Obama’s Solution to Higher Gas Prices: Eliminate Oil Company Tax Breaks

by on July 2nd, 2013
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COMMENTARY | Rising gasoline prices are becoming a hot-button issue for President Barack Obama as he seeks to be elected to another term in the White House. Obama has faced mounting criticism from Republican opponents as the prices at the pump continue to climb and threaten the progress he has made in steering the United States toward an economic recovery.

Obama is striking back. Speaking at a campaign stop in New Hampshire on Thursday, he renewed his call for repealing tax breaks enjoyed by oil companies. He is taking the position that eliminating credits currently enjoyed by these companies will send a message that will encourage them to lower the soaring gas prices.

U.S. gas prices have climbed 13 percent in just two months. The average national price for unleaded gasoline is now $3.73 per gallon. Soaring gas prices have been blamed on tensions over Iran and its nuclear program and higher demand for fuel in nations such as India and China. Prices are expected to continue to rise over the next few months and could approach $5 per gallon nationally by the summer.

Republican leaders are blaming Obama’s energy policies for causing the spike in gas prices. Former Massachusetts Governor Mitt Romney accused Obama of hindering domestic energy development by limiting exploration and production of crude oil inside the United States. He also criticized the President for opposing the Keystone XL pipeline, which would have brought Canadian oil to the Gulf of Mexico, because it posed an environmental risk in parts of Nebraska. Romney said Obama should shoulder the blame for escalating gas prices because of these actions.

Obama fired back at Romney and others saying that more drilling was not a feasible solution to driving prices down. He pointed to continued investment in developing clean energies and taking away $4 billion in subsidies enjoyed by oil companies as factors that will help stabilize prices.

It does not matter who is to blame for high gas prices. The fact is that voters will punish Obama if gas costs put a huge dent in their wallets. Obama has seen some economic progress in home construction, auto sales and reducing unemployment. All of it will not mean as much as long as this issue sees little or no resolution.

If President Obama wants to assure winning a second term in November, how he handles gas prices now will play a pivotal part.

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