Biden's budget takes aim at fossil fuel industry with tax hikes

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WATCH LIVE: Biden releases his budget, proposed tax hikes

The president delivers remarks on 'his plan to invest in America, reduce the deficit' and more.

President Biden unveiled his proposed budget for fiscal year 2024 on Thursday, which in part took aim at billions of dollars of tax subsidies the White House said benefit the fossil fuel industry.

According to the White House, the proposed budget would strip $31 billion worth of "special tax treatment" for oil and gas company investments in addition to other fossil fuel tax preferences. The release further criticized oil companies for raking in record profits last year and for failing to invest in greater energy production.

"The President is committed to ending tens of billions of dollars of federal tax subsidies for oil and gas companies. Even as they benefit from billions of dollars in special tax breaks, oil companies have failed to invest in production," the White House said in a statement.

"In 2022, they realized record profits and cut their investment as a share of operating cash flows to the lowest levels in decade, while undertaking record stock buybacks that benefited executives and wealthy shareholders," the statement added. "The Budget saves $31 billion by eliminating special tax treatment for oil and gas company investments, as well as other fossil fuel tax preferences."

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President Biden speaks at the University of Tampa on Feb. 9. (Joe Raedle/Getty Images)

However, oil and natural gas has hit record production levels and is projected to tick up higher in upcoming years, federal data released this week showed. Energy Secretary Jennifer Granholm also applauded fossil fuel companies Wednesday for ramping up production to record levels, crediting the industry with helping to "stabilize the world" during the global energy crisis last year.

In addition, the Biden administration acknowledged last month that a figure repeatedly cited by Biden that showed fossil fuel companies sitting on more than 9,000 unused drilling permits was inaccurate. The president had pointed to the figure as evidence of lacking investment in domestic production.

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"The claim that they're going to get $31 billion from just repealing oil and gas subsidies is obviously absurd," Mike Palicz, the federal affairs manager at Americans for Tax Reform, told Fox News Digital in an interview. 

"The Inflation Reduction Act already raised taxes on energy — $20 billion of energy tax hikes in place for next year. Biden's back here saying they will get $31 billion more from tax increases on oil and gas," he said. "All things are going to be passed on to consumers in the form of higher utility bills, energy costs, price of gasoline."

The Biden administration previously stated oil, gas, and coal tax preferences encourage more investment in the fossil fuel sector and are "inconsistent with the Administration’s policy of supporting a clean energy economy." (Reuters/Angus Mordant)

Palicz noted that the budget notably didn't identify a single subsidy that it proposed to scrap. He also highlighted that the vast amount of federal energy subsidies are directed to the green energy industry.

"What they don't do in the budget documents we have so far is name a single oil and gas subsidy," he continued. "They don't do that because there really isn't one."

"Talking about the unfair advantage or leveling the playing field for green energy, again, we just passed [the Inflation Reduction Act] with $400 billion worth of green energy crap in it."

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Last year, meanwhile, Biden's budget proposed stripping fossil fuel subsidies worth more than $45 billion. The administration argued at the time that "tax preferences distort markets by encouraging more investment in the fossil fuel sector." But it is unclear why the figure was significantly higher than the one proposed Thursday.

"For over two years, we’ve struggled under President Biden’s inflation tax thanks to his unending war on American energy," Daniel Turner, the executive director of Power the Future, said in a statement. "Just last fall, Joe Biden promised no more oil drilling and this budget proposal makes good on that terrible promise."

"Joe Biden has drained our strategic reserve, made dirty deals with dictators for oil and now he wants to attack American workers and families by raising taxes on energy," he continued. "With this budget continuing to punish our energy industry one thing is clear now more than ever: President Biden cares more about the radical green agenda than the well-being of the American people."