WASHINGTON – Soaring gasoline prices spilled over into Washington and the presidential race Tuesday, as Congress moved toward a showdown with President Bush over legislation aimed at forcing oil companies to help ease the burden on consumers.
Bush, reaching back to the earliest days of his administration, resurrected GOP demands for new drilling in the Alaska wilderness, fewer restrictions on oil refineries and other measures aimed at lowering fuel prices through higher production.
Democratic leaders shot back that Bush is out of touch with struggling Americans, as he pours money into the Iraq war at the expense of domestic priorities. Senate leaders promised to unveil gasoline price legislation by week’s end.
Two oil giants, BP and Royal Dutch Shell, announced record profits Tuesday totaling $17 billion in the first three months of the year. Exxon Mobil is expected to smash its own previous records for quarterly corporate profits Thursday.
On the presidential campaign trail, GOP candidate John McCain, R-Ariz., and Democratic hopeful Sen. Hillary Rodham Clinton, D-N.Y., have both backed the idea of a summer tax holiday for gasoline and diesel. Sen. Barack Obama, D-Ill., denounced the idea as a political gimmick that would cost thousands of jobs and save drivers $28 at most.
Bush declined to take a position on the concept of a gas-tax holiday, saying he was “open to any ideas” to deal with rising fuel prices. But in a news conference in the Rose Garden, he focused on controversial, longer-term proposals aimed at loosening environmental or regulatory restrictions on domestic oil exploration and production, and he also advocated building additional nuclear plants.
“If there was a magic wand to wave,” Bush said, “I’d be waving it, of course. … But there is no magic wand to wave right now. It took us a while to get to this fix.”
Although oil-related proposals were at the center of his remarks, Bush also offered a broader critique of congressional inaction, arguing that Democrats have worsened the nation’s economic problems by opposing his housing reforms, a Colombia free-trade agreement and other proposals.
Much of the Senate legislation in the works is likely to fall victim to partisan bickering. Democrats are likely to call for price-gouging investigations and will try to roll back tax subsidies approved in 2005 for the oil companies to pay for tax relief to consumers. Barbara Boxer, D-Calif., chairman of the Senate Environment and Public Works Committee, called Tuesday for the sale of oil from the Strategic Petroleum Reserve, a 700 million-barrel emergency stockpile of crude oil that is equivalent to nearly two months’ worth of U.S. petroleum imports. None of those ideas is likely to get past a Republican filibuster, let alone a presidential veto.
Other measures, however, are gaining bipartisan support. Sen. Byron Dorgan, D-N.D., announced Tuesday that he now has a veto-proof margin – 49 Democrats, two Independents and at least 16 Republicans – to pass legislation that would temporarily halt purchases for the petroleum reserve, asserting that such a move could have a dampening impact on oil prices.
Bush said he was opposed to the idea, however, arguing that the stockpile might be necessary in case of a terrorist attack on oil facilities and that halting contributions would have little impact on gasoline prices.
Bush also pointed to a lack of U.S. oil refinery capacity, saying that no new refinery has been built for 30 years. Refinery capacity has been a problem in the oil industry and was blamed for driving up prices, especially in 2006-2007. But oil companies have been expanding existing refineries, boosting U.S. capacity by 2 million barrels a day since 1985, to 17.6 million barrels a day.
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