House Speaker John Boehner says oil companies should 'pay their fair share in taxes'
Louisiana lawmakers repeated their objections Tuesday to any new taxes or reduced subsidies for the oil and gas industry after House Speaker John Boehner, R-Ohio, said he is open to the idea.
View full sizeHouse Speaker John Boehner, R-Ohio"Whether its proposed by President Obama or Speaker Boehner, I will strongly fight against any attempt to raise billions of dollars in new taxes on American energy exploration, particularly at a time when President Obama's policies have led to skyrocketing gas prices and have run more than 12,000 jobs out of the U.S. while making our country more dependent on Middle Eastern oil," Rep. Steve Scalise, R-Jefferson, said.
Sen. Mary Landrieu, D-La., was just as adamant.
"Can't we find better ways to raise revenue than pursue policies that stunt domestic production, raise gas prices and put people out of work?" Landrieu asked.
In a Monday night interview with ABC News Boehner said oil companies should "pay their fair share in taxes," and that perhaps the oil depletion allowance ought to be the first industry benefit eliminated.
Less than 24 hours after Boehner spoke, President Barack Obama welcomed the speaker's comments.
"I was heartened that Speaker Boehner yesterday expressed openness to eliminate those tax subsidies for the oil and gas industry," Obama said in a letter to congressional leaders, including Boehner. "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."
But by the time the White House released the letter, Boehner staff had already pulled back from his comments on ABC.
"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," Boehner spokesman Michael Steele said.
The president has said that with high energy prices, the industry no longer needs incentives to develop domestic oil resources.
Sen. David Vitter, R-La., said he isn't necessarily opposed to eliminating tax subsidies, but only if the "resulting revenue" -- pegged in the billions of dollars per year just for the oil and gas tax breaks -- is used to lower all tax rates.
But Sen. Bernard Sanders, I-D, Vt., said that Vitter and other Republicans will have a hard time convincing Americans that money saved from cutting subsidies should go entirely to lowering tax rates.
"I think we want to do away with these loopholes, raise revenue, use it for deficit reduction, instead of slashing Medicare and Medicaid and Social Security," Sanders said.
Obama, however, said the $4 billion per year his staff projects could be saved by eliminating oil and gas tax subsidies should be invested in clean energy to reduce dependence on foreign oil without sacrificing domestic oil production.
"In fact, in the past CEOs of the major oil companies made it clear that high oil prices provide more than enough profit motive to invest in domestic exploration and production without special tax breaks," Obama said in his letter.
Democrats are betting that American anger over high gas prices, combined with what are likely to be reports this week of historically high profits for the major oil companies, will help generate support for ending subsidies for an industry that could avert some of the deepest cuts in domestic programs advanced by Republicans.
John Felmy, chief economist for the American Petroleum Institute, said it is wrong to suggest the industry is heavily subsidized when it provides $95 million a day in taxes, royalties, bonus bids and other fees to the government.
"This is a proposal borne of desperation that would do nothing to reduce gasoline prices," Felmy said of the latest White House proposal to trim back oil and gas subsidies.
Rep. Charles Boustany, R-Lafayette, wrote to Boehner Tuesday asking him to fight Obama administration proposals that would increase costs for the oil and gas industry.
"I am deeply concerned that the Obama administration continues to advocate raising taxes on American energy producers during a period in which Gulf of Mexico drilling and permitting is still being delayed by unnecessary bureaucratic demands and uncertainty," Boustany wrote the speaker.
Bruce Alpert can be reached at balpert@timespicayune.com or 202.857.5131.