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Obama Weekly Address: Lower Gas Prices By Eliminating Gov’t Subsidies to Oil Companies

By Doug Powers • March 17, 2012 12:42 PM

**Written by Doug Powers

The Republicans have yet to choose a nominee, but we already know that Obama’s other opponent will be oil companies.

As we’re often told, President Obama doesn’t have a “silver bullet” to control gas prices. There hasn’t been a presidential gas-price reducing silver bullet since George W. Bush left office. He must have taken it with him back to Crawford. But Obama does have some ideas on how to bring the price of gas down, and of them is to end government subsidies to Big Oil:

In his weekly address to the nation Saturday, Obama sought to redirect consumers’ anger with his administration to anger with Congress for allowing companies like Exxon Mobil and Chevron to receive $4 billion from the federal government every year.

“Your member of Congress should be fighting for you. Not for big financial firms. Not for big oil companies,” Obama claimed.

“In the next few weeks, I expect Congress to vote on ending these subsidies,” he continued. “And when they do, we’re going to put every single Member of Congress on record: They can either stand up for oil companies, or they can stand up for the American people.”

I’m not advised by brilliant economists like the president is, so maybe I’m unwisely straying above my pay grade here, but if we eliminated these tax breaks to oil companies right now, might that make the price at the pump go up? “No” say Democrats, arguing that Big Oil already reaps huge profits. In that case the government should also end subsidies to Goldman Sachs and Google. If eliminating government subsidies for oil companies might make gas less expensive, why wouldn’t eliminating government subsidies for General Electric make, say, refrigerators cheaper? Wait, the latter subsidies are for “green” projects so they’re okay.

According to the CBO (PDF), there were $2.5 billion in government subsidies — that is to say “tax breaks” — for all fossil fuels in 2011. That’s roughly the same amount of money that could go down the drain on “clean energy loans.” Maybe that’s what is meant by a “balanced approach.”