Obama’s Targets GOP Divisions On Oil Subsidies

Ron Sachs

President Obama knows all too well what it’s like to feel the wrath of rankling his base by embracing compromise with Republicans on one of their ideological positions. That’s why he didn’t hesitate when House Speaker John Boehner (R-OH) appeared to open the door — just a crack — to the idea of ending payments to oil companies in an interview with ABC News released Monday afternoon.

Boehner’s office spent all day dialing back the bosses’ comments.

“We have pointed out for years that raising costs for energy producers will raise costs for consumers,” Boehner spokesman Michael Steel told TPM. “And we want to ‘take a look’ at anything that lowers gas prices – but the President’s proposal won’t do that.”

But the damage was already done and the rest of the GOP leadership team was forced to quickly putty over any cracks appearing on the surface — real or perceived — while Obama did his best to exploit any divisions.Obama sent a letter to Boehner Tuesday saying the newfound openness to ending tax benefits for big oil had “heartened” him, and he hoped Republicans and Democrats could get it done as soon as possible.

The White House continued to hammer Republicans on the issue throughout the afternoon, recognizing that that gas prices will be a hot-button issue during the campaign this year and next if prices remain high.

“Big Oil have record profits this year — proof they don’t need $4 B in tax subsidies while GOP wants to cut clean energy,” Dan Pfeiffer, Obama’s top communications aide, tweeted Tuesday afternoon.

Taxpayer groups are piling on, sending their own letters to Boehner, congratulating him on the bold move.

“In an interview with ABC News, you stated that oil companies ‘ought to be paying their fair share,'” wrote Ryan Alexander, president of Taxpayers for Common Sense. “We agree.”

Behind the scenes, GOP leaders scrambled to flat-out deny any chance of the House Republicans supporting an effort to end tax subsidies on big oil. Oil companies would simply pass the tax increase on to consumers, and that’s exactly what the government shouldn’t do right now with gas prices skyrocketing, one senior House GOP leadership aide told TPM in an e-mail.

“There is no current plan to raise taxes on production when it is clear that those increases in cost will be passed on directly to American families,” he said.

A spokesman for Majority Leader Eric Cantor (R-VA) said Boehner’s office is disputing ABC’s characterization of his comments and pointed to his boss’s most recent statements about tax reform and closing tax loopholes made during an April 13 appearance on MSNBC’s Morning Joe.

While Cantor said both Republicans and Democrats have succumbed to “special-interest” pressure in Washington and achieved certain “benefits,” he told host Joe Scarborough right now we need “to be for everyone” by simplifying the tax code and bringing down rates.

Senate Majority Leader Mitch McConnell (R-KY) quickly also distanced himself from any perceived openness to curbing oil subsidies among the House GOP.

“If someone in the administration can show me that raising taxes on American energy production will lower gas prices and create jobs, then I will gladly discuss it. But since nobody can, and the President’s letter to Congress today doesn’t, this is merely an attempt to deflect from the policies of the past two years,” he said in a release.

McConnell slammed Obama’s support for jettisoning the tax breaks for oil companies, calling it “as predictable as it is counterproductive.”