Are Gas Prices Changing the Deficit Debate?

  • When gasoline prices climb, politicians point fingers. Republicans attribute high fuel prices to restrictive oil-drilling regulations, noting that the cost of crude has soared under the Obama Administration. The White House had to see the broadside coming. When high prices clobbered consumers in 2008, candidate Obama accused the Bush Administration of favoring tax breaks for Big Business over relief for working families.

    But on April 25, the normal story line changed--briefly--when House Speaker John Boehner recommended that Congress "take a look" at slashing oil and gas subsidies to raise revenues. It made sense: gas prices, averaging $3.90 per gal. nationally, suggested that the drillers and refiners didn't need any more help from the Treasury. They were getting plenty of that at the pump.

    Boehner backpedaled just as quickly, arguing that corporations would pass on the cost of lower subsidies to consumers. But another Republican took up the cause. At an April 28 town hall, Wisconsin Representative Paul Ryan--the architect of the Republican budget proposal--endorsed eliminating handouts to energy giants and agribusinesses. "We're talking about reforming the safety net and the welfare system. We also want to get rid of corporate welfare," Ryan said.

    House and Senate Democrats have drafted legislation to curb billions in annual subsidies to oil and gas companies. But Boehner, who equates repealing tax breaks with raising taxes, appears determined to avoid a vote that could expose a rift in his party. Instead, Republicans are skewering Democrats for limiting energy production. As long as the pain at the pump continues, so too will the blame game.