Tax

Obama urges repeal of oil, gas tax breaks

Reuters News
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Posted: May 04, 2011 9:41 AM

WASHINGTON (Reuters) - President Barack Obama, acknowledging high gasoline prices could sap the U.S. economy, Tuesday urged Congress to end tax breaks for oil and gas companies and called on Republicans to back his plan.

But Republicans said the plan would "raise taxes and increase the price at the pump," indicating they opposed such action.

Obama said the dollars saved by closing the tax breaks could be invested in clean energy that would help to ease U.S. dependence on foreign oil.

This highlights an ongoing White House strategy to combat lofty gasoline prices that are worrying Americans and could dent his 2012 presidential re-election hopes.

"If sustained, these high prices have the potential to slow down the pace of our economy's growth at precisely the moment when we need to be accelerating it," Obama said in a letter to congressional leaders released by the White House.

Obama has repeatedly suggested diverting revenue saved from closing the tax breaks to clean energy investment, and stresses the issue as part of his response to fuel prices as the cost of gasoline pushed toward $4 a gallon and higher in some cities.

Republican Speaker of the House of Representatives John Boehner said Monday that Congress could look at cutting multi-billion dollar tax subsidies to oil companies. Obama pounced on this as welcome evidence of bipartisan support.

"I was heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies for the oil and gas industry. 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," Obama said.

However, a Boehner spokesman said the congressman had simply said he would look at the facts.

"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," said Brendan Buck. "Unfortunately, what the President has suggested so far would simply raise taxes and increase the price at the pump."

(Reporting by Alister Bull; Editing by Vicki Allen)