Tell us about your experiences with Marketplace. Enter To Win

Congress looks for brakes on gas prices

John Dimsdale Apr 25, 2008
HTML EMBED:
COPY

Congress looks for brakes on gas prices

John Dimsdale Apr 25, 2008
HTML EMBED:
COPY

TEXT OF STORY

KAI RYSSDAL: The economic indicator number one on this Friday is the number 62.6. That’s where the University of Michigan’s consumer confidence survey came in this morning. Down from last month’s measurement of almost 70, and it’s the worst we’ve collectively felt about things since early in the first Reagan administration.

Late in the second Bush administration the president has decided to do something about that. Rebate checks will start being direct-deposited Monday.

PRESIDENT BUSH: This money’s gonna help American’s offset the high prices we’re seeing at the gas pump and the grocery store. And it will also give our economy a boost to help us pull out of this economic slowdown.

The White House isn’t the only place feeling the economic heat. With the summer driving season looming, Congressional leaders are lining up to ease the pain at the pump — or at least look like they’re trying. Marketplace’s John Dimsdale reports.


JOHN DIMSDALE: Political prospects can rise and fall with the cost of a fill-up. Democrats who took control of Congress in 2006 know that. And that’s one reason some Democrats want the Energy Department to stop stockpiling oil in the nation’s petroleum reserve. But analysts say that will only make a small, temporary dent in prices. Other Democrats are asking the White House to cut off arms sales to oil producing countries that refuse to boost output. Oil economist Philip Verleger says that strategy runs smack-dab into the realities of the credit crunch.

PHILIP VERLEGER: The oil producing countries will boost their output, but they can’t find any buyers for their crude oil because the buyers can’t get credit from the banks to buy more crude. There’s both a cause and effect. If the oil exporting countries produce more, it’s not necessary that there’ll be buyers for it.

Democrats aren’t the only ones with ideas for cushioning the shock of gas prices. Presidential candidate John McCain wants to temporarily suspend the 18-cent federal tax on a gallon of gasoline. The chief oil analyst at Platts, John Kingston, says that would offer some short-term relief, but sends the wrong signal to the oil market.

JOHN KINGSTON: The last thing it needs is anything that is going to spur demand. Cutting federal taxes is going to spur demand. This is precisely the opposite direction we should be heading. And why you would be doing anything that would increase demand at a time of tightening supply is just beyond me.

Given global trends, most analysts say there’s not much Congress can do to affect gasoline prices this summer. But that won’t stop them from trying.

In Washington, I’m John Dimsdale for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.