30-SOMETHING WORKING GROUP -- (House of Representatives - July 24, 2008)
Mr. ALTMIRE. And the gentleman is correct, and we were sitting here listening to some of the Members that came before us talk about the importance of supply, and there's a couple of issues.
One is the fact that we are dealing with folks who are advocating increasing supply 10 and 20 years from now. The policies of drilling off the coasts and opening up new areas of the Outer Continental Shelf, opening up the Arctic National Wildlife Refuge in Alaska, the first drop of oil does not come for 10 years. We don't achieve peak capacity in either of those areas for at least 20 years, according to the Department of Energy, President's Bush own Department of Energy. Those aren't our numbers; that's their numbers.
So the issue of increasing supply--and they have a really nice slogan that they like to use: Drill here, drill now. And we'll see them wearing their buttons, and you hear some of the radio talk show hosts around the country: Drill here, drill now. And that's a great slogan, but that's not what ANWR is. That's not what opening up new areas of the Outer Continental Shelf is. If you are advocating that policy, if that's your energy policy, then your slogan ought to be: Drill here, drill in 10 years, drill in 20 years. So that's one side of the equation.
But to what the gentleman talks about, if you're going to make the argument that the only way to solve this energy crisis is to increase the supply of oil, domestic supply, let's get more oil on to the market--and again, what they're advocating isn't doing it immediately--but if you're saying we need to do it immediately, well, there is one way to do it immediately, and let's take a look at the history.
The gentleman talked about, effective July 1, the 70,000 barrels a day every day that this country was placing into the Strategic Petroleum Reserve is now going into the private market, effective July 1. What's been the impact? Well, on July 7, which was that first day after the July 4 holidays, the price of gas was at an all-time high. I believe it was four-eleven-and-a-half, highest it's ever been. We're right now about 6 cents less than that, not a substantial decrease. But instead of the exponential increase that we had seen for months, trajectory of price straight up, we've now seen a very slight decrease, but a decrease nonetheless. Certainly, some stability in the market where none existed before as a direct result of the action this Congress took to begin withholding shipments in the Strategic Petroleum Reserve, and now we've seen the impact. It has reduced the price.
Well, what do you think the impact would be instead of 70,000 barrels a day, how about taking 70 million barrels out of the Strategic Petroleum Reserve, over a certain period of time, not all at once, but putting 70 million barrels into the market? You would see an amazing decrease in the price, as the gentleman knows, and that's what we advocated here today.
And while we were sitting here listening to the Members that came before us, a couple of them in particular talked about how this Congress has done nothing advocating increasing supply. Well, today, not last week or last year, today before we came on the floor for this speech, this whole House took a vote a couple of hours ago on releasing 70 million barrels. You want to talk about now, that's now, 70 million barrels from the Strategic Petroleum Reserve, put it into the market.
It would have an incredible effect, not only on decreasing gas prices because you have more supply, but
maybe even more importantly, on these speculators who are betting on the price of oil continuing to go up and manipulating the price in the market, and that's a very real issue. It's a very big part of why gas prices have gone up as high as they have because of this market speculation. They wouldn't know how to react if we put 70 million barrels in a time sequence over time into the market. That would have real impact on their ability to continue to manipulate, and they would lower the cost in the market as well. It would have two impacts.
And how do those Members who talk about increasing supply and the need of this Congress to do something about gas prices--it's all they talk about. Well, what did they do? Well, most all of them voted against it. We have the numbers here on the vote. 157 Republicans opposed that vote today. 157 voted against increasing domestic supply of oil. After all the lectures we've had to endurefor the last several months about how we need to put more oil in the market, we had a vote to do just that today. A hundred plus of them voted against it.
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Mr. ALTMIRE. And I appreciate the gentleman yielding.
And I would put it in the perspective of, let's take a look at how we got where we are today, take a little walk down memory lane. And why have gas prices gone up so dramatically? And the speakers on the other side will bring up their charts with their timelines and try to point fingers and cast blame.
