Record oil profits, Boehner gaffe set up Senate Democrats to go after subsidies

Earlier this week, spin doctors for House Speaker John Boehner (R-Ohio) scrambled to do damage control following his comments Monday to ABC News advocating cuts to Big Oil subsidies.

In an interview with ABC News’ Jonathan Karl, Boehner had this to say:

It’s certainly something we should be looking at. We’re in a time when the federal government’s short on revenues. They ought to be paying their fair share…Everybody wants to go after the oil companies and frankly, they’ve got some part of this to blame.

A Boehner spokesman quickly characterized his boss’s comments as an attempt to avoid a trap sprung by ABC’s Karl:

The Speaker made clear in the interview that raising taxes was a non-starter, and he’s told the president that. He simply wasn’t going to take the bait and fall into the trap of defending ‘Big Oil’ companies. Boehner believes, as he stated in the interview, that expanding American energy production will help lower gas prices and create more American jobs. 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.

The dial-back didn’t stop President Obama from firing off an arch letter to Boehner, writing that he “was heartened that Speaker Boehner yesterday expressed openness to eliminating these tax subsidies for the oil and gas industry.”

Meanwhile, Senate Majority Leader Harry Reid (D-Nev.) has said that, after Boehner’s comments opened a crack in the Republicans’ armor, Democrats will waste no time in pursuing legislation to end the subsidies. In a Wednesday press conference, he said that his party will push consideration of President Obama’s proposal to repeal Big Oil tax breaks as early as next week. “There’s no necessity for these subsidies,” he said. “The companies have broken all records for profits.”

Oil industry insiders have lashed out at the Democrats’ attempt to end oil subsidies as job killers. Reuters reports:

“This is a tired old argument we’ve been hearing for two years now. If the president were serious about job creation, he would be working with us to develop American oil and gas by American workers for American consumers,” the American Petroleum Institute’s chief economist John Felmy said.

And yet, if first quarter trends continue through the rest of the year, Exxon alone stands to net ten times as much in profits as the entire industry receives in subsidies. From January to March, despite skyrocketing gas prices for consumers, Exxon made $10.65 billion in profits. This is the highest quarterly profit Exxon has reported since it made $14.83 billion in the third quarter of 2008.

The Democratic Congressional Campaign Committee responded to the flare-up by capitalizing on the media hype over the impending British royal wedding, snatching up the domain roilwedding.com (“R-Oil wedding,” an admirably reaching pun on “royal wedding”). The DCCC is using the site as a tongue-in-cheek online petition congratulating the “marriage” of Boehner and other Republicans to oil interests.