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Senate Thwarts Obama Bid to End Oil/Gas Subsidies

Senate Thwarts Obama Bid to End Oil/Gas Subsidies

By Alexis Simendinger - March 29, 2012

President Obama and the Democratic majority in the Senate tried Thursday to use tax benefits enjoyed by oil and gas companies as a partisan weapon against the sting of rising gasoline prices.

It didn’t quite work -- the Senate, with help from four Democrats, defeated a procedural measure aimed at ending the tax benefits -- but the president and his congressional allies argued with gusto that big oil companies and the Republicans who support them are hurting American consumers.

During an election year in which the president is trying to define stark contrasts with Mitt Romney and other GOP challengers, Republican support for the oil and gas industry fits that script.

Obama’s lead pollster and senior strategist Joel Benenson told reporters Thursday that to appeal to voters who believe they’ve been especially hurt during the recession, the president needs to tie Republicans to lucrative benefits for the oil industry, and advocate for tax fairness and new investments in manufacturing and high-tech jobs.

As for the price of gasoline, he said, voters are "going to want a real answer. They’re not going to want some glib, gimmick approach that’s going to promise them something they know they’re not going to get, which is long-term stability on what they pay for gas.” 

Those themes filled the Rose Garden on Thursday during a brief Obama speech delivered an hour before the Senate failed to muster enough votes to advance his position.

The Senate, by a vote of 51-47, failed to invoke cloture on the bill, which would have repealed certain oil and gas tax subsidies and tapped the revenues to pay for expired and expiring tax breaks for renewable and alternative energy sources, energy efficiency and mine safety training equipment. Sixty votes were needed to end debate.

While Democratic Sens. Mark Begich of Alaska, Mary Landrieu of Louisiana, Ben Nelson of Nebraska, and Jim Webb of Virginia ignored the president’s appeal, Maine’s Republican Sens. Susan Collins and Olympia Snowe crossed the aisle to try to advance the measure.

“The oil industry is doing just fine,” Obama said at the White House before the bill died. “That’s why I think it’s time they got by without more help from taxpayers who are already having a tough enough time paying the bills and filling up their gas tank. And I think it’s curious that some folks in Congress, who are the first to belittle investments in new sources of energy, are the ones that are fighting the hardest to maintain these giveaways for the oil companies.”

In particular, the president trained a spotlight on Exxon Mobil, noting that the company is now awash in nearly $4.7 million in profits every hour.

Although White House officials conceded early this month that there is no direct and immediate linkage between ending oil company tax subsidies and reducing gasoline prices, the president nonetheless tried to blend company profits, petroleum market speculation, and pump prices into the same populist message.

“When the price of oil goes up, prices at the pump go up, and so do these companies’ profits,” Obama said. “In fact, one analysis shows that every time gas goes up by a penny, these companies usually pocket another $200 million in quarterly profits. Meanwhile, these companies pay a lower tax rate than most other companies on their investments, partly because we’re giving them billions in tax giveaways every year.”

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Alexis Simendinger covers the White House for RealClearPolitics. She can be reached at asimendinger@realclearpolitics.com. Follow her on Twitter @ASimendinger.

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