Obama demands Congress end oil, gas subsidies

Pres­i­dent Barack Obama talks about U.S. oil depen­dence, Thurs­day, in Nashua, N.H. (AP Photo/Jim Cole)

JULIE PACE

Asso­ci­ated Press

NASHUA, N.H. — Pres­i­dent Barack Obama, turn­ing his polit­i­cal sights on snowy New Hamp­shire, demanded that Con­gress elim­i­nate oil and gas com­pany sub­si­dies that he called an out­ra­geous gov­ern­ment “give­away.” Though polit­i­cally a long shot, the White House believes the idea res­onates at a time of high gaso­line prices.

“Let’s put every sin­gle mem­ber of Con­gress on record: You can stand with oil com­pa­nies or you can stand up for the Amer­i­can peo­ple,” Obama said, reit­er­at­ing an appeal he made last year as gas prices were rising.

The pres­i­dent also said GOP charges that his poli­cies are dri­ving up gas prices won’t pass “a polit­i­cal bull-detector” test and pointed to a chart that showed decreas­ing U.S. depen­dence on for­eign oil. His remarks came as retail gaso­line prices rose Thurs­day to a national aver­age of $3.74 per gallon.

Obama has repeat­edly called for an end to about $4 bil­lion in annual tax breaks and sub­si­dies for oil and gas com­pa­nies, gov­ern­ment sup­port that Obama has said is unwar­ranted at a time of bur­geon­ing prof­its and ris­ing domes­tic production.

“It’s out­ra­geous. It’s inex­cus­able. I’m ask­ing Con­gress: elim­i­nate this oil indus­try give­away right away,” he told a crowd at Nashua Com­mu­nity Col­lege after tour­ing the school’s auto­mo­tive lab.

It was Obama’s lat­est and most direct appeal to Con­gress to act on the tax breaks, a move that is cer­tain to get stiff Repub­li­can oppo­si­tion and that failed before even when Democ­rats con­trolled both Houses of Con­gress. But an admin­is­tra­tion offi­cial said the White House expects Con­gress to soon take up a mea­sure end­ing some sub­si­dies. The offi­cial requested anonymity to avoid speak­ing pub­licly with­out authorization.

Last year, a report by the non­par­ti­san Con­gres­sional Research Ser­vice that was get­ting renewed atten­tion on Thurs­day con­cluded that Obama’s oil and gas pro­pos­als “may have the effect of decreas­ing explo­ration, devel­op­ment, and pro­duc­tion, while increas­ing prices and increas­ing the nation’s for­eign oil depen­dence.” It also said such an impact would likely be on “a small scale.”

Crit­i­cized by Repub­li­cans for tak­ing too much credit for increas­ing oil pro­duc­tion at home, Obama made sure to credit both his admin­is­tra­tion and that of his pre­de­ces­sor, George W. Bush, with­out men­tion­ing Bush by name. The move seemed intended on strip­ping away that line of crit­i­cism from his opposition.

Obama’s insis­tence on a con­gres­sional vote on the oil and gas sub­si­dies came a day after he and House and Sen­ate lead­ers held a lun­cheon meet­ing at the White House that House Speaker John Boehner described as encour­ag­ing and hopeful.

But on Thurs­day, Repub­li­can pres­i­den­tial con­tenders and GOP lead­ers in Con­gress denounced Obama’s appeal for end­ing sub­si­dies and called on Obama to take fur­ther steps to expand oil pro­duc­tion in the United States.

“If some­one in the admin­is­tra­tion can show me that rais­ing taxes on Amer­i­can energy pro­duc­tion will lower gas prices and cre­ate jobs, then I will gladly dis­cuss it. But since nobody can, and the pres­i­dent doesn’t, this is merely an attempt to deflect from his failed poli­cies,” Sen­ate Minor­ity Leader Mitch McConnell said.

White House spokesman Jay Car­ney shot back that oil com­pa­nies are mak­ing big prof­its and “it doesn’t make sense for the tax­payer to cush­ion their already very robust bot­tom line.”

Obama went fur­ther than he has in the past in describ­ing how the global stand­off with Iran is dri­ving up the cost of gasoline.

“The biggest thing that’s caus­ing the price of oil to rise right now is insta­bil­ity in the Mid­dle East — this time it’s Iran,” Obama said. “A lot of folks are ner­vous about what might hap­pen there, so they are antic­i­pat­ing there might be a big dis­rup­tion in terms of flow.”

Obama has pre­vi­ously iden­ti­fied ten­sion with Iran as a main rea­son for ris­ing oil prices, but this time he ad-libbed the remark about how the prospect of a reduc­tion in the sup­ply of oil is mak­ing the mar­kets nervous.

The United States and its part­ners are try­ing to deter Iran from build­ing a nuclear weapon, includ­ing with an unprece­dented Euro­pean embargo on Iran­ian oil that takes effect this sum­mer. Iran has responded to tight­en­ing eco­nomic sanc­tions and the pos­si­bil­ity of an Israeli attack with threats to block oil ship­ments from the Per­sian Gulf.

On the pres­i­den­tial cam­paign trail, GOP front-runner Mitt Rom­ney and for­mer House Speaker Newt Gin­grich also decried Obama’s energy policies.

“He’s going to talk about how he’s respon­si­ble for the increas­ing pro­duc­tion of oil in this coun­try, oil and gas in this coun­try,” Rom­ney said in Fargo, N.D. “Is he respon­si­ble for the increase? No, I didn’t think so.”

Gin­grich, cam­paign­ing in Wood­stock, Ga., called on Obama to fire Energy Sec­re­tary Steven Chu, approve a Canada-Texas pipeline and open more of the Gulf of Mex­ico and Alaska to oil drilling.

“He ran in 2008 on the slo­gan, ‘Yes we can.’ He’s run­ning this year on the slo­gan ‘Why we couldn’t,’” Gin­grich said.

In choos­ing New Hamp­shire to deliver an energy mes­sage, Obama chose a state he eas­ily car­ried in 2008. He and his sur­ro­gates have paid par­tic­u­lar polit­i­cal atten­tion to the state in recent months. It offers only four elec­toral votes in the Novem­ber elec­tion, but Democ­rats have been eye­ing New Hamp­shire war­ily fol­low­ing its sharp shift to the right in the 2010 midterm elections.

How­ever, a poll con­ducted in New Hamp­shire in early Feb­ru­ary showed Obama beat­ing Rom­ney by 10 per­cent­age points in a hypo­thet­i­cal matchup. Other GOP pres­i­den­tial can­di­dates also trailed Obama in the WMUR Gran­ite State poll. It gave Obama an 8-point advan­tage over Texas Rep. Ron Paul, who is a favorite in libertarian-leaning New Hamp­shire, and an advan­tage of more than 20 points over both Gin­grich and Santorum.

Posted by AP News on Mar 1 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.