April 27, 2011 / 4:53 PM / 8 years ago

UPDATE 1-Republicans turn up heat on Obama over oil prices

* Republicans focus on energy amid backlash on Medicare

* Accuse Obama of inaction on rising gasoline costs

* Energy prices may be pivotal in 2012 elections (Adds details on BP earnings, House legislation and edits)

By Richard Cowan

WASHINGTON, April 27 (Reuters) - With Americans upset about rising gasoline prices, Republicans in the U.S. Congress aim to fix the blame on one person when they return next week from recess: President Barack Obama.

Congress wrapped up its last work session on April 15 with Democrats and Republicans in a blistering debate about budget deficits and the size of the federal government.

Now, Republican leaders in the House of Representatives aim to pivot to another hot-button issue: high gasoline prices that are hitting consumers who are already struggling to recover from a prolonged economic downturn.

“Running on empty: Obama administration does nothing to address skyrocketing gas prices,” screamed a press release on Tuesday from House Speaker John Boehner’s office.

Obama has entered the energy fray, too, urging oil-producing countries to increase output amid rising prices.

He also asked Congress to end billions of dollars worth of oil industry tax breaks — money that could be used for deficit-reduction or investing in cleaner alternative energy.

Democrats have long argued that with the major oil companies enjoying healthy profits amid high prices, they no longer need the tax breaks.

For example, even with setbacks related to last year’s Gulf of Mexico oil spill, BP Wednesday reported profits of $5.5 billion in the first quarter.

The Republicans’ focus on energy comes as the national retail price for regular gasoline has hit $3.88 a gallon, an increase of more than $1 a gallon compared to a year ago.

Gas pump sticker shock could get worse as the looming U.S. summer driving season hikes demand for gasoline and political unrest continues in Middle East oil-producing countries.

All this has U.S. motorists worried that gasoline prices could approach the record-high $4.11 per gallon of July 2008.

Boehner’s move to put a bull’s eye on gasoline prices also comes as public opinion polls show opposition to Republican initiatives that would further cut taxes for the rich while making senior citizens pay more for health insurance.

A CBS News/New York Times poll, for example, found that 61 percent of people think Medicare coverage for the elderly is worth the costs. Meanwhile, 45 percent said military spending should be cut while only 21 percent favored Medicare cuts.

When Congress resumes next week, the Republican-led House will bring to a vote at least one bill aimed at bolstering domestic energy production.

“As gasoline prices close in on $4 a gallon, that is going to be part of the conversation,” said Spencer Pederson, a spokesman for the House Natural Resources Committee.

Doc Hastings, chairman of that committee, is leading Republican efforts to expand U.S. offshore oil drilling and speed up the government’s approval process for new projects — moves that are expected to be blocked by Obama and his fellow Democrats in the Senate.


The Republicans believe Obama wrongfully stood in the way of offshore oil drilling because of safety concerns following the Gulf of Mexico disaster last April.

Gulf of Mexico oil output will decline by 190,000 barrels per day in 2011, according to Energy Department forecasts.

“That’s lost oil on the world market,” leading to higher prices, Pederson said. That quantity, however, is only a speck of the estimated 1.52 million barrel per day increase in global demand this year.

The 2012 presidential and congressional elections are 18 months away but they already dominate the Washington dynamic.

In an interview with ABC News on Monday, Boehner predicted Obama would not win a second term if gasoline prices were to rise to $5 or $6 a gallon.

While the White House would quarrel with that assessment, Democrats are worried rising energy prices could undermine the U.S. economic recovery and hurt Obama’s re-election chances.

In an interview with a Virginia radio station on Tuesday, Obama said his administration was “talking to oil producers around the world and letting them know it’s in their interest to make sure that high oil prices don’t end up hurting the world economy.”

Senator Charles Schumer, one of the top-ranking Democrats, backed up Obama’s call for ending oil company tax breaks, saying: “These subsidies are a relic of a time when oil was $17 per barrel and oil companies needed incentives to drill. That time has long since ended.”

Oil prices are now around $112 per barrel.

Obama’s request to Congress came after Boehner said that “we should be looking at” the multibillion-dollar subsidies for oil companies and that those companies “ought to be paying their fair share” in taxes.

But by Tuesday, it was less clear whether Boehner really wanted to switch Republican gears and consider pulling the oil company subsidies.

“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,” said Boehner spokesman Michael Steel. (Editing by Bill Trott)

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