Boehner open to ending some oil tax breaks

House Speaker John Boehner (R-Ohio) yesterday walked a fine line on the thorny issue of oil-industry tax benefits targeted for elimination by the White House, stating that "we oughta be looking at" ending some subsidies even as he ruled out any potential tax increases.

Boehner told ABC News that while "everybody wants to go after the oil companies" for gas prices that are climbing above $4 per gallon in many regions of the country, the industry also has "got some part of this to blame."

"Listen, they're gonna pay their fair share in taxes, and they should," the GOP leader added. When pressed on President Obama's plan to roll back more than $4 billion in oil-company tax breaks, Boehner said he did not believe "the big oil companies need to have the oil depletion allowances" -- one of the four biggest subsidies in Democrats' cross hairs -- and that "we certainly oughta take a look at" proposals to do away with some of the industry's incentives.

Yet Boehner also ruled out raising taxes of any sort to help pare back the nation's trillion-dollar deficit, casting significant doubt on his seeming openness to a discussion about phasing out some oil subsidies.

"He simply wasn't going to take the bait and fall into the trap of defending 'Big Oil' companies," Boehner spokesman Michael Steel said via email, adding: "We'll look at any reasonable policy that lowers gas prices. Unfortunately, what the President has suggested so far would simply raise taxes and increase the price at the pump."


Steel pointed to Boehner's endorsement of more domestic energy development as a means to "help lower gas prices and create more American jobs," a connection that House Republicans have drawn with increasing intensity as gas prices spiked in recent weeks.

"I think if we began to allow more permits for oil and gas production," Boehner told ABC, "it would send a signal to the market that America's serious about moving toward energy independence." The Ohioan also predicted that a continued uptick in fuel costs could deny Obama a second term.

That drumbeat of House-side attacks on the Obama administration's energy policy is expected to continue next week after lawmakers return to the Capitol. Republicans are planning to call up a series of bills aimed at prodding more offshore oil exploration in a bid to force the Senate's hand and draw attention to high gas prices during the start of the summer driving season.

"We're gonna send 'em to the Senate," Boehner said yesterday. "Let's see what they do ... if they pass 'em, whether the president will sign 'em. It's time for us to do all of the above -- if we're going to be serious about bringing down energy costs and cleaning up our air."

But on the issue of air quality, Boehner made no bones about his distaste for U.S. EPA greenhouse gas emissions regulations. He cited the agency's rules as one factor that lays blame for the recent uptick in pump prices at the president's feet, alongside "the fact that [Obama] won't allow exploration in the Gulf" of Mexico or drilling in protected areas of Alaska.

That Republican link between EPA emissions limits and gas prices, which rests on the effect such White House rules would have on refineries, has met with chortles and alarm from Democrats (E&E Daily, March 11).

EPA chief Lisa Jackson also sought to dispel any connection between her agency's emissions curbs and gas prices. In a speech today at the Energy Information Administration's annual conference, Jackson said she was "compelled to note that the upward pressure [on gas prices] is not coming from any environmental or health regulation."

"The standards we set to protect our health are so often -- and so inaccurately -- blamed for increasing prices and economic challenges that I want to make clear: That is not what is happening," she said. "What appears to be the most important factor at work is our dependence on imported energy."

Still, weeks after environmentalists pointed to a debunking of the GOP claim by the fact-checking PolitiFact website, Boehner's ABC remarks suggest that the EPA-gas prices argument retains political potency.

Pushback from two sides

Boehner's openness to discussing the necessity of certain oil subsidies early in his ABC interview is not without precedent among his fellow conservatives.

A number of the capital's biggest right-leaning groups, including the Club for Growth and Americans for Tax Reform, joined watchdogs last month in calling on lawmakers in both parties to level the energy playing field by eliminating all subsidies, from nuclear to fossil fuels (E&E Daily, March 18). Yet that effort's biggest impact has come in the debates over whether to shift ethanol and renewables benefits, and the oil industry is mobilizing its lobbying clout to defend its tax supports -- most recently, by playing up their value for popular constituencies such as teachers and firefighters (E&ENews PM, April 25).

In addition, some Democrats remain unenthusiastic about the White House's bid to end oil-industry benefits such as the depletion allowance and the domestic manufacturing tax break. Oil-state Sens. Mary Landrieu (D-La.) and Mark Begich (D-Alaska) are already on record as opposed to putting a subsidy rollback on the table (E&ENews PM, Feb. 8).

Click here to read a transcript of Boehner's ABC interview.

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