Obama pounces on Speaker's remarks, urges end to oil subsidies

With high gas prices hammering his approval ratings, President Obama on Tuesday urged Congress to take immediate action to end tax subsidies for oil and gas companies.

In a letter to the leadership of both chambers and both parties, Obama used House Speaker John BoehnerJohn BoehnerNew Trump campaign boss took shots at Ryan on radio show Election reveals Paul Ryan to be worst speaker in U.S. history Getting rid of ObamaCare means getting rid of Hillary MORE's words against him, referencing the Ohio Republican's criticism of the oil companies in an interview with ABC News.

"I was heartened that Speaker BoehnerJohn BoehnerNew Trump campaign boss took shots at Ryan on radio show Election reveals Paul Ryan to be worst speaker in U.S. history Getting rid of ObamaCare means getting rid of Hillary MORE [Monday] expressed openness to eliminating these tax subsidies for the oil and gas industry," Obama wrote. "Our political system has for too long avoided and ignored this important step, and I hope we can come together in a bipartisan manner to get it done."

The president also urged Congress to get behind his energy plan even though he acknowledged that Republicans won't agree with much of it.

"I hope we can all agree that, instead of continuing to subsidize yesterday's energy sources, we need to invest in tomorrow's," Obama said.

Sen. Charles SchumerCharles SchumerTrump poised to betray primary supporters on immigration Rubio primary challenger loans campaign M Is Trump deliberately throwing the election to Clinton? MORE (D-N.Y.) also seized on Boehner's remarks, saying his comment that large companies don't "need to have" some subsidies was "almost too good to be true."

"Gas hitting four dollars per gallon seems to have finally caused Speaker Boehner to see the light on the insanity of providing subsidies to profit-soaked big oil companies," Schumer said in a statement released minutes before Obama's letter.

As he has said in town-hall meetings, Obama warned that while there is no "silver bullet" to lowering gas prices, "there are steps we can take to ensure the American people don't fall victim to skyrocketing gas prices over the long term."

"One of those steps is to end unwarranted tax breaks to the oil and gas companies and invest that revenue into clean energy to reduce our dependence on foreign oil," Obama said.

The president blasted "outdated tax laws" that amount to $4 billion in tax breaks for oil and gas companies a year.

"As we work together to reduce our deficits, we simply can't afford these wasteful subsidies, and that is why I proposed to eliminate them in my FY11 and FY12 budgets," Obama said.

Boehner spokesman Michael Steel sought to clarify the Speaker's comments, saying he was avoiding a political trap during the interview with ABC.

“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," Steel said. 

"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."

In the interview with ABC, Boehner said: "I don't think the big oil companies need to have the oil depletion allowances, but for small, independent oil-and-gas producers, if they didn't have this, there'd be even less exploration in America than there is today."

Asked about Democrats' broader push to end what the White House calls $4 billion in annual subsidies, Boehner said: "I think we gotta take a look at it."

The oil industry's most powerful trade group is rebutting claims that the industry receives lavish public support. 

"This is a tired old argument we've been hearing for two years now," said American Petroleum Institute chief economist John Felmy. 

"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 federal government by no stretch of the imagination subsidizes the oil industry. The oil industry subsidizes the federal government at a rate of $95 million a day."

—This story was updated at 1:33 p.m.

Jordan Fabian and Ben Geman contributed to this story.