President Barack Obama said proposals in Congress to cut investments in clean energy technology would hurt efforts to stem rising gasoline prices, which climbed to a 33-month high April 21.
In his weekly radio and Internet address, Obama said while “there’s no silver bullet that can bring down gas prices right away” increasing U.S. oil production, investing in clean, renewable energy, and ending $4 billion in taxpayer subsidies to oil and gas companies each year will help curtail rising gas prices.
“That’s $4 billion of your money going to these companies when they’re making record profits and you’re paying near record prices at the pump,” he said. “It has to stop.”
Obama said in the address that he disagrees with a Republican proposal in Congress to reduce clean energy investments. House Budget Committee Chairman Rep. Paul Ryan of Wisconsin proposed a 70 percent cut to clean energy programs in the Republican budget plan released April 5.
Gasoline for May delivery rose 3.13 cents, or 1 percent, to $3.3086 a gallon on the Nymex, the highest settlement since July 15, 2008. Gasoline, which gained 0.6 percent this week, has increased 45 percent in a year.
Regular gasoline at the pump, averaged nationwide, increased 0.3 cent to $3.84 a gallon April 21, AAA said on its website. That was the highest price since Sept. 16, 2008.
Oil Price Probe
Obama announced a Justice Department probe into the role of traders and speculators in oil markets during a town-hall in Reno, Nevada, on April 21. The working group will explore whether oil and gasoline prices are being driven higher by illegal manipulation.
The group, which includes representatives of federal agencies and state attorneys general, will check for fraud, collusion or misrepresentation at the retail and wholesale level, Attorney General Eric Holder said in a statement. The group also will examine investor practices and the role of speculators and index traders in oil futures markets.
Obama faces political pressure over rising gasoline prices. A New York Times/CBS News poll, conducted April 15-20, found that the number of Americans who think the economy is getting worse has risen by 13 percentage points since last month. The poll of 1,224 adults nationwide had a margin of error of plus or minus three percentage points.
Obama said it’s inevitable that politicians will try “to grab headlines or score a few points” whenever gas prices go up.
While the president said that last year’s domestic oil production was at its peak level since 2003, the “long term” answer is investing in alternative energy and capitalizing on the potential of innovative clean energy companies and start-ups. He said that an agreement reached with major auto companies to raise the fuel economy of cars and trucks in the U.S. and an increase in hybrid technology will also help save Americans money at the pump.
“If you buy a new car in the next few years, the better gas mileage is going to save you about $3,000 at the pump,” he said.
Senate Minority leader Mitch McConnell, a Kentucky Republican, said the Obama administration has unleashed “a war on American energy,” in a statement yesterday. The administration has limited drilling in the U.S. and pushed for more regulations that would raise energy costs for U.S. businesses, he said.
In the Republican address U.S. Senator Mike Johanns of Nebraska said in order to get the nation’s “economic engine firing on all cylinders” there should be less government regulation, which he said “holds businesses back.”
Johanns said the country’s $14 trillion deficit has a “ripple effect right to Main Street” because it causes banks to limit the credit available to small businesses, leading to stagnated growth. He also said the debt could lead to a devaluation of the U.S. dollar, which may cause higher prices for goods and higher interest rates that would have a “chilling effect on small business growth.”
The U.S. government should get out of the way of free enterprise, Johanns said, citing widespread criticism of a tax- compliance mandate in last year’s health-care law, dubbed 1099 for the tax changes it would have required. Johanns said the mandate, which would have required companies to report more transactions to the Internal Revenue Service, created more “red tape” for the nation’s businesses. The president signed the repeal on April 14.
Johanns said that since January the Obama administration has either proposed or enacted more than 250 regulations that cost more than $24 billion.
“That’s $24 billion dollars needed by small businesses across the country to hire new employees and to grow their businesses,” he said.
Johann said “we can’t tie up small businesses in needless red tape and regulations and then expect them to create jobs and boost the economy.”
To contact the reporter on this story: Kate Andersen Brower in Washington at Kandersen7@bloomberg.net
To contact the editor responsible for this story: Mark Silva at firstname.lastname@example.org