Biden floats tax on oil companies that don't lower pump prices, increase production

WASHINGTON – President Joe Biden on Monday accused oil companies of "war profiteering," threatening to go after their "outrageous" profits if pump prices don't fall.

Unless the industry passes some of those profits onto consumers and increases domestic production, Biden said he will work with Congress to impose a tax on "excess profits," along with other restrictions.

"It’s time for these companies to stop war profiteering," Biden said in brief remarks at the White House. "The American people will judge who is standing with them and who is only looking out for their own bottom line."

The head of the American Petroleum Institute, the top lobbying group for the oil and gas industry, said Biden's proposal would backfire.

"Increasing taxes on American energy discourages investment in new production, which is the exact opposite of what is needed," Mike Sommers, API's president and CEO, said in a statement.

Biden's move comes days before the Nov. 8 midterm elections. Polls show inflation is a top concern of voters and gas prices are one of the most visible signs of pocketbook pain.

The national average price at the pump is down since the summer peaks but is still 36 cents higher than a year ago, according to AAA.

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Getting a new tax through the current Congress would be difficult and would likely become impossible if Republicans take control of the House in next week’s elections. Republicans say the administration should lower regulatory barriers if it wants to increase energy production.

Still, the White House has been hammering away on the issue to show Biden is trying to ease the high gas prices he says are the fault of oil producers and Russia’s invasion of Ukraine.

Less than two weeks ago, Biden announced the tail end of an historic release of 180 million barrels of oil from the Strategic Petroleum Reserve that he’d ordered in March to lower pump prices.

He complained that “outsized industry profit margins” were adding more than 60 cents to the average price of a gallon of gas.

"Rather than increasing their investments in America, or giving American consumers a break, their excess profits are going back to their shareholders and to buying back their stock, so the executive pay is going to skyrocket," Biden said Monday. "Give me a break."

Exxon Mobil had a record-breaking third quarter profit of $19.66 billion in net income, according to the Associated Press. Chevron’s $11.23 billion in profits nearly matched its second quarter record profits.

Sommers, the head of API, said oil companies do not set prices for their product.

"Global commodities markets do," he said.

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This article originally appeared on USA TODAY: Biden attacks high profits of oil and companies, floats possible tax