Rep. Tom Allen: "We Can and Must Do More" to Provide Relief for Middle Class Families and Small Businesses from Soaring Prices

Press Release

U.S. Representative Tom Allen announced at a press conference today at a Portland market store action Congress has already taken and additional legislation he has introduced to provide relief for small businesses and middle class families from soaring food and fuel prices.

"Maine families have paid dearly for the Bush Administration's disastrous economic and energy policies and the efforts of the President's allies in Congress to block change for the past seven years," Representative Allen said. "Families and small businesses in Maine and across America work hard for the money they spend on food and fuel. They crave leadership that will reverse the disastrous energy and economic policies of the last seven years and put government on the side of families and small business for a change."

Representative Allen noted that the new Congress elected in 2006 has taken important steps to provide relief to middle class families and small businesses. He pointed to passage earlier this year of the economic stimulus legislation and more recently of the Close the Enron Loophole Act, legislation passed as part of the Farm Bill to hold oil speculators accountable to the same rules that already govern on-market traders.

"We can and must do more," Representative Allen said. "We need action on several fronts to address both short and long-term challenges. That's why I introduced the Small Business Fuel Cost Relief Act to provide a tax credit businesses can claim on the amount they spend on fuel over the price on Labor Day 2004, adjusted for inflation. My bill, which I reintroduced in this Congress, also increases to 60 cents the IRS Standard Mileage Rate for business owners who use their vehicles for business purposes. I also introduced the Middle Class Opportunity Act, legislation to expand tax breaks to families for children, care of parents and grandparents and education."

Representative Allen cited statistics showing that since January 2001, the price for a gallon of whole milk cost has risen from $2.36 to $3.63, a 54 percent increase. He pointed to similar price increases for other grocery staples. The cost for a loaf of white bread has risen from $.98 to $1.37 (a 40 percent increase), a pound of Red Delicious apples from $.81 to $1.21 (a 49 percent increase), a 12 oz. can of orange juice frozen concentrate from $1.86 to $2.56 (a 38 percent increase) and a dozen eggs from $1.01 to $2.07 (a 105 percent increase). He tied the price increases, in part, to rising fuel costs. Over the last seven years, unleaded gasoline has jumped from $1.54 to $4.05 per gallon and heating oil has gone from $1.44 to over $4.25 per gallon in Portland, while the price of diesel fuel for truckers has risen from $1.53 per gallon to $4.82 per gallon in Bangor.

"These have been boom years for one segment of the economy," Representative Allen said. "Since January 2001, crude oil has risen from between $23 and $25 per barrel to nearly $140 at the end of last week. Some analysts project that by July 4th, oil will reach $150 per barrel and gasoline $5 per gallon."

Representative Allen noted that the "Big Five" oil companies- ExxonMobil, Shell, Chevron, ConocoPhillips and BP -posted combined profits of just over $40 billion in 2001. In 2007, their combined profits topped $123 billion with ExxonMobil reporting $40.6 billion, the highest profit of any U.S. company in history.

"That is profits, not revenues," Representative Allen said. "To put that number in perspective, ExxonMobil's profits last year were more than we spent as a nation on road construction. It's greater than the amount the VA will spend on health care for our veterans this year. ExxonMobil's profits were larger than the entire annual budget for the Homeland Security Department."

Representative Allen voted against the $14 billion in tax breaks the Bush energy bill gave to the oil and gas companies and has sponsored legislation for their repeal. In 2006, he called for a federal price gouging law with real teeth to root out the culprits, throw the book at them and make them feel the pain they have inflicted on consumers. The House has rolled back the tax breaks and passed the price-gouging bill, but action on both remains stalled in the Senate.

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