Congress looks for brakes on gas prices
With the summer driving season looming, congressional leaders are lining up to ease the pain at the pump. But what can they do? John Dimsdale reports.
House Select Committee on Energy Independence and Global Warming Chairman Rep. Edward Markey (D-Mass.), at a hearing entitled "Pumping up Prices: The Strategic Petroleum Reserve and Record Gas Prices" at the Rayburn House Office Building on Capitol Hill Thursday. (Jonathan Ernst/Getty Images)
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TEXT OF STORY
KAI RYSSDAL: The economic indicator number one on this Friday is the number 62.6. That's where the University of Michigan's consumer confidence survey came in this morning. Down from last month's measurement of almost 70, and it's the worst we've collectively felt about things since early in the first Reagan administration.
Late in the second Bush administration the president has decided to do something about that. Rebate checks will start being direct-deposited Monday.
PRESIDENT BUSH: This money's gonna help American's offset the high prices we're seeing at the gas pump and the grocery store. And it will also give our economy a boost to help us pull out of this economic slowdown.
The White House isn't the only place feeling the economic heat. With the summer driving season looming, Congressional leaders are lining up to ease the pain at the pump -- or at least look like they're trying. Marketplace's John Dimsdale reports.
JOHN DIMSDALE: Political prospects can rise and fall with the cost of a fill-up. Democrats who took control of Congress in 2006 know that. And that's one reason some Democrats want the Energy Department to stop stockpiling oil in the nation's petroleum reserve. But analysts say that will only make a small, temporary dent in prices. Other Democrats are asking the White House to cut off arms sales to oil producing countries that refuse to boost output. Oil economist Philip Verleger says that strategy runs smack-dab into the realities of the credit crunch.
PHILIP VERLEGER: The oil producing countries will boost their output, but they can't find any buyers for their crude oil because the buyers can't get credit from the banks to buy more crude. There's both a cause and effect. If the oil exporting countries produce more, it's not necessary that there'll be buyers for it.
Democrats aren't the only ones with ideas for cushioning the shock of gas prices. Presidential candidate John McCain wants to temporarily suspend the 18-cent federal tax on a gallon of gasoline. The chief oil analyst at Platts, John Kingston, says that would offer some short-term relief, but sends the wrong signal to the oil market.
JOHN KINGSTON: The last thing it needs is anything that is going to spur demand. Cutting federal taxes is going to spur demand. This is precisely the opposite direction we should be heading. And why you would be doing anything that would increase demand at a time of tightening supply is just beyond me.
Given global trends, most analysts say there's not much Congress can do to affect gasoline prices this summer. But that won't stop them from trying.
In Washington, I'm John Dimsdale for Marketplace.
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