President Obama sent a letter to Congressional leaders today, saying he was "heartened" by House Speaker John Boehner's statement that he was willing to consider cutting multi-billion dollar subsidies to oil companies, and urging lawmakers to act.
The president said Congress should "take immediate action to eliminate unwarranted tax breaks for the oil and gas industry and use the dollars to invest in clean energy."
Boehner had stunned Washington on Monday when he told ABC News that cutting the subsidies to oil companies is "certainly something we should be looking at."
"We are in a time when the federal government's short on revenues. We need to control spending, but we need to have revenues to get the government moving," Boehner said. "They ought to be paying their fair share."
Congressional Democrats pounced on the issue today. Sen. Chuck Schumer, D-N.Y., applauded Boehner for "see[ing] the light" on the "insanity of providing subsidies to profit-soaked big oil companies."
The topic dominated the White House press briefing.
"Immediate action means what it says, which is when Congress comes back, let's take action legislatively to eliminate those subsidies," White House spokesman Jay Carney said. "[It's] hard to argue that given where the price of oil is now that there's a need for subsidies of the oil and gas industry."
Carney was referring to a statement earlier this year by former Shell CEO John Hofmeister, in which he said: "In the face of sustained high oil prices, it was not an issue for large companies of needing the subsidies to entice us into looking for and producing more oil."
In all, the tax breaks, many designed to encourage more exploration, cost taxpayers more than $4 billion a year in lost revenue -- enough for 1.4 million Americans to buy a tank full of gas every week for an entire year.
However, the oil companies do have friends in Congress and the President's letter demanding immediate action hit with a thud. Boehner and Senate Republican Leader Mitch McConnell rejected the proposal. Boehner's spokesman said the plan was insufficient because it would "only raise taxes and increase prices at the pump."
ABC News asked the 10 members of Congress who received the most campaign contributions from the oil industry in the last election if they'd be willing to cut the tax breaks. Most have yet to respond, and Sen. David Vitter, R-La., told ABC News that he'd only be open to eliminating tax breaks if tax rates were also lowered.
"I'm open to ending most tax exemptions, deductions and credits if we use the resulting revenue to lower all rates, much as the president's deficit commission suggested," Vitter said in a statement. "Part of the reason for these provisions is that we have the highest corporate tax rate in the world, which kills American jobs."