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Mr. DONNELLY of Indiana. Mr. Chair, I rise in support of the DeLauro amendment.
The underlying bill slashes Commodity Futures Trading Commission funding to levels well below what is needed to implement the Dodd-Frank Wall Street Reform and Consumer Protection Act. Dodd-Frank will ensure the CFTC receives information on swap trading and it also directs the CFTC to set position limits on swaps and futures. These provisions are crucial to monitoring and understanding the role of speculation in the energy commodity markets.
Oil rose above $140 per barrel in the summer of 2008, only to fall below $40 per barrel six months later. The prices of commodities rise and fall; however, it is difficult to explain a 70 percent price drop without wondering about the role of speculators. Just 10 years prior to that oil shock, in 1998, hedgers--producers or commercial users of commodities who use the markets to offset price risk--outnumbered speculators by a ratio of three to one. Now speculators outnumber hedgers by a ratio of four to one.
CFTC Commissioner Barton Chilton feels that the increased amount of speculation in the market is a reason to put limits on speculation. CFTC Chairman Gary Gensler has stated that it is necessary to ``address excessive speculation through aggregated position limits.'' Even Goldman Sachs reported that speculators could be driving up oil prices by up to $27 per barrel, saying that there was an eight to 10 cent increase in the price of oil for every million barrels of oil held by speculators.
With all this in mind, I cannot understand why Congress would move to handcuff the CFTC. Earlier this year, oil topped $110 per barrel and gas prices hit $4 per gallon. Previous oil price spikes have come in the summer, and already in April working families had to make tough decisions as gas prices approach the all-time high. While speculators may not be the single driving force behind dramatically increasing oil and gas prices, I do believe their role is not insignificant and that we must ensure the CFTC has the resources it needs to keep speculators in check.
I believe it is unconscionable that while Americans face the prospect of a summer of record-high oil prices, this bill would deny funding to the CFTC for putting in place position limits that could help deter, detect, and measure any inappropriate speculation that might drive up the costs of oil.
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