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Boehner opens door to cutting U.S. oil tax breaks

By Reuters
Tuesday, April 26, 2011 8:47 EDT
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WASHINGTON (Reuters) – Congress should consider cutting multibillion-dollar subsidies to oil companies amid rising concern over skyrocketing gas prices, House of Representatives Speaker John Boehner said on Monday.

“It’s certainly something we should be looking at,” Boehner said in an ABC News interview. “We’re in a time when the federal government’s short on revenues. They ought to be paying their fair share.”

“Everybody wants to go after the oil companies and frankly, they’ve got some part of this to blame,” he said.

But Boehner said he also wanted to “see all the facts” first.

Boehner’s remarks echoed concerns expressed this month by President Barack Obama, who asked Congress to repeal $3.6 billion in annual oil, natural gas and coal subsidies, a move that would total $46.2 billion over a decade and help pay for clean energy initiatives.

But Boehner’s comments go against Republican orthodoxy because the party traditionally is very supportive of the oil and gas industry and rejects most policies that would raise the costs of domestic energy production.

Boehner also suggested that Obama could lose the 2012 election if gas prices do not decline.

Rising fuel prices are a persistent concern for the White House, which is worried about their impact on the economy as Obama mounts his run for re-election.

A New York Times-CBS News poll found that 70 percent of Americans believe the country is on the wrong track and analysts believe gas prices are a main reason for this.

The Obama administration tried unsuccessfully during the last Congress to cut tax breaks and subsidies for fossil fuels.

The attempt to end the subsidies has been strongly condemned by oil and gas companies, which argue that abolishing the tax breaks would reduce domestic drilling, cost jobs and increase U.S. reliance on foreign energy suppliers.

“This is a tired old argument we’ve been hearing for two years now. If the president were serious about job creation, he would be working with us to develop American oil and gas by American workers for American consumers,” the American Petroleum Institute’s chief economist John Felmy said.

Unrest in the Middle East has pushed crude oil prices above $110 a barrel. U.S. retail gasoline prices hit $3.88 a gallon over the last week, the highest level since the summer of 2008 when prices reached a record $4.11 a gallon, the Energy Departmentsaid on Monday.

Asked who the American people should blame for high gas prices, Boehner pointed the finger at Obama and said the president won’t win re-election of gas prices are “$5 or $6″ a gallon.

(Reporting by JoAnne Allen and Ayesha Rascoe; Editing by Eric Walsh)

Source: Reuters US Online Report Politics News

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