Saying "Abracadabra" Won't Drive Down Gas Prices
When it takes $3 to buy a gallon of gasoline, it doesn't take long for Americans to start fuming. High prices at the pump bite consumers more than once, too. That's because businesses all along the economic chain are paying more for fuel and those costs are eventually passed along to customers.
The experts attribute higher prices to rising world demand, tight refining capacity and volatility in oil-producing regions.
So as the summer driving season nears, elected officials find themselves in a pressure cooker. And in an election year, it doesn't take long for tempers to boil over.
While the media fixates on reporting public opinion, I'll keep up my long-standing efforts to advance a long-term energy policy that strikes the right balance between the laws of supply and demand so consumers pay a more reasonable price for gas.
Some politicians want to turn discontent at the pumps into a victory at the ballot box this November. Tapping into voter outrage isn't tricky. But finding genuine solutions to drive down gas prices won't happen overnight.
Some proposals are a bit disingenuous. Saying "Abracadabra" won't drive down gas prices. Lawmakers can't wave a magic wand and pull a rabbit out of a hat. Iowans see through gimmicks.
As chairman of the tax-writing Senate Finance Committee, I champion efforts to reduce U.S. dependence on foreign oil, expand and develop home-grown renewable energy and domestic fuel supplies, encourage conservation and energy efficiency, promote alternative fuels and hybrid fuel technologies and ensure fair play by Big Oil in the marketplace, including enforcement of price gouging and corporate wrongdoing.
Last month, I made a bipartisan request for tax and financial information from the IRS for the nation's largest oil and gas companies. Considering the industry's record profits and extraordinary executive compensation packages, it's within my oversight responsibilities to make sure no incongruities exist between taxes owed and taxes paid.
America for too long has endured tight energy supplies and price spikes at the pump. American consumers, policymakers and industry leaders must share in the responsibility to achieve long-term price stability.
Consumers ought to look for more ways to conserve. And policymakers must embrace proposals that would help insulate consumers from U.S. dependence on foreign oil and Big Oil. That's why I work so hard to champion green energy, including renewable fuels like biodiesel and ethanol. The oil industry says it has a responsibility to shareholders. If more American consumers begin displacing crude oil with alternative fuels and drive hybrid vehicles, perhaps the oil and automobile industries would begin to worry more about keeping satisfied customers.
A wrong-headed idea has cropped up to address soaring gas prices, including a proposal to lift the tariff on imported ethanol. Giving heavily subsidized, foreign-made ethanol an edge over domestic ethanol would do more harm than good. It would undermine efforts by U.S. corn farmers and local investors to build up capacity at home. And removing the tariff would inflict pain on U.S. taxpayers without any gain for motorists.
According to the Energy Information Administration, 130,000 barrels per day of ethanol are needed to replace the petroleum additive known as MTBE which was found to contaminate water supplies. In February, 302,000 barrels of ethanol were produced daily. Simple math suggests domestic supply exceeds demand. What's more, the domestic market is projected to produce nearly 5 billion gallons this year.
Fueled by an overwhelming urge to win control of Congress in November, some lawmakers are shifting into a blame game as they gear up for Election Day.
That won't sit well with consumers filling up their empty gas tanks week after week with $3 gasoline. But don't forget. Gas prices are an important piece, but not the only piece of the puzzle squeezing pocketbooks across America. Household budgets shrink or thrive on an economy fueled by consumer confidence, low taxes, job creation and access to capital.
From my leadership position in Congress, I'll continue working to secure a comprehensive energy policy that puts a premium on energy independence, conservation, efficiency and renewables.
As we near the peak driving season over the summer months, I caution Iowans not to fall for lofty promises that sound too good to be true or those that resurrect class warfare. Raising taxes isn't going to help lower gas prices or alleviate pocketbook pressures of fixed household costs. Make no mistake. Rolling back the 2001 tax laws would harm the economy significantly and leave less take-home pay for hardworking taxpayers.
I can't imagine that's the electoral bargain Americans are shopping for.