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UPDATE 2-Obama Makes Fresh Call to End Big Oil's Breaks

Thursday, 29 Mar 2012 12:36 PM

* Senate votes to defeat repeal measure

* Gasoline prices hot issue in presidential campaign

* Obama taps into consumer anger at big oil firms (Adds Senate vote, background, more quotes)

By Patricia Zengerle

WASHINGTON, March 29 (Reuters) - President Barack Obama challenged Congress on Thursday to repeal billions of dollars in tax breaks for the biggest U.S. energy companies, saying they are raking in record profits while Americans struggle with higher gasoline prices.

"Today, members of Congress have a simple choice to make. They can stand with big oil companies, or they can stand with the American people," he said at an event in the White House Rose Garden highlighting one of the hottest issues in the U.S. presidential campaign.

"It's not like these are companies that can't stand on their own," Obama said. " Last year, the three biggest U.S. oil companies took home more than $80 billion in profit. Exxon ( ) pocketed nearly $4.7 million every hour."

He cited an analysis showing that the big companies pocket another $200 million in quarterly profits every time the price of gasoline goes up by 1 cent.

Instead of rewarding oil companies, the United States should "double down" on clean energy, Obama said in his speech.

"Keep in mind, we can't just drill our way out of this problem," Obama said before a crowd of about 100 people, including representatives of environmental groups and Americans affected by the rising cost of gasoline.

As Obama campaigns for re-election, Republicans are attacking the White House over the rising cost of gasoline, a particularly sensitive issue for car-loving Americans. Prices have jumped about $0.30 in the past month to an average of $3.92 per gallon.

A Reuters/Ipsos poll on Tuesday showed that more than two-thirds of Americans disapprove of how Obama is handling high gasoline prices, although they do not blame him. The reason most commonly cited for the high prices, according to the poll, was "oil companies that make too much profit."

REPUBLICAN ONSLAUGHT

Before Obama spoke, the Republican National Committee issued a statement blasting him and noting that the price of a gallon of regular gasoline has more than doubled since he took office in January 2009, to $3.92 from $1.85.

"Obama's energy policy is a hodgepodge and his spending on green energy has failed to produce jobs or lower prices at the pump," the RNC statement said.

Previous spikes in fuel prices have not affected U.S. presidential results. But economists warn that higher gas prices could slow the overall economy, which would toughen Obama's chances of winning a second term on Nov. 6.

The U.S. Senate, meanwhile, voted 51-47 on Thursday to defeat legislation backed by Democrats that would eliminate tax deductions granted to big oil companies over the next decade. The measure would also extend some tax breaks intended to foster clean energy initiatives.

The Obama administration said it could raise $14 billion by repealing the provision.

Obama has been touting an "all of the above" energy strategy that includes oil and gas development in addition to support for renewable fuels.

(Additional reporting by Caren Bohan and Samson Reiny; Editing by Vicki Allen and Philip Barbara)

© 2017 Thomson/Reuters. All rights reserved.

   
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Thursday, 29 Mar 2012 12:36 PM
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