Obama proposes cutting oil and gas subsidies to fund jobs plan
Cross-posted from Climate Progress.
Just when it seemed like the debate about repealing oil and gas subsidies had faded away, President Obama gave the issue new life. Speaking at the White House yesterday, Obama proposed cutting certain tax credits to profitable oil and gas companies to pay for part of his $467 billion job-creation package.
“The bottom line is, when it comes to strengthening the economy and balancing our books, we’ve got to decide what our priorities are,” he said, speaking in the White House Rose Garden. “Do we keep tax loopholes for oil companies, or do we put teachers back to work?”
The president seems to have support from the American public. In a Washington Post/ABC News poll conducted this July, 59 percent of Americans said they supported repealing permanent tax breaks for fossil-fuel companies to reduce the deficit. While the funds would be used for a jobs plan rather than deficit reduction, the president and Democratic members of Congress are hoping to ride that support.
In an interview with Climate Progress last month, Senate Majority Leader Harry Reid said he was bullish on the oil and gas subsidy issue. Even while expressing doubts about getting support for extending clean energy incentives, Reid said he believed it is possible to roll back certain permanent tax credits in the fossil energy sector:
“That is one thing that I think we have a shot at doing,” Reid told Climate Progress. “And I hope we can do that — it will help us get a few more dollars for other areas. I wish we could shift it directly into renewable energy programs. But unless something breaks in the next couple of months, I don’t see that happening.”
Obama announced his jobs plan last week before a joint session of Congress. While choosing not to explicitly talk about green jobs and clean energy, the plan does include efficiency upgrades to schools, a variety of transportation infrastructure upgrades, a strategy to rehabilitate foreclosed homes and make them more efficient, and a strong approach to environmental standards (even though the White House dropped a proposed smog rule just days before the speech.)
Repealing tax subsisides for oil and gas companies would bring in about $41 billion over the next decade. Most of the other funds would come from changing the number of itemized deductions that individuals making over $200,000, and families making over $250,000, can report on their tax returns.
The coming debate around oil and gas subsidies may be fierce. But Senator Reid said he believes the tide is turning in favor of a plan to repeal them.
“It’s quite embarrassing for anyone to support these tax breaks while these companies are earning record profits. If we can find a good use for the funds beyond lining the pockets of oil companies, I think people will support that,” said Reid.