US President Barack Obama pressed lawmakers Thursday to cut tax breaks for the petroleum sector, saying they can “stand with big oil companies, or they can stand with the American people.”
Obama, under pressure in an election year over a surge in fuel costs, said the nation cannot afford the subsidies at a time of record budget deficits.
“The biggest oil companies are raking in record profits – profits that go up every time folks pull into a gas station,” Obama said at a White House ceremony with representatives from energy, business and environmental groups.
“But on top of these record profits, oil companies are also getting billions a year in taxpayer subsidies — a subsidy they’ve enjoyed year after year for the last century.”
He said the tax breaks and subsidies are “hitting the American people twice. You’re already paying a premium at the pump right now. And on top of that, Congress thinks it’s a good idea to send billions more of your tax dollars to the oil industry.”
Obama is blamed by Republicans for doing too little to encourage domestic oil production, but the president argues that more drilling will not bring down prices.
“Instead of taxpayer giveaways to an industry that’s never been more profitable, we should be using that money to double-down on investments in clean energy technologies that have never been more promising,” Obama said.
“Investments in wind power and solar power and biofuels; in fuel-efficient cars and trucks and homes and buildings — that’s the future. That’s the only way we’ll break this cycle of high gas prices that happens year after year after year.”
But Republicans quickly responded that Obama is out of touch with the problems of Americans and that his actions would be an effective tax increase.
“As smart as he is, the president still doesn’t grasp the difference between a subsidy and a true business expense,” Texas Republican Representative Kevin Brady said.
“Raising taxes on our energy manufacturers — and make no mistake this is what he’s calling for — will only mean less American-made energy, fewer American jobs and more expensive fuel at the pump. No wonder the Obama economy continues to struggle.”
Obama repeated his view that the United States should pursue a variety of energy initiatives — a so-called “all-of-the-above” policy which includes oil and many alternative sources.
“I want us to forge our own future,” he said.
“So as long as I’m president, America will pursue an all-of-the-above energy strategy, which means we will continue developing our oil and gas resources in a robust and responsible way, but it also means we’re going to keep developing more advanced homegrown biofuels.
Obama spoke with a proposal by New Jersey Democratic Senator Robert Menendez up for a vote as early as Thursday to strip tax breaks from major oil firms.
Senate Republican leader Mitch McConnell said Wednesday that the plan would offer no relief for Americans hurt by rising gasoline prices — which have hit around $4 per gallon.
“Gas prices have more than doubled under President Obama and the Democrat-controlled Senate,” McConnell said.
“At a time when gas prices are at a national average of nearly $4 a gallon, this is what passes for a response to high gas prices for Washington Democrats — a bill that does nothing about it… because they’ve got nothing — nothing but a phony proposal aimed at distracting people from the fact that they have nothing to offer.”