Politics & Government

Washington stymied on how to deal with gasoline prices


WASHINGTON — When gasoline hit $4 a gallon in San Francisco, Republicans quickly noted that it happened in the hometown of the nation's most powerful Democrat: House Speaker Nancy Pelosi.

In a speech on the Senate floor, Republican Kit Bond of Missouri recalled how Pelosi had promised lower gasoline prices before Democrats took control of Congress in 2006.

"Well, we certainly got change, all right," Bond said. "Since the Democrats have come to power in the House and Senate, pain at the pump has increased by 50 -- five-zero -- 50 percent."

With the national average price of a gallon of regular gasoline at a record high of $3.62, lawmakers are out to gain ground by doing what many of them do best: beating up on the other guy.

And many of them are scrambling to offer consumers relief, hoping it will ease people's burden as the peak summer travel season approaches.

In the race for the Democratic presidential nomination, Sen. Hillary Clinton of New York has criticized Sen. Barack Obama of Illinois for opposing a plan to suspend the 18-cent federal gas tax. Republican Sen. John McCain of Arizona proposed a "gas tax holiday" to help consumers from Memorial Day to Labor Day.

Pelosi doesn't want to suspend the gas tax, which is used to pay for highway projects. But she said President Bush could save consumers from 5 to 24 cents on a gallon of gas by suspending deliveries to the Strategic Petroleum Reserve.

"The longer the president delays action, the more the American people will pay at the gas pump," Pelosi said.

Many Democrats want the Justice Department to investigate alleged fraud and manipulation in oil and gas markets.

And energy executives are getting plenty of heat as lawmakers accuse them of making exorbitant profits during a period of economic strife.

"Your approval ratings are lower than ours, and that means you are down low," Missouri Democratic Rep. Emanuel Cleaver told five executives at a House of Representatives hearing in April. He told them that rising gas prices were their fault and that "the anger level is rising significantly."

Oil companies are defending their record profits.

At the hearing of the House Energy Committee, J. Stephen Simon, senior vice president of ExxonMobil Corp., said the company's earnings are "high in absolute terms." But he said they needed to be viewed in the context of a cyclical industry that requires huge investments during both good and bad times.

"We are currently in an up cycle, strongly influencing our current profitability," Simon said. "But we've seen up and down cycles before. ... Over the last 25 years, we have invested $355 billion, which is more than we earned."

Forty-four percent of Americans now cite soaring gasoline prices as their chief economic concern, according to a survey for the Kaiser Family Foundation. To show their frustration, more than 100 truckers showed up in Washington to drive their rigs and blow their horns as part of a demonstration this week.

Fearing more political fallout in an election year, members of Congress are eager to convince that voters their party is best equipped to respond to the rising prices.

For Republicans, that means taking aim at Pelosi.

"As the price of gas climbs higher, it looks like the Democratic plan to bring down prices was another of their empty campaign promises," said House Republican Whip Roy Blunt of Missouri.

House Minority Leader John Boehner of Ohio said the average price of gasoline was $2.33 per gallon on Jan. 4, 2007, Pelosi's first day as speaker.

Pelosi said House Democrats have passed legislation to address rising gas prices, including a bill that gives the Federal Trade Commission the authority to punish anyone who artificially inflates the price of energy. And she noted that another bill passed by Democrats will expand tax incentives for renewable electricity, hybrid cars and energy-efficient homes, buildings and appliances.

Democrats prefer to blame the president, noting that gasoline prices have more than tripled since 2002.

"For nearly eight years this administration's energy policy has been in the tank," said Democratic Rep. Edward Markey of Massachusetts, chairman of the House Energy Independence and Global Warming Committee. And with the quadrupling of oil company profits in the last six years, he said, the poorest 20 percent of U.S. households now are spending nearly 10 percent of their incomes just on gasoline.

Presidential candidates are making hay of the issue in North Carolina and Indiana as voters prepare to go to the polls Tuesday.

Clinton said Obama "opposes giving consumers a break," adding that she would impose a windfall profits tax on oil companies to offset the revenue lost by suspending the gas tax.

"I understand the American people need some relief," she said.

Obama said that suspending the tax would offer only minimal relief to consumers while making it more difficult to pay for highway and bridge projects.

"Remember that bridge in Minneapolis?" Obama asked, referring to a collapse on Interstate 35 that killed 13 people nine months ago.

McCain said his legislation, called the Summer Gas Tax Holiday bill, would suspend both the gasoline tax and the 24-cent tax on diesel. He said he would make sure the federal highway fund isn't depleted by transferring money from the general treasury.


To see the average price in individual states, check here: www.fuelgaugereport.com/sbsavg.asp

To estimate the cost of gasoline for a trip you're planning, check here: www.fuelcostcalculator.com