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Dems' Oil Subsidy Repeal Push Puts GOP On Defensive

First Posted: 04/27/11 07:24 PM ET Updated: 06/27/11 06:12 AM ET

Harry Reid
Reid reaches out to Republicans for help in cutting oil subsidies.

WASHINGTON -- Democrats are gleefully charging ahead with a proposal to end multi-billion-dollar oil and gas subsidies, seeing an opportunity to redirect the public’s ire over gas prices from the White House to Big Oil and its loyal Republican backers.

On Wednesday, Senate Majority Leader Harry Reid (D-Nev.) vowed to set up an early vote on the issue. His decision comes one day after President Barack Obama called for "immediate action to eliminate unwarranted tax breaks for the oil and gas industry, and to use those dollars to invest in clean energy to reduce our dependence on foreign oil."

“I think he's right,” Reid said of Obama’s letter to congressional leaders. “We need to take away the subsidies of these five major oil companies. We have to do that as quickly as we can. I'm going to try to get it done as soon as I can do it procedurally in the Senate here."

"There's no necessity for these subsidies. The companies have broken all records for profits,” Reid said in a conference call with reporters. "They do quite well without the subsidies.”

So far, at least, the battle is all about optics. The oil industry’s prodigious lobbying and campaign spending give it such a firm grip on Republicans -- and some Democrats -- that their subsidies were perfectly safe even when Democrats controlled both houses. Indeed, the president proposed cutting oil subsidies in his previous two budgets as well, but the Senate never brought his provisions to a vote.

But House Speaker John Boehner (R-Ohio) gave Democrats an opening too delightful to pass up on Monday night when, under interrogation by ABC News reporter Jonathan Karl, he conceded that the subsidies were "certainly something we should be looking at" and that oil companies "ought to be paying their fair share.”

The White House pounced on Boehner's comments, which his staff immediately sought to correct.

Even as Republicans made clear that their party line remains the same -- and that they consider repealing subsidies a tax increase by another name -- Democrats and environmental groups joined the chorus calling to end the fossil fuel industry handouts.

Now there’s even some talk that the imaginable might actually happen.

Rep. Earl Blumenauer (D-Ore.) on Wednesday called on Boehner to hold an up-or-down vote on a Democratic bill that would repeal even more subsidies than Obama is calling for. It would recoup some $8 billion a year in tax breaks from oil and gas companies.

"I’m a little encouraged,” Blumenauer told The Huffington Post. "The spotlight on this issue, with the speaker and the president, helps a lot. And juxtaposed with skyrocketing gas prices and these amazing profit reports that are coming out from the oil companies, we may actually be producing a perfect storm, where there is actually a chance."

"I still wouldn’t bet the farm on it,” he said. "But I do think this alignment is such that it makes it more likely.”


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Dan Froomkin is senior Washington correspondent for The Huffington Post. You can send him an email, bookmark his page; subscribe to his RSS feed, follow him on Twitter, friend him on Facebook, and/or become a fan and get email alerts when he writes.

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