- The Washington Times - Tuesday, April 26, 2011

Seizing on comments from Republican House Speaker John A. Boehner a day earlier, President Obama urged Congress Tuesday to end “unwarranted” tax breaks to big oil and gas companies and to invest the savings in alternative-energy sources.

Mr. Obama’s comments came a day after Mr. Boehner suggested a willingness to consider ending some subsidies to the oil industry, but the president’s offer was quickly rebuffed by leading congressional Republicans.

The president, in a letter to congressional leaders, said that “our outdated tax laws” have provided the oil and gas industry more than $4 billion per year in subsidies “even though oil prices are high and the industry is projected to report outsized profits this quarter.”

“We simply can’t afford these wasteful subsidies,” he said.

The letter was addressed to Mr. Boehner and Senate Minority Leader Mitch McConnell, Kentucky Republican, and House Minority Leader Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada, both Democrats.

The quick rejection by GOP leaders reflects in part the potency of gas-pump prices as a political issue for both parties. The national average for a gallon of gasoline on Monday was $3.88  up more than $1 from the same time last year, according to the U.S. Energy Information Administration. California recorded some of the highest prices in the nation, with the state average at $4.22 a gallon.

Mr. Boehner’s office on Tuesday partially walked back the speaker’s comments from a day earlier, saying the Ohio Republican only was interested in tax reforms that “actually lower energy costs and create American jobs” while claiming Mr. Obama’s offer would mean higher taxes and high fuel bills.

“The speaker wants to increase the supply of American energy and reduce our dependence on foreign oil,” Boehner spokesman Brendan Buck said. “Unfortunately, what the president has suggested so far would simply raise taxes and increase the price at the pump.”

Mr. McConnell went a step further, calling Mr. Obama’s letter as “predictable as it is counterproductive” and saying it was “merely an attempt to deflect from the policies of the past two years.”

“Instead of returning again and again to tax hikes that increase consumers’ costs, the administration and its Democrat allies in Congress should open their eyes to the vast energy resources we have right here at home,” the Kentucky Republican said. “If the president were truly serious about lowering the price of gas at the pump, he would open these areas to development.”

In his offer, Mr. Obama said while there is “no silver bullet” to address rising gas prices in the short term, an important long-term step would be to eliminate tax breaks for the oil and gas industries and to invest the money for domestic “clean energy” sources that would reduce the nation’s dependency on foreign oil.

White House press secretary Jay Carney told reporters Tuesday that ending oil and gas tax breaks wouldn’t necessary lead to an immediate decrease in the price of gas at the jump.

But Mr. Carney added such action would “create a situation where we have the right policies in place and the right diversity of energy sources so that we are insulated from these kind of price shocks in the future.”

Mr. Obama’s comments appear to have been sparked at least in part by an interview Mr. Boehner gave ABC News on Monday, in which he accused the president of not doing enough to help lower gasoline prices.

But the speaker added oil companies also are to blame and that ending federal subsidies for the industry is “certainly something we should be looking at.”

Mr. Obama and his fellow Democrats were quick to highlight Mr. Boehner’s comments. The president, in his letter, said he was “heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies.”

And Sen. Charles E. Schumer of New York, the point man for Senate Democrats’ communication efforts, said the speaker’s words were “almost too good to be true.”

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