Obama, Republicans spar over gasoline prices

Reuters News
Posted: Mar 01, 2012 1:33 PM
Obama, Republicans spar over gasoline prices

By Alister Bull

NASHUA, New Hampshire (Reuters) - Facing intensifying election-year attacks over rising energy prices, President Barack Obama will seek on Thursday to shift the spotlight onto oil and gas companies by calling for the repeal of tax breaks that benefit the industry.

Republicans hope to use the energy issue to deny the Democratic president a second term, and Obama plans to push back on that criticism during a trip to Republican White House candidate Mitt Romney's backyard of New Hampshire.

Previewing Obama's speech in Nashua, White House spokesman Jay Carney said the president would emphasize there are no quick fixes for the pain at the gasoline pump.

But Carney said that Obama would criticize the Republican approach of providing incentives to encourage greater domestic production of energy supplies.

"If oil and gas subsidies were the answer to our energy challenges, they haven't worked," White House spokesman Jay Carney told reporters traveling with Obama to New Hampshire. "They are not the answer."

White House officials said Obama would use the New Hampshire speech to repeat his call for the repeal of $4 billion in annual tax breaks for oil and gas firms.

Obama rejected the Keystone XL pipeline, which was to transport Canadian oil through environmentally sensitive areas of Nebraska on the way to the Gulf of Mexico.

On Monday, the White House said it welcomed a fresh proposal by TransCanada to build a southern leg of the pipeline and refile an application for the northern part of the route, including the U.S.-Canada border crossing.


With the U.S. economy on the mend, rising gasoline prices are a threat to Obama's re-election on November 6.

Many leading Democrats in the U.S. Congress have pushed for a release from the emergency oil supply known as the Strategic Petroleum Reserve (SPR) to alleviate the gasoline price problem.

Republicans in Congress generally oppose removing oil from the reserve to try to push down prices.

The White House has avoided commenting on the issue. On Thursday, House of Representatives Speaker John Boehner, the top Republican in Congress, told reporters it did not appear to him "that the president believes using SPR would have any meaningful effect on gas prices."

The average retail price of gasoline is $3.74-per-gallon, up from $3.39 a year ago, according to the American Automobile Association. The combination of rising political tensions in the oil-rich Middle East and the onset of the higher-demand U.S. summer driving season could push gasoline prices significantly higher in coming weeks.


Republicans complain the president has hobbled domestic oil exploration and dismiss his administration's observation that U.S. oil output is at a record high, arguing this was thanks to the action of his Republican predecessor, George W. Bush.

In a blog post, Obama adviser Dan Pfeiffer pointed to figures showing that since 2008, domestic production of oil and gas has risen each year, with crude oil output reaching its highest level in eight years in 2011.

Romney, speaking in Fargo, North Dakota, accused Obama of trying to "blow one past folks" with his argument about increased domestic production and said the administration does not deserve credit for that.

"Far from taking credit, he should be hanging his head and taking a little bit of the blame for what's going on today," Romney said.

While Obama has sought to put Republicans on the defensive through his call for ending tax code provisions that benefit the oil and gas industries, Republicans counter that such changes should be weighed as part of a broad rewrite of the tax code.

Obama's visit to Nashua Community College is his second trip in three months to New Hampshire, where Romney - the former governor of neighboring Massachusetts - is expected to be a tough competitor if he wins the nomination to face Obama in November.

Romney owns a home on Lake Winnipesaukee in New Hampshire. In January, Romney racked up a strong win in the Republican primary in New Hampshire, helping to give his campaign momentum.

"The primary results here indicate that Romney will give the president a fight in this purple state," said Linda Fowler, a professor of government at Dartmouth College, who saw the economy as the big focus of the campaign, rather than social or cultural issues. So-called purple states are those that could back either a Republican or a Democratic candidate.

Wins over Republican rival Rick Santorum in Michigan and Arizona on Tuesday helped Romney reassert his front-runner status for his party's presidential nomination.

In New Hampshire, polls place Romney within range of Obama in a November match-up, even though the president carried the state in 2008. A still-sluggish economic recovery and historically high unemployment have weighed on Obama's support.

"Independents are the key. They went for Democrats in 2006-08, but shifted to the GOP (Republicans) in 2010," said Fowler, referring to the mid-term congressional elections in which Democrats sustained heavy losses.

(Additional reporting by Caren Bohan, Richard Cowan and Samson Reiny in Washington and Sam Youngman in Fargo, North Dakota; Editing by Will Dunham)