President Joe Biden used a Wednesday speech at the White House to scold fossil fuel companies for raking in huge profits at the expense of U.S. consumers, who are being gashed by high prices at the pump.
But instead of calling for a specific policy solution that would force the industry’s hand, Biden asked oil companies to voluntarily stop padding their bottom lines and instead “pass the savings on to consumers.”
“So far, American oil companies are using that windfall, the windfall of profits, to buy back their own stock, passing that money on to their shareholders, not to consumers,” the president said. “When the cost of oil comes down, we should see the price at the gas station, at the pump, come down as well. That’s how it’s supposed to work. But that’s not what’s happening.”
The president’s latest energy address marked a continuation of his approach to countering fossil fuel industry profiteering thus far, one that has focused more on pleading with oil company executives to do what’s best for consumers than aggressively pursuing legislative and executive action to compel fossil fuel giants to constrain prices.
Jamie Henn, the director of Fossil Free Media, welcomed Biden’s direct call-out of the industry’s surging profits and ongoing share buybacks, but added that he now needs to “tell Congress to pass a Big Oil windfall profits tax!”
The Stop the Oil Profiteering campaign echoed that message.
“The price gouging from Big Oil is unacceptable and that’s exactly why we need a Big Oil windfall profits tax — the most simple first step to stop this profiteering and deliver immediate relief to working people across the country,” the campaign said.
Pres. Biden called out oil companies for using their ‘windfall of profits’ from high gas prices—$70 billion in just one quarter—to buy back their own stocks pic.twitter.com/sK7zDrsM7s
— NowThis (@nowthisnews) October 19, 2022
While the Biden White House has reportedly mulled supporting a windfall profits tax in private, the administration has yet to endorse legislation that Democrats in the House and Senate have introduced and forcefully advocated in recent months.
Survey data has shown that a windfall profits tax targeting oil giants is massively popular with the U.S. public, which has signaled it wants lawmakers and political candidates to crack down on corporate profiteering that is driving up prices across the economy.
With the midterms approaching, campaigners and strategists have implored the Biden administration to get behind a windfall profits tax as part of its economic messaging, particularly as Republicans hammer away on inflation attacks even as their party threatens to make the problem worse by pushing giveaways for the rich.
In a recent memo, Democratic strategist Mike Lux argued that “there is not a reason in the world Democrats need to be defensive or mushy about their plan for inflation,” noting that a “populist message on the issue has been tested repeatedly by the smartest pollsters in the business… and it works.”
Lux wrote that a top messaging point for Democrats should be that “wealthy corporations with monopoly power are jacking up their prices, and their profits are going through the roof.”
“Big oil, food, shipping, healthcare, and real estate companies have been making record profits over the last two years,” Lux implored Democratic candidates to say. “I will crack down on price gouging, but to be clear—my opponent has proposed nothing to combat this abuse.”
Earlier this year, the House passed the Consumer Fuel Price Gouging Prevention Act, Democratic legislation that proposes giving Biden emergency authority to combat “unconscionably excessive” price hikes by oil and gas companies. Not a single Republican voted for the bill, which hasn’t received a vote in the Senate.
And neither chamber of Congress has voted on windfall profits tax legislation, even as oil companies continue to report unprecedented profits.
Rep. Ro Khanna’s (D-Calif.) Big Oil Windfall Profits Tax Act, which would impose a per-barrel levy on profitable oil companies and use the revenue to pay out a quarterly rebate to consumers, has just 23 co-sponsors in the House.
A separate proposal introduced in August by Sen. Ron Wyden (D-Ore.), chair of the Senate Finance Committee, would “double the tax rate of Big Oil’s excess profits” and impose a tax on stock buybacks.
The bill has 13 co-sponsors in the Senate, including Majority Leader Chuck Schumer (D-N.Y.)—but it hasn’t come up for a vote.
“While you pay through the nose at the gas pump, Big Oil is lining its pockets,” former U.S. Labor Secretary Robert Reich said Wednesday. “How are they using their record profits? Not to increase production or lower gas prices. They’re spending billions on stock buybacks.”
“What can we do about it? Hit Big Oil with a windfall profits tax,” Reich added.