Responding to remarks from House Speaker John Boehner, whothat he could be open to cutting subsidies to gas and oil companies, President Obama sent a letter to the leaders of Congress today urging them to take "immediate action to eliminate unwarranted tax breaks for the oil and gas industry." Mr. Obama said he was "heartened" to hear Boehner's position on the issue.
"Our political system has for too long avoided and ignored this important step, and I hope we can come together in a bipartisan manner to get it done," Mr. Obama wrote to Boehner, House Minority Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell.
As Republicans have compelled Congress tohistoric spending cuts, Democrats have persistently complained that the cuts are unwarranted while the oil and gas industry continues to benefit from large subsidies. "Will we stand with big oil or big bird?" Democratic Rep. Ed Markey earlier this year, referring to the GOP's interest in cutting funding for the Corporation for Public Broadcasting.
In an interview with ABC News yesterday, Boehner said that oil and gas companies are "gonna pay their fair share in taxes - and they should." However, he added that some small, independent oil and gas producers could need subsidies as an incentive to pursue more domestic production.
Boehner argued that Mr. Obama is disproportionately focused on cultivating alternative sources of energy and is "not doing anything to make the situation better" regarding sky-high gas prices.
In his letter today, Mr. Obama said, "While there is no silver bullet to address rising gas prices in the short term, there are steps we can take to ensure the American people don't fall victim to skyrocketing gas prices over the long term."
As the president pointed out in his letter, the oil and gas industry receives about $4 billion in subsidies per year, even as the industry continues to bring in profits. Oilfield services giant Halliburton announced earlier this month that its first quarter results set a company record of $5.3 billion in overall revenue.
Mr. Obama said that the subsidies given to oil companies should be invested in alternative energy. In addition, he called for a comprehensive energy strategy. Without one, he said, "we will stay stuck in the same old pattern of heated political rhetoric when [gas] prices rise and apathy and neglect when they fall again."
He summarized his ideas for an energy strategy, which include investing in a range of energy sources from domestic oil to wind, solar, biofuels and natural gas. He also called for "doubling down on fuel efficiency in the transportation sector."
Brendan Buck, a spokesperson for Boehner, said in response to Mr. Obama's letter that the president's suggestions "would simply raise taxes and increase the price at the pump."
"The speaker wants to increase the supply of American energy and reduce our dependence on foreign oil, and he is only interested in reforms that actually lower energy costs and create American jobs," Buck said.
With gas prices nationwide averaging close to $4 per gallon, Mr. Obama last weekthat the U.S. attorney general is creating a task force to root out any cases of fraud or manipulation in the oil and gas markets that might affect gas prices.