The three major reasons that gas prices have increased so dramatically over the past several months is the increased demand for growing economies like China and India. There is nothing we can do about that; that is going to continue to grow, it's going to continue to be a problem. And we're going to have to continue to deal with that, the increased demand in growing economies.
However, two of the other main reasons why the price of gas has gone up so much over the past several months, the speculators in the market manipulating the price, driving it up beyond reasonable levels because they're betting that the cost of oil is going to continue to go up. That's something we can do something about, something we are going to do something about.
And the other factor, a major reason for the price of oil in the market having risen to all-time record highs--before we stopped the Strategic Petroleum Reserve shipments, which has led to the decrease in recent weeks, but it's still at a near record high for the price of oil--is the U.S. dollar and the low dollar around the world.
Oil is traded in the world market with the U.S. dollar. Obviously we use the U.S. dollar, so we're going to pay more for oil as a result of the deflation that has taken place with the dollar at near record lows in relation to other currencies around the world. Anyone who has traveled this summer to other countries can see the impact of the low dollar on your exchange rate.
Well, let's take a look at why that happened. Why do we have such a low dollar? Two of the main reasons:
Our trade deficit, the imbalance in trade from what we're shipping out overseas to what we're bringing in. We're bringing in a lot more from overseas than we're exporting. The trade imbalance plays a huge role in that.
And of course the debt, the national debt. And we've talked many times--I won't give you the long lecture on it. But suffice it to say 8 years ago we were looking at a $5.5 trillion surplus over the next 10 years, could have paid off the entire national debt. Because of the economic policies of this administration and the previous Congresses when they controlled both the White House and Congress on the other side, the decisions that were made have led to a skyrocketing national debt, deficits every year, deficits as far as the eye can see. And now, instead of having paid off the entire national debt, what do we have? We have a debt ceiling that's now over $10 trillion. That's why the dollar is at an all-time low. That's one of the big reasons why oil has skyrocketed in the world market.
So the very people who made those decisions, the very people who are responsible for those economic policies and those trade policies that have led to devaluation of the dollar in the world-wide market, the very same people who made those decisions are now coming forward with their ideas on what to do with regard to the energy crisis. And we should take that with a grain of salt, at minimum, because we've seen the impact of their policies, we know what happened. The American people have cast judgment on what they thought about those policies.
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Mr. ALTMIRE. I thank the gentleman. That is something that we have worked on in this Congress and something that we have a great record of achievement is higher education. When you look at families struggling with the economy and look at the problems that we have with increased health care costs, certainly gas prices like we're talking about, the cost of higher education is right there with the struggles that most middle class families or many middle class families in this country are facing. And this Congress took, in the very early days, a step, a very big step, to help families.
We cut in half the interest rates on student loans from 6.8 percent to 3.4 percent. And as the gentleman indicates, that by itself is going to save the average student borrower in this country $4,400 over the lifetime of the loan.
But we didn't stop just there. We increased Pell grants to their highest level in history, and we capped at 15 percent of income the amount of discretionary income that the borrower after they graduate will be required to pay, which will help them minimize their debt, prevent them from getting overextended with their debt obligations when they're not making a lot of money right from the start, and avoid some of the problems that we have seen in the credit market now where people's homes have been foreclosed because they got overextended.
Those are real accomplishments on real issues that matter to the American people and matter to American families, and that's something that we have to stand on when we talk about what this Congress has done proactively.
We're talking about gas prices, and something we didn't even mention, which is a major reform, hadn't been done in 30 years, we increased the average miles-per-gallon standards, the fuel efficiency standards, from 24 miles per gallon on average to 35 miles per gallon. The first time it had been raised for American-made cars or cars sold in America in 30-plus years. So that's another real accomplishment of this Congress.
And we could go on. The gentleman talks about the minimum wage and others. So we are taking steps to help American families and people struggling in this downturn economy.
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