Amid rising gas prices, Obama to call for vote on killing oil tax breaks
President Barack Obama intends to press lawmakers Thursday to quickly strip billions of dollars in oil industry tax breaks, remarks that will come during his second energy-themed speech in two weeks aimed at blunting GOP attacks over gasoline prices.
Obama will speak Thursday afternoon at Nashua Community College in the swing state of New Hampshire.
“In Nashua, the President will . . . reiterate his call to repeal the unwarranted $4 billion in annual subsides handed out to oil and gas companies, and will urge Congress to take a vote on the repeal in the coming weeks,” a White House official said ahead of Obama’s remarks.
Congress is unlikely to kill oil industry tax incentives amid resistance from many Republicans and oil-state Democrats. Repeal efforts in the Senate last year fell short, and the proposals face even longer odds in the GOP-controlled House.
But Democratic leaders have long sought to put the spotlight on big oil companies – which enjoy large profits when oil prices are high – in order to cast Republicans as defenders of behemoths like Exxon Mobil Corp.
A Senate aide said recently that Democrats in that chamber already plan to highlight the issue to counter GOP attacks.
“We plan to show that when [gasoline] is approaching $4 per gallon, oil companies don’t need the extra help from taxpayer subsidies,” the aide told The Hill. “As a matter of fairness, Republicans should not be continuing to defend this loophole.”
President Obama’s fiscal year 2013 budget plan again calls for ending roughly $40 billion in tax incentives over a decade.
It would raise an estimated $11.6 billion over a decade by ending the oil industry’s ability to claim a lucrative deduction on domestic manufacturing income and an estimated $13.9 billion by ending oil companies’ ability to write-off certain drilling costs, among other repeals.
But oil companies, who have successfully fought off repeal efforts thus far, say that removing tax incentives would slow investment in U.S. energy production and hinder petroleum sector job-creation.
Obama’s remarks Thursday will follow his speech on energy in Florida, another electoral battleground, on Feb. 23.
White House officials have recently warned that there are no “quick fixes” to rising gasoline prices while ramping up their sales pitch for Obama’s energy agenda.
“On Thursday the President will visit Nashua Community College to discuss the important role American energy plays in an economy built to last, and his administration’s strong record of developing new domestic energy sources, expanding oil and gas production, and reducing our reliance on foreign oil,” the White House official said.
“The President will make clear that while domestic oil and gas production has increased under his watch, currently higher than any time since 2003, the solution to high gas prices requires more than increased drilling, it requires an all of the above approach that includes increased production as well as increased efficiency in the vehicles we drive and investments in alternative fuels,” the official said.
Policymakers across the political spectrum, especially in the near term, face few options to substantially affect pump prices, which are tethered to oil prices set on global markets.
But gas prices have nonetheless become the focus of election-season partisan fights in Congress and on the campaign trail in recent weeks.
Republicans are launching daily political attacks against Obama amid the recent run-up in gasoline prices.
Regular gasoline is now averaging $3.74 per gallon nationwide and is much higher in some areas, according to AAA. Prices have climbed 30 cents-per-gallon in the last month.
GOP leaders on Wednesday continued bashing Obama over offshore drilling policies they call far too restrictive, and his recent rejection of a cross-border permit for the proposed Keystone XL pipeline that would bring oil sands from Alberta to Gulf Coast refineries.
Senate Minority Leader Mitch McConnell (R-Ky.) on Wednesday knocked Obama for proposing to raise oil-and-gas industry taxes, imposing “burdensome” environmental regulations, rejecting Keystone and other policies.
“With gas prices skyrocketing and growing turmoil in the Middle East, we can’t afford another year of foot dragging. It’s time for the President to move quickly to approve the entire Keystone XL Pipeline,” McConnell said.
Obama is supporting construction of a portion of the project to bring U.S. crude from Oklahoma to the Gulf Coast, and developer TransCanada Corp. is reapplying for a permit for the pipeline portion to transport oil sands across the border.
This story was updated at 6:34 a.m.