Obama says he wants oil producers to boost output

As the high cost of gasoline takes a toll on politics and pocket
books, President Barack Obama says he is calling on major oil producers
such as Saudi Arabia to increase their oil supplies to help stabilize
prices, warning starkly that lack of relief would harm the global
economy.

“We are in a lot of conversations with the major oil producers like
Saudi Arabia to let them know that it’s not going to be good for them if
our economy is hobbled because of high oil prices,” Obama told a
Detroit TV station.

His remarks signaled a broad new appeal in the face of skyrocketing
gasoline prices in the United States and they came as he reiterated a
call for Congress to repeal oil industry tax breaks.

In interviews Tuesday with WXYZ in Detroit and in WTKR in Hampton
Roads, Va., Obama said the message to major oil producers like Saudi
Arabia is that an economy that buckles because of high oil prices won’t
grow and won’t be good for them or for the U.S.

Obama acknowledged disruptions in oil production because of the war
in Libya. But he said others can make up the difference and “we’re
pushing them to do so.” Libya supplied less than 2 percent of world
demand. Saudi Arabia and other OPEC countries already are covering some
of that shortage by boosting production.

The president’s effort to compel more overseas production echoed
calls by President George W. Bush in 2008 urging Saudi Arabia to
increase supplies during that year’s spike in gasoline prices. The
Saudis rebuffed Bush’s efforts.

Obama said he has stressed the self-interest of oil producing
nations, arguing that “if we’re not growing, they’re not going to be
making money either.

“And so they need to increase supplies,” he told WTKR.

Gas pump prices have climbed for 35 consecutive days. The national
average rose by a penny to hit $3.87 a gallon on Tuesday, more than a
dollar than a year ago. The price already has exceeded $4 a gallon in
some regions of the country.

In a letter to congressional leaders Tuesday, Obama urged them to
take steps to repeal oil industry tax breaks, reiterating a call he made
in his 2012 budget proposal earlier this year. The White House conceded
that plan would do nothing in the short term to lower gasoline prices.

The president wrote a day after House Speaker John Boehner, R-Ohio,
said he was willing to “take a look at” repealing the
multibillion-dollar tax subsidies enjoyed by the major oil companies.
Boehner aides on Tuesday sought to clarify Boehner’s stance, stressing
that he was not advocating repeal of the tax breaks.

“He has said all along that he is opposed to raising taxes,” Boehner spokesman Kevin Smith said. “That’s his position.”

Rising gas prices have become a political weight for the White House,
with polls showing that as the cost rises at the pump, the president’s
approval ratings have slipped. Obama increasingly has sought to display
action on oil, even as he acknowledges that there is no immediate way to
stem costs.

“High oil and gasoline prices are weighing on the minds and
pocketbooks of every American family,” Obama wrote. But he also added
that “there is no silver bullet to address rising gas prices in the
short term.”

Obama’s proposal, spelled out in his past two budget plans, would
eliminate a number of tax breaks for oil companies that would generate
an estimated $4 billion a year in additional revenue.

The tax breaks – some in place since the 1920s – have survived
multiple attempts to repeal them in the face of heavy oil industry
lobbying.

The Republican response to the president’s letter was dismissive.

Another Boehner spokesman, Brendan Buck, said Obama’s suggestions
“would simply raise taxes and increase the price at the pump.” And
Senate Republican leader Mitch McConnell said: “The president’s latest
call to raise taxes on U.S. energy is as predictable as it is
counterproductive.”

Obama’s letter was addressed to Boehner, McConnell, House Democratic leader Nancy Pelosi, and Senate Majority Leader Harry Reid.

Blaming the subsidies on “outdated tax laws,” Obama said money
obtained from repealing the breaks should be spent on clean energy
initiatives to reduce dependence on foreign oil.

On Monday, Boehner told ABC News that the government is low on
revenues and that oil companies “ought to be paying their fair share.”

“We certainly ought to take a look at it,” Boehner said about
repealing tax subsidies for major oil companies. “We’re at a time when
the federal government’s short on revenues. We need to control spending
but we need to have revenues to keep the government moving.”

But Boehner made no commitment to repealing the subsidies. “I want to
know what impact this is going to have on job creation in America,” he
told ABC.

Obama, in his letter, said he was “heartened” by Boehner’s remarks.
“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.”

White House spokesman Jay Carney dismissed suggestions that Obama’s
letter was motivated by the potential effect of rising gas prices on the
president’s political prospects.

“I don’t think when somebody sticks the credit card in the pump or
pays a cashier the cash for a tank of gas that they’re thinking about an
election in 2012,” he said.