Senate rejects Obama demand for end to oil tax breaks

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President Obama on Thursday called for Congress to jettison $4 billion in annual subsidies to oil and gas companies, but minutes later the Senate blocked just such a proposal.

The 51-47 vote, which fell nine shy of the 60 needed to advance in the Senate, likely shelves the plan for this year, but gives both parties a political issue heading into November’s elections.

Mr. Obama, in a Rose Garden speech, said the oil subsidies should be cut so the money can be put into his priorities.

“We should be using that money to double down on clean-energy technologies that have never been more promising,” Mr. Obama said. “That’s the future. That’s the only way we’re going to break this cycle of high gas prices year after year after year.”

Republicans, though, said eliminating the subsidies amounts to a tax increase on oil and gas companies, which they will pass on to consumers in the form of higher prices.

“President Obama will say and do anything it takes to get reelected even if it means doing a Rose Garden photo-op to pretend increasing energy taxes will lower gas prices,” said Republican National Committee spokeswoman Kirsten Kukowski. “This is just more smoke and mirrors from a president who doesn’t have an energy policy while Americans struggle to pay higher gas prices at the pump.”

In a speech on the Senate floor, Minority Leader Mitch McConnell, Kentucky Republican, said eliminating the tax breaks would not lower prices at the pump — and ridiculed Democrats for trying to put off a vote earlier this week and move to a postal service overhaul instead.

“I see the president made a statement a little while ago in support of this proposed tax hike. My question is: where was the White House when Democrats voted to get off of it?” Mr. McConnell asked. “Maybe they were too busy lining up votes against the Keystone pipeline. Maybe the president was too busy telling the Russians about how he’s hoping for more flexibility.”

Mr. McConnell was referring to the president’s lobbying against a bill that would have forced him to approve the northern section of the Keystone XL oil pipeline from Canada to Oklahoma, as well as a hot mic incident from earlier this week when Mr. Obama told Russian President Medvedev that he needed more “flexibility” on missile defense and some “space” during an election year.

The Senate vote actually showed support is slipping for Mr. Obama’s position. A similar vote in the Senate last year earned 52 votes in favor of it, while this year it garnered just 51.

Sen. James Webb, Virginia Democrat, changed his stance, joining three other Democrats in voting to preserve the tax breaks.

Two Republicans — Maine Sens. Olympia J. Snowe and Susan Collins — voted with most Democrats to eliminate the tax breaks.

During the Rose Garden speech, Mr. Obama said Americans should have little sympathy for biggest U.S. oil companies and the money would be better spent on a long-term approach to American energy independence.

“It’s not like these are companies that can’t stand on their own,” Mr. Obama said. “Last year, the three biggest U.S. oil companies took home more than $80 billion in profits. Exxon pocketed nearly $4.7 million every hour. And when the price of oil goes up, prices at the pump go up, and so do these companies’ profits.”

White House spokesman Jay Carney called the Senate vote “unfortunate” but said it would not deter the president from continuing to press the case for getting rid of the subsidies.

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