Battered by gas prices, White House starts attacks on oil companies

The White House has joined congressional Democrats in targeting oil companies with criticism for nearly $4 per gallon gas.

President Obama lashed out at oil companies — and the tax breaks they get from the government — for a second consecutive day on Thursday and again in Saturday's address.

“Four billion dollars of your money are going to these companies at a time when they’re making record profits and you’re paying near record prices at the pump,” the president said at a Nevada town hall. “It has to stop.”

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Obama also announced a Justice Department task force that will probe whether speculators and traders are to blame for the high prices. A spokesman for House Speaker John Boehner (R-Ohio) on Friday criticized the effort as an attempt to deflect attention from White House and Democratic opposition to increased drilling in the United States.

Going after oil companies is smart politics for Obama, according to polls and Democratic strategists.

Only 11 percent of those surveyed in a McClatchy-Marist poll this week said Obama and Democrats are to blame for high gas prices. Thirty-six percent of U.S. residents blamed turmoil in the Middle East for the high prices, while 34 percent say U.S. oil companies are to blame.

Seven percent said congressional Republicans were at fault.

“I do think people aren’t really sympathetic to the oil companies,” said Democratic strategist Peter Fenn, who contributes to The Hill’s Pundits Blog.

But he also said “there’s no question” the high prices are hurting the president, and that there’s not a lot the White House can do to lower prices.

High prices are being triggered in part by the perception that turmoil in the Middle East and higher demand in the summer driving season should drive up prices, according to Sander Cohan, a fuels analyst at Energy Security Analysis. Petroleum supplies in the U.S. are actually at seasonal levels, he said.

While the war in Libya is pulling a few million barrels per day from markets, Cohan emphasized that perceptions of higher demand are having an even bigger effect on price.

Members of Congress are hearing complaints from their constituents, which has led to tensions between the White House and Democrats in the House and Senate.

Obama has come under pressure from members of his party to do more to reduce gas prices. Sen. Charles Schumer (D-N.Y.) has called on the president to release fuel from the strategic oil reserve, which he said would provide relief to drivers at the pump and prevent the economy from slipping back into a decline.

The administration has been cool to opening the reserve, though officials have described it as an idea under consideration. 

Obama said Saturday there are no easy answers for lowering gas prices, which are hovering around $4 a gallon, and criticized politicians who are pushing plans to immediately reduce the price of gas.

But by hitting the oil companies over subsidies and sending the Justice Department on an investigation, Obama can try to mend fences with his allies.

Sens. Carl Levin (D-Mich.) and Jack Reed (D-R.I.) welcomed Obama’s announcement of the Justice task force on Thursday, and said the White House should continue efforts to stop speculation from causing prices to spike.

Obama has been battered by polls showing voter angst with the economy and worry over the president’s leadership. At least some of that anxiety is based on rising gas prices, which have steadily increased over the past two months.

According to AAA's tracking, the national average price for a gallon of regular gas is $3.86, which is 4 cents per gallon more than a week ago and nearly $1 more than a year ago.

Even though the McClatchy-Marist poll shows voters blaming oil companies, political insiders in both parties believe the president will get the blame, according to a Thursday Insiders Poll from National Journal.

Obama himself on Thursday suggested gas prices as one of his problems, telling a crowd of supporters that included actor Tom Hanks and film director Steven Spielberg that “my poll numbers go up and down depending on the latest crisis, and right now gas prices are weighing heavily on people."

The trouble with gas prices is a bit of a frustration to a White House that otherwise can tout the beginnings of an economic recovery.

Private payrolls added more than 200,000 jobs last month, and the unemployment rate has dropped a full percentage point in a matter of months, to 8.8 percent.

Markets, which were closed Friday, are up for the year, and posted solid gains last week after an initial scare Monday when the Standard & Poor's credit rating agency lowered its outlook on U.S. debt.

Yet 70 percent of those answering a New York Times/CBS poll released Thursday said they think the country is headed in the wrong direction. Thirty-nine percent of those polled said the economy was getting worse, up from 28 percent who thought the economy was getting worse in October.