
A day before oil firms are set to begin reporting potentially record profits, Obama called on congressional leaders in both parties to roll back more than $4 billion “in unwarranted tax breaks,” saying the money would be better spent on new technology that would reduce the cost of fueling the nation.
“[H]igh oil prices provide more than enough profit motive to invest in domestic exploration and production without special tax breaks,” he wrote in a letter to Congress.
Short of releasing the nation’s emergency oil reserves, the president can’t do much right now to lower the cost of oil. But attempting to show the public that he is taking on the issue has become a priority as the fast-rising price of gasoline has become a major political liability for him.
A Washington Post-ABC News poll released this week found that just 39 percent of people who call gas prices a “serious financial hardship” approve of Obama’s job performance. The survey showed that 60 percent of independents who have been hit hard by gas prices say they won’t support the president’s reelection bid.
The price of gas reached an average of $3.87 a gallon nationwide on Tuesday, more than $1 a gallon higher than it was a year ago, AAA said. In the Washington region, gas averaged $3.93 a gallon.
Like many of his predecessors who faced soaring fuel prices, Obama is trying various tactics to tackle the problem. He acknowledged Tuesday that there is no “silver bullet.”
Obama’s new effort to press Congress to end tax breaks — something that he has been urging throughout his tenure — follows a plan he announced last month to try to reduce the nation’s reliance on oil imports and the formation last week of a task force to investigate potential price gouging.
In his letter to Congress, Obama seized on comments that House Speaker John A. Boehner (R-Ohio) made Monday. “Certainly I think it’s something we ought to be looking at,” the speaker said in an interview with ABC News.
But Boehner’s office said Tuesday that although he is willing to look at the issue, he is far from endorsing any changes.
“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,” spokesman Brendan Buck said. “Unfortunately, what the president has suggested so far would simply raise taxes and increase the price at the pump.”
White House press secretary Jay Carney said at his daily briefing Tuesday that this is an apt week to highlight the tax breaks.
“The oil and gas companies are all announcing their profits this week. They’re expected to be quite large,” he said. “And while we certainly are glad to see companies making a profit, we do not believe that . . . they need to be subsidized by the American taxpayer.”
But he rejected the view that the president’s letter Tuesday was a campaign effort.
“We don’t look at this as an issue of electoral politics in 18 months,” Carney said. “We look at this as an issue of hardship for average Americans today.”