Obama: Congress should end oil subsidies

UPDATED 12:29 p.m. ET

(CBS News) -- President Obama on Thursday urged Congress to drop billions of dollars in tax breaks that amount to subsidies for the largest oil firms operating in the United States, which he noted were showing record profits as millions of Americans watch rising gas prices strain their household budgets.

"I think it is time they got by without more help from taxpayers," Mr. Obama said in remarks in the White House Rose Garden, "the oil industry is doing just fine."

Mr. Obama's push came minutes before the Senate voted down a bill that would have repealed the subsidies.

With strong opposition from Republicans, New Jersey Democratic Sen. Robert Menendez was only able to get 50 additional senators to agree to back his legislation. 60 votes were needed for approval. Maine Sen. Olympia Snowe was the only Republican to back the bill, while four Democrats voted against the measure, including Alaska Sen. Mark Begich, Louisiana Sen. Mary Landrieu, Nebraska Sen. Ben Nelson and Virginia Sen. Jim Webb.

Rising gas prices are a major concern at the White House and in Chicago, where Mr. Obama's campaign is preparing for a fight to the finish with the Republican nominee for president.

Republicans oppose ending the tax breaks and note that any increase in the price of production of any given item is likely to result in higher prices down the line, in this case at the pump.

The president cast the issue as taxpayers paying the oil companies twice.

Had it been approved, the Menendez bill would have repealed about $24 billion over a decade in tax breaks extended to ExxonMobil, Chevron, BP, ConocoPhillips and Royal Dutch Shell.

About half the money would have been used to pay down the deficit and the other half would be used to spur renewable energy production and promote energy efficiency.

"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," Mr. 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," the president said.

Additional reporting by CBS News Senate producer John Nolen.