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President Obama leads call to end oil subsidies

March 29, 2012|By Christi Parsons and Lisa Mascaro
  • President Obama speaks in the Rose Garden of the White House in Washington to urge Congress to eliminate tax breaks for oil and gas companies.
President Obama speaks in the Rose Garden of the White House in Washington… (Charles Dharapak / AP Photo )

Washington — President Obama on Thursday morning urged Congress to “stand with the American people” by voting to end subsidies to oil companies.

“Right now, the biggest oil companies are raking in record profits,” Obama said. “On top of these record profits, oil companies are also getting billions a year in taxpayer subsidies.”

Members of Congress can either “stand with the big oil companies,” Obama said, “or they can stand with the American people.”

The appearance in the Rose Garden came minutes ahead of a procedural vote in the Senate on a bill to repeal oil subsidies.

The three largest U.S. oil companies made a total profit exceeding $80 billion at a time when, White House aides point out, middle-class families are struggling to pay high gas prices.

The bill is expected to fail, as the president’s party is divided on the issue of oil company tax breaks. Democrats from oil-rich states are skeptical of the proposal.

But Republicans immediately fired back at the president, noting that he has spoken in favor of tax cuts for American manufacturers.

“I know this sounds crazy, but you can’t raise taxes on American energy manufacturers and give them a bigger tax cut like the president said he wants to do,” said Don Stewart, a spokesman for Senate Republican leader Mitch McConnell of Kentucky.

Some lawmakers said the oil companies are making substantial profits, and thus don’t need federal help.

Sen. Robert Menendez (D-N.J.), the bill’s author, says he welcomes the debate because the votes will draw a contrast between the parties.

But others say cutting the subsidies would hinder domestic oil production. The legislation would apply to the big-five companies: BP, Exxon, Shell, Chevron and ConocoPhillips.

“High energy prices are part of President Obama’s plan,” said Rep. John Cornyn (R-Texas), the chairman of the GOP’s campaign arm in the Senate.

As the vote opened in the Senate, Obama predicted that Americans would be paying attention to the vote.

“American oil is booming,” Obama said. “That’s why I think it’s time they got by without more help from the taxpayers, who are already having a tough enough time paying the bills and filling up their gas tanks.”

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