Today, President Obama called on Congress to end “subsidies” for the major oil producers. Speaking in the Rose Garden, the president said:
Right now, the biggest oil companies are raking in record profits –- profits that go up every time folks pull up into a gas station. But on top of these record profits, oil companies are also getting billions a year — billions a year in taxpayer subsidies -– a subsidy that they’ve enjoyed year after year for the last century.
Think about that. It’s like hitting the American people twice. You’re already paying a premium at the pump right now. And on top of that, Congress, up until this point, has thought it was a good idea to send billions of dollars more in tax dollars to the oil industry.
It’s not as if these companies can’t stand on their own. Last year, the three biggest U.S. oil companies took home more than $80 billion in profits. Exxon pocketed nearly $4.7 million every hour. And when the price of oil goes up, prices at the pump go up, and so do these companies’ profits. In fact, one analysis shows that every time gas goes up by a penny, these companies usually pocket another $200 million in quarterly profits. Meanwhile, these companies pay a lower tax rate than most other companies on their investments, partly because we’re giving them billions in tax giveaways every year.
None of this is new. Like one of those dolls in an old cuckoo clock, President Obama periodically appears to smear someone somewhere in America who happens to be engaging in business and making a profit. Today’s speech was recycled from the one he delivered on March 1, for instance. Congress will ignore him, and he’ll be back in a few weeks to say the same thing again.
As for the “subsidies” he mentions, they are actually tax breaks, and they’re not unique to the oil companies. They’re the same tax breaks that other American corporations enjoy. The president is only targeting oil companies because they’re a convenient boogeyman, and because he’s getting hammered in the polls over his policies and the skyrocketing price of gas. If he gets his way, the oil companies will see their tax bills raised. They will pass that increase on to consumers — you. So Obama here is proposing to raise the price at the pump, not lower it.
The president used part of his camera time to inveigh against oil company profits, insisting that for every penny of price increase at the pump, oil companies make $200 million more money each quarter. But as usual, the devil is in the details. Is that per company, or spread out across the entire oil production industry? Based on logic and the way he worded it, Obama surely meant the latter, so the per company profit number is far smaller than he insinuated. This is a global industry he is talking about.