Gas nozzle used pump petrol station in New York 22 February, 2011.
Credit: Reuters/Shannon StapletonBy Alister BullWASHINGTON | Wed May 26, 2010 4: 15 pm EDT
WASHINGTON (Reuters)-President Barack Obama on Tuesday urged Congress to immediately end tax breaks for oil and gas companies, seeking to deflect public anger over high gasoline prices that hurts its popularity among voters.
US gasoline prices have become a sensitive political issue after pushing toward $ 4 gallon nationally, and higher in some cities, spurred by the soaring global price of crude oil amid turmoil in the Middle East and North Africa.
The President, in a letter to leaders of Congress released by the White House welcomed what he called bipartisan support for the closure of tax exemptions.
But Republicans, who feel rising gas prices could help Obama win the election in 2012, said it will "raise taxes and increase in the price at the pump."
Opposition to this approach of Obama appeared at odds with a slide from the top Republican in the House of representatives, speaker John Boehner on Monday.
Some energy analysts also appeared unimpressed by Obama's latest move.
"Obama has said there is no silver bullet to push down gasoline prices in the short term, but now it appears that this arrest in limit tubes in the last two days to find policies to do the trick," said Matt Smith, an analyst at the energy summit in Kentucky.
White House economic adviser Gene Sperling said that billions of dollars being used to subsidize the oil and gas companies could be used instead to reduce ballooning u.s. deficit
"In this kind of tax time, you need to ask yourself if that 4 billion dollars worth the taxpayer spending," he said, "compared with using some of them perhaps for deficit reduction and some ... in the areas that could lead us to a brighter and safer and cleaner energy future. "
Meanwhile, the U.S. Attorney General Eric Holder, told reporters he saw "disturbing" things in the energy markets. He said that it supported the formation of a task force unveiled last week to detect possible fraud and manipulation of gasoline prices.
"There are at least two things that are worrying, and I think we'll look at them," holder told reporters when asked if he believed that people illegally manipulating the market. He refused to recognise's concerns.
A poll Washington Post-ABC News Tuesday found that 71% of respondents said gasoline prices cause serious economic difficulties, while 55 percent disapproved of the way Obama is handling his job as President.
The proposals of the White House rejected Obama's letter was designed to deflect as the gas away from the President and to oil companies, which has pointed out repeatedly made huge profits, and still continue to enjoy tax subsidies.
"Don't look at this as a matter of electoral politics in 18 months," White House Press Secretary Jay Carney said.
BOEHNER FORCED?
Obama, repeating a line he has developed several times in the two annual budget proposals, said more than 4 billion dollars saved by closing the tax breaks could be invested in clean energy will help to ease the dependence on the US foreign oil.
With a nod towards the economic anxiety of many Americans still feel amid high unemployment still-US--which is sure to be much hope of re-election in 2012--Obama energy companies involved in the recovery of the country.
"If sustained, such high prices have the potential to slow the growth of our economy, at the very moment when it should be accelerated," Obama said in the letter.
The proposed revenue diversion repeatedly saved from closure of tax credits for clean energy investments and highlights the issue as part of his response to fuel prices.
Boehner said on Monday that Congress might consider cutting multibillion dollar tax subsidies for oil companies. Obama pounced as welcome evidence of bipartisan support.
"It was encouraging that Boehner speaker yesterday expressed openness to remove these tax subsidies for oil and gas industry. Our political system for far too long avoided and ignored this important step, and I hope to come together in a bipartisan way to do it, "Obama said.
However, a spokesman for Boehner said the Democratic leader said simply it could consider the facts.
"The speaker wants to increase the supply of American energy and reduce our dependence on foreign oil, and he cares only for reforms that lower energy costs and create American jobs," said Brendan Buck. "Unfortunately, what the President has proposed so far will simply raise taxes and increase in the price at the pump."
(Additional reporting by Jeff Mason, Steve Holland, Tim Gardner and Jeremy Pelofsky. Edit by Jackie Frank)
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